PUERTO RICO Trends and Developments Contributed by: Ricardo F. Casellas Sánchez and Carla S. Loubriel Carrión, Casellas Alcover & Burgos
agreement or transaction. However, where the par - ties have delegated questions of scope, applicability or validity to the arbitrator (expressly, or by adopting the rules of an arbitral organisation), a court may not reach into those questions unless a party challenges the delegation itself, specifically and with particularity. The Supreme Court of Puerto Rico’s first substantial engagement with these questions since the enactment of the AAPR came in Sierra Lugo v Sunrun PR Opera- tions , LLC , 2026 TSPR 76 (10 July 2026). A residential customer sued the lessor of a photovoltaic system and its installation partner for breach and damages, pleading in the alternative that her consent had been vitiated by misrepresentations as to the identity of her counterparty and that she had signed electroni - cally without an opportunity to review the document. The lease contained a broad arbitration clause that expressly submitted to the arbitrator “the determi - nation of the scope or applicability of this arbitration agreement”, designated JAMS under its streamlined rules, and stated that the agreement to arbitrate was governed by the FAA. The trial court dismissed with prejudice; the Court of Appeals reversed and ordered an evidentiary hearing on the clause’s validity. The Supreme Court modified. Applying the separabil - ity doctrine of Buckeye Check Cashing , Inc v Card- egna , 546 U.S. 440 (2006), adopted in S . L . G . Méndez - Acevedo v Nieves Rivera , 179 P.R. Dec. 359 (2010), and the delegation rule of Rent - A - Center , West , Inc v Jackson , 561 U.S. 63 (2010), the Court held that in the absence of allegations directed at the delegation clause itself, the judicial forum has no power to adju - dicate the validity, scope or applicability of the arbitra - tion agreement. Here the allegations of vitiated con - sent were aimed at the lease as a whole, and the later assertion that the arbitration clause specifically had been procured by fraud failed the particularity require - ment of Rule 7.2 of the Rules of Civil Procedure. The Court also reaffirmed that neither a contract of adhe - sion nor an unnegotiated forum-selection clause is void for that reason alone. Turning to remedy, the Court held, based on Smith v Spizzirri , 601 U.S. 472 (2024), and Article 3 of the repealed 1951 Act, that dismissal with prejudice was error: once all claims were held arbitrable and a stay
had been sought, a stay was mandatory. The AAPR appears to go further. Article 2.05 (d) provides that once the court is apprised that an action before it belongs in arbitration, it shall immediately stay the judicial proceeding and order arbitration – apparently dispensing with the party application that FAA Sec - tion 3 and Spizzirri presuppose. Notably, the Court declined to apply the AAPR, holding that the 1951 Act governed as the statute in force at the time of the events. The Court was not unanimous. Three Justices dis - sented, would have ordered an evidentiary hearing on the formation of the contract, and questioned whether separability holds where consent is itself in issue and the agreement is one of consumer adhesion. The majority also reserved two questions in footnote 32: whether arbitration clauses in residential photovoltaic lease agreements offend public policy, and whether a clause that ousts the jurisdiction of a regulatory agen - cy is voidable under Article 1249 (g) of the Puerto Rico Civil Code of 2020. The intermediate appellate courts have also swiftly rebuked challenges to the validity of arbitration provi - sions after the enactment of the AAPR. See Maisonet Rivera v Gobierno Mun . de Aibonito , TA2026CE00285, 2026 WL 1067890 (TA March 27, 2026) (did not issue certiorari, but in dicta rejected contention that a claim of dolus invalidating consent to the agreement, by itself an arbitrable claim, invalidated the separate arbi - tration clause; concluded that arbitration agreement was valid, and compelled arbitration under Article 2.05 of the AAPR); Román Martínez v Universal Properties Realty Gov ’ t Servs LLC , TA2025CE00478, 2026 WL 747394 (TA Feb. 5, 2026) (confirmed stay of litigation pending arbitration and rejected generalised attack to consent or unconscionability of agreement as grounds to invalidate separable arbitration clause). Sierra Lugo further supplies the Supreme Court’s first reading of Article 2.03 of the AAPR. Footnote 19 states that the AAPR adopts the federal framework and har - monises it with local legal tradition: under Article 2.03 (b), the court decides whether an arbitration agree - ment exists and whether a controversy is subject to it, unless the parties expressly agree otherwise or agree contractually that the arbitration will be governed by
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