A few days ago, the Constitutional Court of Ecuador ("CCE") issued two decisions by which it clearly establishes the rule that will be applied in cases of constitutional extraordinary protection actions against arbitration awards.1

Ecuador's Constitution, in force since 2008, created the possibility to resort to the CCE through the extraordinary protection action, when judgements (including arbitral awards) breach constitutional rights. Since 2008, several arbitration awards have been challenged before the CCE alleging violations of constitutional rights, such as lacking of due process. In some instances, such actions were filed before or after the ordinary procedure of annulment of arbitration awards provided in the Arbitration and Mediation Law ("LAM") have taken place, creating uncertainty about the procedure and timing to challenge an arbitration award.

The criterion established by the CCE through these judgments refers to the need to exhaust the ordinary means of challenge, prior to resorting to the extraordinary constitutional protection action, in application of article 61 numeral 3 of the Organic Law of Constitutional Guarantees and Constitutional Control.

The CCE considered the annulment action provided in the LAM as the ordinary mean of challenge when the alleged violations of due process or constitutional rights fall into one of the five grounds of annulment of the award established in Article 31 of the LAM.2 Therefore, the CCE considered that the annulment action constitutes the appropriate and effective method of guardianship of due process and guarantees the legal certainty enshrined in the Constitution of the Republic of Ecuador, so consequently it must be exhausted before resorting to the CCE.

This decision was based on the principles of minimal judicial intervention, as well as on the residual and extraordinary nature of the extraordinary protection action, which had already been established by the CCE in other processes. The CCE reiterated that such protection action cannot be applied in all cases nor constitutes an additional instance of the process.

Likewise, the CCE ruled that the only exception to the aforementioned criterion are alleged violations of due process or constitutional rights that do not fall into one of the five grounds for annulment of the award established in Article 31 of the LAM. In this case, the exhaustion of the annulment action would not be necessary, hence, extraordinary protection action could be filed directly.

Finally, the CCE ruled that the principle of legality and specificity govern the annulment of arbitration awards (there is no nullity without law), so the five grounds for annulment established in Article 31 of the LAM are the only ones that can be used to file said annulment action. The CCE indicated that these grounds must be considered taxative in view of the nature of arbitration as an alternative method of conflict resolution that enjoys constitutional recognition and the autonomy of the will of the parties, so the award is not appealable the same way as ordinary justice judgements. With this ruling the CCE corrected a disastrous previous ruling that stated that by doing an extensive interpretation, other grounds of annulment were allowed.

Undoubtedly, the criteria adopted by the CCE through these judgements will contribute to legal certainty and strengthening of arbitration in Ecuador.

Footnotes

1 Judgement No. 323-13-EP/19. Judge writing the opinion: Karla Andrade Quevedo. Judgement No. 31-14-EP/19. Judge writing the opinion Enrique Herrería Bonnet.

2 The grounds for annulment of awards established in Article 31 of the LAM are the following: "a) It has not been legally summoned with the lawsuit and the trial has been followed and ended in default. It will be necessary that the lack of summons has prevented the defendant from deducting his exceptions or enforcing his rights and, in addition, that the defendant claims for such omission at the time of intervening in the dispute; b) One of the parties has not been notified with tribunal orders and this fact prevents or limits the right of defense of the party; c) When it has not been convened, the convocation has not been notified, or after the summons the exhibits have not been practiced, despite the existence of facts that must be justified; d) The award refers to issues not submitted to arbitration or granted beyond what is claimed; or, e) When the procedures established by this Law or by the parties to appoint arbitrators or establish the arbitral tribunal have been breached."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.