ECUADOR Law and Practice Contributed by: Oswaldo Santos Dávalos and Bernarda Haro Aillón, Santos Burbano de Lara
sion. According to the COGEP, the general rule is that each party bears its own costs, unless one party has acted in bad faith. Arbitral tribunals in domestic arbitrations usually fol - low the COGEP in decisions on costs: the claimant bears the costs of the arbitration, and each party bears its own lawyers’ fees. In international arbitration, tribunals more frequently apply the “costs follow the event” approach. According to the COGEP, public entities cannot be ordered to pay costs. In judgment 1573-15-EP/21 the Constitutional Court set aside the costs decision contained in an award because the tribunal did not identify the legal basis allowing it to impose them, nor characterise the conduct of a public company as reckless or in bad faith. The dissenting opinion argued that no provision prohibits ordering costs against the state in arbitration. Interest Interest is governed by the applicable substantive law and, absent an agreed rate, by the rates set forth by the Central Bank of Ecuador. At the enforcement stage, an expert liquidates the principal, interest and costs. Article 30 of the LAM declares awards non-appealable and provides that they are not subject to any recourse other than that established by that law. There is no review of the merits. The horizontal remedies available within the arbitration are described in 10.1 Legal Requirements . Annulment Action Article 31 of the LAM regulates annulment action as the sole means to challenge an award. It does not allow a review of the merits of the case and is filed before the arbitrator or arbitral tribunal within ten days of the award becoming final. The tribunal transmits the file within three days and the president of the provin - 11. Review of an Award 11.1 Grounds for Appeal
cial court, who has to rule on the application within 30 days (in practice, the annulment stage can take more than 12 months). The grounds for annulment are exhaustive: violations of the parties’ right to due process; a ruling on matters not submitted to arbitration or an ultra or extra petita award; and violations of the procedure for appointing arbitrators or constituting the tribunal. In judgments 323-13-EP/19 and 31-14-EP/19, the Constitutional Court confirmed that exhaustive character of those grounds. In judgment 2520-18-EP/23, the Court con - firmed that questions on the tribunal’s jurisdiction can - not be raised in the annulment stage. Most annulment applications are rejected. The annulment action does not suspend enforcement of the award. Article 31 of the LAM allows a request for suspension upon the posting of security. Constitutional Avenue The EPA is permissible when the award breaches constitutional rights and no ground for annulment applies. EPAs are heard by the Constitutional Court. Most EPAs are rejected. Its limits are described in 12.3 Approach of the Courts . 11.2 Excluding/Expanding the Scope of Appeal The grounds in Article 31 of the LAM are exhaustive and do not admit contractual expansion. Whether the parties are allowed to exclude the scope of an annul - ment is open to debate. Article 30 of the LAM excludes any recourse not pro - vided for in that law. Article 34 of the LAM refers to the judge hearing the annulment action “or any other recourse to which the parties have submitted” (a refer - ence invoked to support the possibility of agreeing on an additional instance). The majority view rejects this as regards recourse before state judges. In judgments 1703-11-EP/19 and 1059-15-EP/20 the Constitutional Court held that the annulment action is not an ordinary challenge (as opposed to an appeal) and that no other challenge is permissible.
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