URUGUAY Law and Practice Contributed by: Leonardo Melos, Bergstein Abogados
3. The Arbitration Agreement 3.1 Enforceability
The AICA does not deviate in any significant way from the UNCITRAL Model Law. 2.2 Changes to National Law Following the enactment of the AICA in 2018, the local arbitral regulations have been updated by Act 20.257, passed on 25 April 2024 (ALA). The ALA primarily deals with reforms to enhance the arbitration framework within the country. The Act modernises and clarifies the legal framework governing arbitration in Uruguay. It aims to align Uruguay’s arbitration practices with international standards and enhance the efficiency and effectiveness of arbitration proceedings. A few of the key reforms can be summarised as fol - lows. • Arbitration agreement – the Act specifies the requirements for arbitration agreements, including the need for clarity and mutual consent between parties, but does not require a prior arbitral written agreement. • Prior commitment to arbitration – the require - ment for granting an arbitration commitment prior to commencing the arbitration proceedings, as required by previous legislation, is repealed by the Act. • Arbitral procedure – the Act provides detailed guidelines on the arbitral process, including the appointment of arbitrators, the conduct of hear - ings, and the issuance of awards. • Enforcement of awards – the Act outlines proce - dures for the recognition and enforcement of arbi - tral awards, emphasising compliance with interna - tional conventions to which Uruguay is a party. • Role of institutions – the Act establishes or rein - forces institutional mechanisms for supporting arbitration, including the role of arbitration centres and the appointment of arbitrators. The Act defines the extent of judicial intervention in arbitration, focusing on ensuring minimal interference while safeguarding procedural fairness and the rule of law.
In order to be valid, the arbitration agreement must be in writing and take the form of an arbitration clause included in a contract or take the form of a separate agreement. According to the AICA, the agreement is considered written when it is reflected in a document signed by the parties or in an exchange of letters, communications, or means of electronic communi - cation that can evidence the existence of the agree - ment. In addition, a reference made in a contract to a document containing an arbitration clause constitutes an arbitration agreement as long as the contract is in writing and the reference implies that said clause is part of the contract. 3.2 Arbitrability According to Article 476 of the Civil Procedural Code (CPC), matters that may not be referred to arbitration are those that relate to rights that cannot be settled or waived by a party. In light of the legal definition, case law has interpreted criminal and family law claims as excluded from arbitration, along with – although this has been a source of recent debate – labour disputes. A recent ruling from the Supreme Court of Justice found that there is no reason to exclude labour dis - putes from local or international arbitration. How - ever, labour appellate courts have rejected the pos - sibility of arbitrating labour disputes, arguing that an employee cannot waive a most favourable forum and legal framework in favour of their employer. Moreover, labour appellate courts understand that the employee cannot agree to arbitrate a labour dispute because the employee is not free to negotiate the terms and conditions of the agreement. 3.3 National Courts’ Approach As per Article 28.1 of the AICA, the arbitral tribunal must decide the dispute in accordance with the rules of the law chosen by the parties as applicable to the merits of the dispute. Any indication of the law or legal system of a particular state will be understood to refer – unless otherwise stated – to the substantive law of that state and not to its rules on the conflict of laws.
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