1. International Agreements
a. Is the jurisdiction a party to the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, done at New York on
10 June 1958 (New York Convention). If so, are there any reservations? Name
the domestic law that implements these commitments.
Yes, Paraguay acceded to the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958).
It was incorporated into domestic legislation through Law 948 of 9 September
1996 without reservation. Date of deposit: 8 October 1997.
b. Is the jurisdiction a party to the Convention on the
Settlement of Investment Disputes between States and Nationals of other
States, done at Washington on 18 March 1965 (ICSID Convention)? Is there an
implementing law? Is the jurisdiction a party to any bilateral investment
treaties providing for settlement of investment disputes between a state and
a national of another state?
Yes, Paraguay is a party to the ICSID Convention, which
was signed in 1965 and ratified by Law 944 of 1982.
c. Is the jurisdiction a party to the Inter-American
Convention on International Commercial Arbitration, signed in Panama on 30
January 1975 (Panama Convention)? Is there a domestic implementing law?
Yes, Paraguay is a party to the 1975 Inter-American
Convention on International Commercial Arbitration, ratified by Law 611 of
1976.
d. Is the jurisdiction a party to any other international
agreement related to international commercial arbitration?
1. Paraguay is a member of the Multilateral Investment
Guarantee Agreement (MIGA). The agreement was signed on 13 September 1991
and ratified by Law 124/91.
2. On 24 April 2002, Law 1879/02, On Arbitration and
Mediation, which adheres to the principles of the UNCITRAL Law, was passed.
3. American Convention on Extraterritorial Validity of
Foreign Judgments and Arbitral Awards signed by Paraguay on 8 May 1979 and
ratified by Law 889 of 1981.
2. Arbitration
a. What is the source of law for international commercial
arbitration within your jurisdiction? Please cite.
The sources of law for commercial arbitration in Paraguay
are:
1. The National Constitution
2. Treaties signed and duly ratified by Paraguay (see
above),
3. From our corpus of laws, we would mention:
The basic laws of the
different public entities authorizing or not authorizing them to
resort to commercial arbitration in matters pertaining to private law.
b. Does the law contain different rules for domestic and
international arbitration?
Paraguay’s arbitration legislation does not include a
specific law that regulates international arbitration, but the “UNCITRAL
Model Law on International Commercial Arbitration” (United Nations Document
A/40/17 Annex I), approved by the United Nations Commission on International
Trade Law on 21 June 1985, is applied.
c. Are there limitations on the types of disputes that
may be arbitrated?
There are a few limitations. Article 2 of Law 1879/02
states: "Art. 2.- Object of arbitration. All settleable or patrimonial
matters may be subject to arbitration provided that no final, non-appealable,
enforceable judgement has been issued on the matter. Matters requiring the
intervention of the Public Prosecutor’s office may not be submitted to
arbitration.
The State, decentralized entities, autarchic entities and
public sector companies, as well as municipalities, may submit their
disputes with national or foreign private individuals to arbitration,
provided that said disputes are derived from legal proceedings or contracts
governed by private law".
d. Does the law specify rules for arbitration or do the
parties have autonomy to set their rules?
Law 1879/02 consecrates the principle of the will being
autonomous. As far as proceedings are concerned, Article 22, Determination
of the Proceeding, states: "Subject to the provisions of this law, the
parties shall be free to agree to the procedure that is to be followed by
the arbitral tribunal in the performance of its duties. In the absence of
such an agreement, the arbitral tribunal may, subject to the provisions set
forth in this law and upon notification of the parties, direct the
arbitration in the way it deems appropriate. The power hereby conferred upon
the court of arbitration includes the power to determine the admissibility,
relevance, and materiality of evidence."
e. What is the role of the courts during an arbitration?
May the courts intervene prior to or during the arbitration process?
The role of the ordinary courts is to support the
arbitral tribunal before, during and after the arbitration process.
