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 focuses on reforms to enhance the country’s arbi - tration framework. 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 require - ments for arbitration agreements, including the need for clarity and mutual consent between the parties, but does not require a prior written arbitral 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an arbitration commitment prior to commencing the arbitration proceedings, as required by previous legislation, is repealed by the Act.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 hearings 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 scope of judicial intervention in arbitration, emphasising 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 set out in a document signed by the parties or in an exchange of letters, communications or electronic communications that evidence the existence of the agreement. In addition, a reference in a contract to a document containing an arbitration clause constitutes an arbitration agree - ment, provided the contract is in writing and the refer - ence implies that the 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. According to the legal defini - tion, case law has determined that criminal and fam - ily law claims are excluded from arbitration. Labour disputes have also generally been excluded, although this remains a topic of ongoing debate. 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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