DOMINICAN REPUBLIC Trends and Developments Contributed by: César Joel Linares Rodríguez, LMV Advisors – Central Law Dominican Republic
Court of Justice, Civil Chamber, Judgment No. SCJ- PS-23-1546). The real problem lies in the fact that, because the will was expressed in a unified manner in a single con - tract, the arbitration clause inevitably shares the same defects in consent that affect the legal act containing it. It would be chimerical to construct a moment at which consent is separated in order to argue for the strict autonomy of the arbitration clause. If there was no valid will in the principal transaction due to deceit or fraud, the requirements of Article 1108 of the Civil Code are not satisfied with respect to the act as a whole. Attempting to separate a preventive clause from a contract that is null due to fraud is untenable, as it seeks to validate consent that, from the perspective of public policy, never came into existence. If this analysis were applied to the manifestation of the state’s consent to arbitrate, the scenario would be even more complex, taking into account that such consent may be presented in three different forms. • Traditional contractual form – this consists of the traditional insertion of an arbitration clause into an administrative or commercial contract. • Legislative form – this occurs when the state, through its domestic legislation, makes a public and open offer to arbitrate disputes arising from investments that meet the requirements provided for by law. • International agreement – this is expressed in an international treaty (bilateral or multilateral) which, after being ratified by the corresponding body – in our case, the National Congress – is incorporated as law into the Dominican legal system. As a general rule, when the state challenges the valid - ity of a contract and, with it, the jurisdiction of the arbitral tribunal – recurrently alleging the existence of fraudulent manoeuvres (corruption), or arguing that its domestic laws or procedures for validly obtaining state consent were not complied with – arbitral tribu - nals tend to reject those allegations.
Relying on the doctrine of one’s own acts and the principle of good faith, and under the protection of the autonomy of the arbitration clause, arbitrators retain their jurisdiction, compelling the state to litigate before private justice. The bilateral analysis of good faith and the conduct of the parties in determining the jurisdiction of the arbitral tribunal The legal grounds generally used to retain the juris - diction of arbitral tribunals when the state challenges it should be analysed bilaterally. This would provide greater balance to the examination by considering the participation of the party adverse to the state in the alleged fraudulent or deceitful manoeuvres. It is also essential to assess whether the counterparty acted prudently and diligently before contracting with the state, as any good businessperson would. Only through this bilateral examination can it be deter - mined whether the private contracting party’s defence – based on the principles of legitimate expectations, good faith, or the conduct previously displayed by the state – is legally sustainable or whether, on the contra - ry, such defence is destroyed by applying the maxim nemo auditur propriam turpitudinem allegans: no one is permitted to rely on his or her own fault, negligence, or illegality in order to claim a right before the courts. Fraudulent manoeuvres or acts, generically charac - terised as corruption, are generally carried out for the purpose of securing a contract with the state. This implies, by definition, the indispensable coexistence of the perpetrator of the deceptive manoeuvres and the injured person or errans. Therefore, the validity analysis must necessarily bal - ance the conduct of both actors. It is necessary to examine whether the private counterparty participated in or encouraged such manoeuvres or whether, on the contrary, it conducted prior due diligence that would have allowed it to identify whether the state body complied with all domestic legality requirements necessary to validly consent. Conducting the aforementioned prior due diligence should be regarded as an elementary standard if it
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