DOMINICAN REPUBLIC Trends and Developments Contributed by: César Joel Linares Rodríguez, LMV Advisors – Central Law Dominican Republic
Reflections on Party Autonomy, Consent, and the Principle of Separability of the Arbitration Clause Party autonomy Arbitration rests on the fundamental principle of party autonomy. This prerogative constitutes the legal fac - ulty that natural or legal persons possess to freely shape their own relationships, deciding the scope of their rights and the obligations they wish to assume. In the field of obligations and transactions, this prin - ciple grants the freedom to establish rules of conduct and define them in contracts that bind their signato - ries with the same binding force as law. In international trade, it also translates into the power to add to the agreement commercial usages, profes - sional codes of conduct and/or recommendations recognised as best practices, without these strictly belonging to any particular legislation. However, the exercise of party autonomy is not absolute; its effec - tiveness is conditioned upon respect for public policy laws, morality, and national and international good customs that sustain the legal order. Consent and its validity as a manifestation of party autonomy For party autonomy to materialise in a substantive and legal manner, it must be expressed through consent. Consent is the actual manifestation of will by which a person decides to give approval for something to occur or to assume a particular obligation. This legal relationship does not require solemn for - malities; it only requires the manifestation – whether express or tacit – of the intention to be legally bound with respect to a determined object and cause. It should be clarified that the most commonly used manifestation of consent is written consent, which leaves material evidence of its existence or a means of objectively establishing it and thereby avoids ques - tions as to whether or not consent existed. Consequently, if consent is absent or vitiated, it is legally impossible for a valid obligation to arise. For the legal relationship to be valid, the expression of will must be free from circumstances that alter it, condi - tion it, or distort the reality upon which the decision
to give consent is based. When consent is obtained through deceitful or fraudulent manoeuvres, nullity affects the genesis of the legal act. Fraud invalidates the document in its entirety because it alters the discernment of the deceived party, caus - ing that party’s acceptance to be based on an artificial premise. Under the general rules of law, obligations arising from bad faith or fraud are affected by abso - lute nullity, which prevents them from producing legal effects. The law neither protects nor makes enforceable an obligation whose material existence resulted from a distortion of the will, since no one is permitted to ben - efit from his or her own fraud or illegality. The conflict in the distinction between contractual consent and the arbitration clause When the parties decide to incorporate a dispute resolution mechanism into their contractual frame - work, they choose to insert an arbitration clause into the body of the document. Prevailing doctrine and modern legislation require this arbitration clause to be treated as an independent contract within the legal transaction from which the dispute to be arbitrated would arise. In short, a contract within the contract. Under this premise, the principle of separability is sus - tained as a legal fiction according to which the agree - ment to arbitrate enjoys autonomy from the economic transaction. The invalidity or nullity of the commercial contract does not affect the continued existence of the arbitration clause. This principle of separability enjoys global recogni - tion in this field. It has been enshrined by the Unit - ed Nations Commission on International Trade Law (UNCITRAL) and adopted by the majority of jurisdic - tions whose arbitration laws are inspired by its guide - lines. The Dominican Republic is no exception; our legal system expressly recognises this autonomy in Article 11 of Law No. 489-08 on Commercial Arbitration, by providing that the nullity of a contract does not nec - essarily imply the invalidity of its arbitration clause,
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