ECUADOR Law and Practice Contributed by: Oswaldo Santos Dávalos and Bernarda Haro Aillón, Santos Burbano de Lara
Between Private Parties In judgments 2342-18-EP/23 and 2520-18-EP/23, the Constitutional Court held that it is for the legislature to define which matters are capable of settlement. Disputes over disposable rights are arbitrable, save where expressly prohibited by law, such as criminal liability or issues pertaining to the civil status of indi - viduals. With the Public Administration The test is more restrictive. In judgment 74-21-IN/25 the Constitutional Court stated that the concept of a matter capable of settlement, proper to relations between private parties, does not transfer automati - cally to disputes involving public entities. State enti - ties act subject to the principle of legality and exercise non-disposable powers. Arbitrability depends on the existence of constitutional or statutory authorisation to submit a dispute to arbitration. Who Decides Arbitrability In judgment 2520-18-EP/23 the Constitutional Court distinguished between objective arbitrability, concern - ing the subject matter, and subjective arbitrability, concerning the parties, and held that the assessment of both falls to the arbitral tribunal at the sustanciación hearing under Article 22 of the LAM. On the scope of that criterion in an annulment action, see 11.1 Grounds for Appeal . 3.3 National Courts’ Approach Ecuadorian judges apply arbitration agreements con - sistently, in line with constitutional case law. In judgment 707-16-EP/21 the Constitutional Court held that the power to rule on the validity and scope of an arbitration clause belongs to the arbitrators, by application of the kompetenz - kompetenz princi - ple, and that in case of doubt the pro arbitri principle prevails. In judgment 1758-15-EP/20 it specified that judges must not rule on the validity or scope of the arbitration agreement, but only verify whether the dis - pute falls within the scope of the agreement. In judgment 1010-18-EP/23 the Court identified the two effects of the arbitration agreement. The positive effect confers on the arbitrators the power to rule on their own jurisdiction. The negative effect forbids sub -
mitting the dispute to state courts and requires judges to decline jurisdiction once they verify the existence of the agreement. Law Applicable to the Arbitration Agreement The LAM contains no conflict-of-laws rule on the law applicable to the arbitration agreement. The parties may agree on it. Absent such agreement, in practice the agreement is governed by the law of the seat of the arbitration. We are not aware of any case law establishing a different criterion. 3.4 Validity An arbitral clause can be considered valid irrespective of the validity of the contract in which it is included. Article 5 of the LAM enshrines the principle of sepa - rability expressly. 4. The Arbitral Tribunal 4.1 Limits on Selection The parties’ autonomy to select arbitrators is broad and subject to few restrictions. Article 3 of the LAM requires arbitrators to be lawyers where the arbitration is not ex aequo et bono. Article 19 of the LAM excludes those who lack capacity to appear in court on their own behalf. In administered arbitrations, Article 16 of the LAM allows the parties, by common agreement, to appoint arbitrators from outside the centre’s roster. Absent agreement, the centre’s rules may require the appoint - ment to fall on members of its roster. 4.2 Default Procedures Article 16 of the LAM provides for a draw as the default mechanism for appointment. It applies where the parties do not make the appointment or fail to agree on it, and is conducted before the president of the arbitration centre. In practice, this method applies in most cases. The same rule governs multiparty arbitrations, unless the arbitration agreement provides otherwise.
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