The law establishes:
Art. 9: Authority to perform certain assistance and
supervisory functions during arbitration processes. "When judicial
intervention is required, the judge on duty at the Civil and Commercial
Courts of First Instance in the place in which the arbitration process is
being carried out shall preside.
When the place of arbitration is located outside the
national territory, the judge on duty at the Civil and Commercial Courts of
First Instance in the domicile of the person whose property is attached, or
in the absence of the latter, in the location of the assets, shall preside
over the recognition and enforcement of the arbitral award."
Art. 11: Arbitration agreements and complaints regarding
the merits of the case before a judge. "The judge before whom a suit is
brought on a matter subject to an arbitration agreement shall refer the
parties to arbitration should any one of them so request upon the
presentation of the first writ on the merits of the case, unless said
agreement is shown to be null, ineffective, or impossible to execute.
If the legal action mentioned in the preceding paragraph
has been filed, the arbitration proceedings may nevertheless be started or
carried out, and an arbitral award may be issued, while the matter is still
pending the judge's decision, provided that the parties abandon the suit
prior to the arbitral award being issued."
Art. 20: Power of the arbitral tribunal to order
provisional precautionary measures. "… Prior to the establishment of the
arbitral tribunal, the judge of the Civil and Commercial Courts of First
Instance shall, upon request, decide upon provisional precautionary
measures. The legally issued provisional precautionary measures shall expire
within seven days of the establishment of the arbitral tribunal, and said
tribunal may ratify, remove or modify them from the moment of its
establishment. "
Before the process is initiated, the ordinary courts may
intervene to guarantee rights, and to order interim relief measures. During
proceedings, ordinary courts may also order the enforcement of interim
relief measures issued by an arbitral tribunal or order the compulsory
performance of specific tests. Once the process has been completed, the
ordinary courts, at the request made of a party, may order enforcement of a
judgment, whether judicial or arbitral, provided it is final and enforceable
and that the period established for its fulfillment has expired (Art. 519 of
the Code of Civil Procedure).
f. Can the courts grant interim relief pending the
outcome of an arbitration?
Yes, see above. Art. 20 in fine.
g. Does the law require citizenship or a particular bar
membership for participation in an arbitral proceeding, as arbiter or
representative of a party?
Inasmuch as it is a law on international arbitration, the
law is not restrictive with respect to nationality requirements, etc., for
participation as an appointed arbiter in an arbitration process.
In Article 13, Appointment of Arbiters, the law states:
"For the appointment of arbiters, the following shall apply: a) except when there is an agreement to the contrary
between the parties, neither nationality nor domicile shall be obstacles to
the appointment of arbiters. In order to perform their function, foreign
arbiters shall be admitted to the country as non-resident foreigners for a
period of six months. Said period may be extended for similar lengths of
time, and arbiters shall receive payment for their services…"
h. Does the law require that the proceedings be conducted
in a particular language?
As far as language is concerned, the principle of the
parties' autonomous will is applied. Art. 25, Language, states: "The parties
may freely agree to the language or languages that are to be used in
arbitral proceedings. In the absence of such an agreement, the arbitral
tribunal shall determine the language or languages to be used in the
proceedings…"
i. Does the law contain mandatory provisions for
selecting a specific set of rules for arbitration proceedings?
The law establishes in Art. 32, Norms applicable to the
merits of a case, that: “The arbitral tribunal shall decide the suit
according to the legal norms chosen by the parties as applicable to the
merits of the case. It shall be understood that any indication of the law or
legal ordinances of a certain State shall refer, unless specifically stated
otherwise, to the substantive law of that State and not to its norms for
conflict of laws.
If the parties do not indicate the applicable law, the
arbitral tribunal shall apply the law determined by the norms of conflict of
laws that it considers applicable.
The arbitral tribunal shall decide in equity only if the
parties have specifically authorized it to do so. In arbitration proceedings
carried out 'in equity' or through friendly settlements, the arbiters are
not obliged to settle the matter on the basis of the rules of law, but may
do so in ‘good conscience’ or ‘according to their best knowledge and
understanding’.
