Jonathan C. Hamilton, “Latin American Arbitration in Comparative Perspective” (2007)

The growth of arbitration in Latin America, and corresponding tensions, are evident in the comparative developments in Latin American countries. Courts are grappling with the application of arbitration laws. In addition, in some countries, concerns have arisen regarding the availability of arbitration to resolve disputes. These developments will shape the ongoing evolution of arbitration across the region.

After a history of hostility toward arbitration, Latin American countries have transformed the legal framework for arbitration in the region over the past decade or so. With respect to commercial arbitration, numerous countries have modernized their arbitration laws, usually based on the UNCITRAL Model Law on International Commercial Arbitration. Most countries have ratified the 1958 United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention") and the 1975 Inter-American Convention on International Commercial Arbitration ("Panama Convention").

With respect to investment arbitration, most Latin American countries have ratified the Convention on the Settlement of Disputes between States and Nationals of Other States ("ICSID Convention") and many have concluded multiple bilateral investment treaties ("BITs"), free trade agreements or multilateral conventions allowing investment disputes with host states to be submitted to arbitration. Among the latter, the North American Free Trade Agreement (NAFTA) and the Free Trade Agreement between the United States, the Dominican Republic and Central America (DR-CAFTA) are noteworthy.

The transformation of the region's arbitral framework has led to the increase in the inclusion of arbitration clauses in commercial contracts, and an increase in the number of investment arbitrations involving Latin American parties. The evolution of the framework continues.

The ICC reported that Latin American parties were involved in 83 ICC arbitrations during the year 2000. This number grew to 151 in 2006. During the same timeframe, the numbers grew over 50 percent for Mexico and increased six-fold for Brazil.

In the case of ICSID arbitration, Latin American states were respondents in 26 percent of the total concluded cases and 50 percent of the cases which remain pending.

The growth of arbitration in Latin America, and corresponding tensions, are evident in the comparative developments in Latin American countries over the last several years. Across Latin America, courts are grappling with the application of arbitration laws. In addition, in some countries, concerns have arisen regarding the availability of arbitration to resolve disputes — whether commercial or investment — involving states and state-owned entities. Others, like Bolivia, Ecuador and Venezuela have taken or threatened to take steps to curb recourse to investor-State arbitration. These developments will shape the ongoing evolution of arbitration across the region.

The growth of arbitration in Latin America, and corresponding tensions, are evident in the comparative developments in Latin American countries over the years. These developments will shape the ongoing evolution of arbitration across the region.

Jonathan C. Hamilton