[vc_row][vc_column][vc_column_text]
Procedure for the recognition and enforcement of international awards
[/vc_column_text][us_separator][vc_column_text]An Arbitration Award is the written and reasoned decision that resolves all controversial issues submitted to an Arbitration Tribunal, issues that are raised by both the claimant and the defendant in the event of a counterclaim. Awards can be issued by domestic or international Arbitration Tribunals. In this analysis, we will focus on the latter. It is important to begin by defining when an arbitration is international. According to the Honduran Conciliation and Arbitration Law (LCyA) – based on the UNCITRAL Model Law -, Article 86 establishes that an arbitration will be international when:
- The parties to an arbitration agreement have, at the time of its conclusion, their domiciles in different states;
- If one of the following places is located outside the State in which the parties have their domicile:
[/vc_column_text][vc_column_text]
- The place of arbitration – understood as theseat of arbitrationor as it is known in English,seat of arbitration-, if this has been determined in the arbitration agreement or pursuant to it is different.
- The place of performance of a substantial part of the obligations of the legal relationship or the place with which the subject of the dispute has the closest relationship.
In this sense, the Awards issued by an international Arbitration Tribunal (as statedsupra) have a recognition and enforcement procedure regulated by international treaties and Honduran law.[/vc_column_text][us_separator][vc_column_text]
Recognition
[/vc_column_text][vc_column_text]The legal basis for the recognition of these awards can come from different sources, as discussed below. First, Honduras has signed the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the Inter-American Convention on International Commercial Arbitration (Panama Convention). These Conventions, in Articles III and 4 respectively, contain the conventional provision requiring the recognition of arbitral awards. The New York Convention, for example, also contains provisions regulating when a State may refuse recognition and enforcement of an award (Article V). These provisions include provisions that, according to the country's law, the subject matter of the dispute is not subject to arbitration or that recognition or enforcement of the award would be contrary to the country's public policy, a highly controversial issue. In any case, the Constitution of the Republic of Honduras, in its second paragraph of Article 15, establishes that:Honduras proclaims the validity and enforceability of international arbitration and judicial decisions as unavoidable.Likewise, a similar provision is found in the Law for the Promotion and Protection of Investments, which in its article 22 establishes that:[I]nvestors are guaranteed full recognition of international arbitration awards and those issued in accordance with the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), the Inter-American Convention on International Commercial Arbitration (Panama Convention) and the Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID Convention) and the reciprocal investment protection treaties approved and ratified by the State of Honduras.In summary, these lines and provisions cited above serve as a conventional, constitutional and legal basis to determine the State's obligation to recognize the Awards issued by international Arbitral Tribunals.
Execution
[/vc_column_text][vc_column_text]Article 89 of the LCyA of Honduras establishes that:Arbitral awards issued abroad, as well as those considered international pursuant to this law, shall be enforced in Honduras in accordance with the treaties, pacts, or conventions in force in the Republic.In addition to the above, the LCyA establishes that the competent body to request recognition and enforcement of the award shall be the Supreme Court of Justice. The award must be submitted together with the duly legalized arbitration agreement, and if it was issued in a language other than Spanish, a certified translation must be submitted by an official translator, a sworn translator, or a diplomatic or consular agent in accordance with Article IV of the New York Convention and Articles 90 and 91 of the LCyA of Honduras. Different from the body to which the request for enforcement of the award is made, once said request has been resolved by the Supreme Court of Justice in accordance with Article 755 of the Code of Civil Procedure, the competent jurisdiction for enforcement shall be the Court of First Instance of the domicile of the convicted person. In the event that the latter does not reside in Honduras, before the Court of First Instance of the place where the thing to be delivered is located, or before the one designated by the executor because the goods to be seized are located there.[/vc_column_text][us_separator][vc_column_text]
Conclusion
Both the recognition and enforcement of an international arbitration award are based on a confluence of conventional, constitutional, and legal provisions. Honduras has declared the validity and mandatory enforcement of an international arbitration award to be inescapable. Recognition must be requested before the Supreme Court of Justice. The Court will issue a judgment—against which no appeal is available—either recognizing and granting full effect to the international arbitration award or denying its recognition. If recognition has been granted, its enforcement will be carried out by another jurisdictional body, pursuant to the provisions of Article 756 of the Civil Procedure Code. Based on our practice in domestic and international arbitrations, at Lexincorp Central American Law Firm we are in a position to advise on this matter and carry out the procedural actions for this purpose. For more information, please contact fvilleda@lexincorp.com.
Written by:
[/vc_column_text][us_person image=”8016″ name=”Fabián Villeda ” role=”Asociado” link=”url:http%3A%2F%2Flexincorp.com%2Fequipo_honduras%2Ffabian-villeda%2F|title:Fabi%C3%A1n%20Villeda||” layout=”cards” img_size=”full”][/us_person][/vc_column][/vc_row]
