URUGUAY Law and Practice Contributed by: Leonardo Melos, Bergstein Abogados
5.6 Jurisdiction Over Third Parties There are no specific regulations that allow a third par - ty to join an existing arbitration. Given that the local courts treat arbitration as an exceptional jurisdiction, a third party that is not a signatory to the arbitration agreement cannot participate in the proceedings. Participation of third parties is limited to the effect of interim measures and to the mandatory gathering of evidence. The only option for a third party to par - ticipate in an existing arbitration would be the explicit consent of the claimant and defendant during the arbi - tration proceedings. Arbitral tribunals are allowed to award interim relief or preliminary measures. However, it is customary for the parties to seek interim relief from local courts. The practice of pursuing interim relief prior to arbitration with local courts is based on their powers to enforce the decision more expeditiously. The lack of arbitra - tors’ power to enforce the decision as a consequence of the absence of coercive powers (so-called imperi - um) limits the ability to request interim measures from the arbitral tribunal. 6. Preliminary and Interim Relief 6.1 Types of Relief Having said that, according to Article 17 of the AICA and unless otherwise agreed by the parties, the arbi - tral tribunal may – at the request of one of the parties – order the adoption of precautionary measures that it deems necessary with regard to the subject mat - ter of the dispute. The arbitral tribunal may require the applicant to provide a performance bond to cover potential damages. Precautionary measures issued by an arbitral tribunal are binding on the parties. If the party subject to an interim measure does not comply with the arbitral tri - bunal’s interim award, the award may be enforced by the competent local court. As per the AICA, a precautionary measure would be a temporary measure granted in the form of an award, whereby – at any time prior to the issuance of the final award – the court orders one of the parties to:
ment. In fact, case law tends to confirm the jurisdiction of the arbitral tribunal. In this connection, it is worth mentioning that the Supreme Court of Justice ruled that there is no reason to exclude labour disputes from the arbitral jurisdiction (Ruling No 596/2017). Although the ruling of the Supreme Court of Justice was not unanimous and there have been recent conflict - ing decisions issued by the labour appellate courts, these developments reveal that Uruguayan courts favour arbitration as an alternative method for resolv- ing disputes. The reverse side of this judicial policy is the rigorous analysis conducted by the local courts of matters excluded from arbitration or of matters other than those specifically agreed to be arbitrated in the arbitration agreement. 5.3 Timing of Challenge See 5.1 Challenges to Jurisdiction . 5.4 Standard of Judicial Review for Jurisdiction/Admissibility The standard of judicial review is a de novo analysis. Higher courts act as though they were considering the question for the first time, affording no deference to the decisions of the lower courts. 5.5 Breach of Arbitration Agreement Parties subject to an arbitration agreement are not prevented from pursuing an action with local courts. Local courts do not raise the absence of jurisdiction ex officio; the defendant must raise the existence of an arbitration agreement and request a declaration of that absence. According to Article 475 of the CPC, if a party in a local arbitration fails to raise the absence of jurisdiction at the time of answering the complaint, it will be interpreted that the party has waived the arbitration clause. However, in international arbitration under the AICA, the court to which a dispute over a matter subject to an arbitration agreement is submit - ted will refer the dispute to arbitration if requested by any of the parties at the time of filing the first brief on the merits at the latest. The only exception is when it is proven that said agreement is null, ineffective or impossible to enforce. The fact that a party has commenced litigation with local courts does not suspend or prevent the initiation or continuation of the arbitration proceedings.
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