Principle of Minimum State Intervention in National Arbitration in Honduras

Principle of Minimum State Intervention in National Arbitration in Honduras

Principle of Minimum State Intervention in National Arbitration of Honduras Abstract In this analysis we deal with the Intervention of the State of Honduras in National Arbitration according to the Current Positive Law, taking as a legal basis the Law of Conciliation and Arbitration, Law on Constitutional Justice, the Supreme Court of Panama and certain aspects of the regulations of the Conciliation and Arbitration Centers in Honduras. Currently, the Supreme Court of Justice of Honduras has a degree of intervention in arbitration processes since it can hear appeals for protection against decisions of the Courts of Appeals when deciding on the Annulment of an Award. Arbitration AwardsTo discuss State intervention in arbitration, it is necessary to mention the concept of an Arbitration Award, since it is from the Award that State intervention begins. The Arbitration Award is a resolution by means of which the arbitral tribunals decide the controversial issues submitted to their consideration, controversies that have been initially raised by the Claimant, as well as by the Defendant Counterclaimant, this is the person who, being a defendant, includes in the answer to the claim a new claim against the person who initiated the process, this is called a counterclaim. According to Honduran legislation, in Article 73 of the Conciliation and Arbitration Law, there is only one recourse against the award and that is the appeal for Annulment (Conciliation and Arbitration Law, 2000). This appeal is a special form of appeal against arbitral awards. It is important to highlight that this appeal is filed before the Arbitral Tribunal, which is immediately referred to the competent appellate body. When the appeal is referred to the appellate body, an important distinction arises: it is up to the parties involved in the process to decide who should hear this appeal for annulment. This may be the Civil Court of Appeals of the jurisdiction where the award was issued, or if the parties agreed to it in the arbitration agreement. Even without an agreement, the parties may agree that this appeal should be heard by a new Arbitral Tribunal. The Judiciary and its role in arbitrationAs evidenced in the Conciliation and Arbitration Law, the first intervention of the State of Honduras in the arbitration occurs when the appeal for annulment is directed to the Civil Court of Appeals, which in the opinion of this Court decides on the appeal and has a maximum period of one (1) month. According to Article 76, no appeal is admissible against the ruling of the Court of Appeals or the Arbitration Tribunal that hears the annulment. A second intervention by the State occurs when the plaintiff or counterclaimant is affected by the resolution of the Court of Appeals upon hearing the appeal for annulment and files an Amparo action against the judgment issued by the Court of Appeals resolving the appeal for annulment. It should be noted that the Amparo appeal is not against the Arbitration Award, but as mentioned, against the judgment of the Court of Appeals. The legal argument on which these appeals are based is in Article 42 of the Law on Constitutional Justice, based on sectionagainst the resolutions, acts and deeds of the Powers of the Stateand under the premise ofdelegation of a State body by virtue of a concession,which should be understood as the delegation of the administration of Justice that the State confers to the Conciliation and Arbitration Centers (Law on Constitutional Justice, 2004). A bold and innovative decision by the Panamanian CourtSomething very interesting happened recently in Panama regarding the amparo action against Arbitral Awards, which is a true example of how the State must contribute to strengthening the spaces in which arbitrations are carried out. The Supreme Court of Panama issued a ruling on April 12, 2023, in which the judges established that the amparo action cannot be promoted against the resolutions issued by an Arbitral Tribunal. This ruling directly confirms the autonomous nature of the Annulment Appeals against Arbitral Awards. Thanks to the Supreme Court of Panama, the Panamanian State confirms that it remains at the forefront in Latin America in arbitration processes, since Panama is one of the major venues for conducting major international commercial arbitration disputes.(Sánchez G & Chevalier, 2023).  The Changes are PositiveFrom my point of view, State intervention in arbitration violates some of the main characteristics for which interested parties turn to arbitration as their primary method of dispute resolution, such as confidentiality, expeditious process, simplicity, and effectiveness. While it is true that the Conciliation and Arbitration Law already provides for a period of one (1) month for the Courts of Appeals to decide on the Appeal for Annulment, this is not sufficient, since it does not guarantee that it will be fulfilled in a timely manner. An example of this are the deadlines of the Civil Procedure Code, which are often not met. Furthermore, with respect to the action for protection, the waiting time could be much longer. This is why the legislator must ensure that arbitration is an autonomous and independent alternative method of dispute resolution, guaranteeing that State intervention is truly minimal or nonexistent, and that it is limited to hearing appeals for Annulment exclusively before a new Arbitration Tribunal and not referring them to the Court of Appeals. It would even be a novelty in the country for an annulment appeal to be heard by a new Arbitration Tribunal, but by a different Conciliation and Arbitration Center. This way, the parties would have the option of choosing which Conciliation and Arbitration Center they consider appropriate. This could be viewed favorably by legal representatives who frequently litigate in Arbitration Courts. However, this action would have to be promoted by the Conciliation and Arbitration Centers themselves in their own regulations. Let us remember that in Arbitration, the parties are the owners of the process and are the ones who decide which regulations they will submit their disputes to, as established in the arbitration clauses. It is necessary for the legislator to adopt a more progressive vision and establish in the Law on Constitutional Justice that it is not possible to file an amparo action against decisions of private individuals, such as arbitrators, following the example of the Supreme Court of Panama. Otherwise, arbitration loses a certain essence and meaning. It is necessary for the legislator to understand the importance of the role of arbitration in society and that it helps relieve ordinary courts of certain judicial burdens and does not contribute to judicial delays. The arbitrators listed by the Arbitration Centers are lawyers with more than five years of proven experience, without complaints against them, and experts in the matters submitted to their jurisdiction.Conciliation and Arbitration Law. (2000, December 29). todolegal.app.https://www.todolegal.app/laws/168-ley-de-conciliacion-y-arbitraje Law on Constitutional Justice. (2004).https://www.tsc.gob.hn/web/leyes/Ley%20Sobre%20Justicia%20Constitucional%20(07).pdfSánchez G, M., & Chevalier, A. E. (2023).LexLatin | Amparo is not available against arbitration awards; the Supreme Court of Panama's ruling. LexLatin.https://lexlatin.com/opinion/laudos-arbitrales-amparo-criterio-corte-suprema-panamaWritten by: Saul Aguilar