In all cases, the tribunal shall reach its decision in
light of the stipulations of the corresponding contract and shall bear in
mind the commercial usage applicable to the case.”
j. Does the arbitration law prescribe rules for
decision-making by the arbiters and the form of an award?
Conc. Art. 32 quoted ut supra.
k. Is the confidentiality of arbitral proceedings and
awards protected by law?
National legislation protects the confidentiality of the
arbitral proceedings and awards to the extent agreed by the parties.
l. On what grounds will the courts set aside or decline
to enforce an award?
Local courts may dismiss or refuse to enforce arbitral
awards for the reasons stipulated in Art. 26 of Law 1879/02.
Reasons for denying the recognition or the enforcement of
awards: “The recognition or enforcement of arbitral awards may only be
refused, regardless of the State in which they have been issued, when:
a) the party against whom the finding was awarded proves
before the judge that:
1. one of the parties in the arbitration
agreement mentioned in article 10 was affected by some kind of
incapacity, or that said agreement is not valid under the law to
which the parties have subjected themselves, or if nothing to this
effect is indicated, under the law of the State in which the award
was issued.
2. it has not been duly notified of the
appointment of an arbiter or the arbitral proceedings, or has not,
for any reason, been able to exercise its rights.
3. the award refers to a dispute not provided for
in the arbitration agreement or contains decisions that go beyond
the terms of the arbitration agreement. Nevertheless, if the
provisions of the award that refer to matters subject to arbitration
can be separated from those that are not, the former may be
recognized and enforced.
4. the composition of the arbitral tribunal does
not adhere to the agreement entered into by the parties, or in the
absence of such an agreement, are not in accordance with the law of
the State in which the arbitration was carried out.
5. the award is still not obligatory for the
parties or has been annulled or suspended by a judge of the State in
which, or according to whose laws, the award has been issued.
b) the judge proves that, according to Paraguayan law,
the matter under dispute is not subject to arbitration, or that the
recognition or enforcement of the award would run counter to international
public order or public order in Paraguay.”
m. What is the procedure for the enforcement of an award?
The procedure for the recognition and enforcement of an
arbitral award is set forth in Art. 45, Recognition and enforcement of
arbitral awards. "An arbitral award, regardless of the State in which it is
issued, shall be recognized as binding, and upon the presentation of a
written request to the competent judicial body, such awards shall be
enforced according to the provisions of this chapter. If the party
requesting the recognition and enforcement of the award so wishes, the judge
on duty at the Civil and Commercial Courts of First Instance in the domicile
of the person against whom the award is to be enforced, or in the absence
thereof, where the assets involved are located, shall be deemed competent
for this purpose.
The party invoking the award or requesting its
enforcement must present the duly authenticated original of the award or a
duly certified copy of the same, as well as the original document of the
arbitration agreement referred to in article 10 or a duly certified copy of
the same. If the award or agreement were not drafted in Spanish, the party
invoking the award must present an official Spanish translation of the
documents made by an official translator."
n. Please list any institutions available within your
jurisdiction that provide international commercial arbitration services.
Provide internet address where available.
The arbitration institution known to the Ministry of
Foreign Affairs of Paraguay is the CENTRO DE ARBITRAJE Y MEDIACION DE
PARAGUAY de la CÁMARA Y BOLSA DE COMERCIO (CENTER FOR ARBITRATION AND
MEDIATION OF PARAGUAY OF THE CHAMBER OF COMMERCE AND STOCK EXCHANGE),
located at: Estrella 540, Asunción, Paraguay. Electronic mail:
. For additional information, please go to:
www. camparaguay.com
3. Alternative Forms of Dispute Resolution (ADR)
a. Are other forms of alternative dispute resolution
(mediation, conciliation) available for the resolution of commercial
disputes within your jurisdiction?
Yes. Since the entry into effect of Law 1879/02, users of
the justice system have the following legal (conciliation, mediation,
arbitration and judgment) entities at their disposal:
b) Law 1879, On Arbitration and Mediation, is the legal
instrument that promotes the use of ADR in extra-judicial matters in various
fields, including trade. Resolution 198/00 provides for the creation of the
Mediation Service as a department of the Supreme Court of Justice. This
service, which is offered through the Mediation Office of the Judicial
Branch, promotes, through the Resolution, the use of mediation in cases
involving a range of matters, mainly civil and commercial ones, which have
been taken up as legal issues.
b. Does the law or do the courts mandate or encourage the
use of ADR in commercial disputes? Are there any legal impediments to using
ADR for the resolution of commercial disputes?
Law 1879, On Arbitration and Mediation, is the legal
instrument that promotes the use of ADR in extra-judicial matters in various
fields, including trade. Resolution 198/00 provides for the creation of the
Mediation Service as a department of the Supreme Court of Justice. This
service, which is offered through the Mediation Office of the Judicial
Branch, promotes, through the Resolution, the use of mediation in cases
involving a range of matters, mainly civil and commercial ones, which have
been taken up as legal issues.
c. Can courts enforce agreements to mediate or use other
forms of non-binding dispute resolution in commercial disputes?
No, mediation is only used on a voluntary basis. If the
parties have agreed to a mediation clause in a contract and a dispute arises
in respect of same, the Court, in response to the request of the parties,
will order enforcement of the agreed clause before authorizing court action.
The same applies in the case of an arbitration clause, in which case the
legal authority will recognize the arbitration authority and decline to
intervene.
d. Are there any organizations that specialize in ADR for
commercial disputes not already mentioned?
Yes, such organizations do exist. Among these are: the
CENTER FOR ARBITRATION AND MEDIATION OF PARAGUAY of the Chamber of
Commerce and Stock Exchange of Asuncion and Services of Paraguay;“Nuestra
Señora de Asuncion” Catholic University’s CENTER FOR MEDIATION; the
Mediation Office of the Judicial Branch, and the Community Mediation Program
run by INECIP.
e. What rules govern confidentiality and admissibility of
evidence in other proceedings?
The second section of chapter I of Law 1879/02
establishes confidentiality of mediation proceedings to the following
extent: "Mediation shall be confidential. Those participating in a mediation
procedure must show due reserve, and the forms of agreement proposed shall
not affect any lawsuit, should one arise. The mediator may not be called as
a witness or in any other form during any later proceeding between the same
parties or regarding the same issue." Confidentiality is part of the
procedure in the Arbitration and Mediation Centers and is regulated by the
rules of each institution, as well as by the codes of ethics applicable to
the professionals participating in the process. The parties may sign an
agreement on confidentiality during an arbitration process.
4. Legal Sources and References
In addition to the references above is there an
authoritative Internet site containing up-to-date information on dispute
resolution facilities available in this jurisdiction?
Paraguay does not have an official Internet site with
information on Dispute Settlement Mediation and Conciliation institutions or
organizations at the national level. The Internet site of Centro de
Arbitraje y Conciliación de Paraguay is
www.camparaguay.com.
This center serves as the National Office for the Inter-American Convention
on International Commercial Arbitration (Panama Convention) and is a member
of the Secretariat of Mediation and Arbitration of the MERCOSUR Council of
Chambers of Commerce.
5. Bibliography
Please list respected reference works relating to
arbitration and ADR in your jurisdiction.
Most of the bibliography on arbitration and forms of
dispute settlement mediation and conciliation is available in the
publications of “Revista Jurídica LA LEY.” In addition, other publications
are available in “Revista Jurídica de la Universidad Católica.” Recently, at
the request of the Chamber of Commerce of Uruguay, a book containing a
compilation of articles by Paraguayan specialists was published on
arbitration in Paraguay. Articles on doctrine are published on the web site