What is the regime of challenges to arbitral awards in arbitrations seated in Peru?

Legal nature of the award and its res judicata effect 

Within the Peruvian legal system, an arbitral award holds a position equivalent to a court judgment as regards its substantive effects. Article 59 of Legislative Decree No. 1071 (Peruvian Arbitration Law) is categorical: every award is final, not subject to appeal, and mandatorily enforceable from the moment it is notified to the parties, and it produces res judicata effects. There is no second instance and no judicial review of the merits of the dispute. This equivalence means that the award enjoys the same immutability as a final judicial decision, so that the matters decided cannot be litigated again in any forum, unless one of the statutory grounds for setting aside is applicable.

This legal nature extends to enforcement: the interested party may seek arbitral enforcement (Article 67) or judicial enforcement (Article 68), without the enforcing authority being able to review the merits. The court issues an enforcement order solely on the basis of a copy of the award, and any opposition by the enforcing party is limited to proving performance or the existence of an effective suspension.

Challenging the award: a single and exceptional route 

The Peruvian system adopts a restrictive, single-track challenge model. Article 62(1) of Legislative Decree No. 1071 provides that an award may only be challenged by an application to set aside, which is the sole means of challenge and is aimed exclusively at reviewing its validity on the exhaustively listed grounds in Article 63. Any other form of challenge is expressly excluded: no appeal is available, nor any ordinary remedy intended to review the merits of the arbitral decision.

This architecture reflects party autonomy: by submitting the dispute to arbitration, the parties implicitly waived judicial control over the merits. In international arbitration, the system even allows a total waiver of the remedy, or its limitation to specific grounds, where neither party has any link to Peruvian territory (Article 63(8)).

Grounds for setting aside: exhaustiveness and differences between domestic and international arbitration

Article 63 of Legislative Decree No. 1071 provides a closed list of grounds, to be interpreted strictly. The party seeking to set aside bears the burden to plead and prove the invoked ground. The grounds are as follows:

a) That the arbitration agreement is non-existent, void, voidable, invalid, or ineffective. b) That a party was not duly notified or was unable, for any reason, to assert its rights—a ground the Supreme Court of Justice of Peru has linked to the due reasoning of the award. c) That the composition of the tribunal or the arbitral proceedings did not comply with the parties’ agreement, the applicable rules, or Legislative Decree No. 1071. d) That the tribunal decided matters not submitted to it—if the excess is separable, the setting aside is only partial. e) That the tribunal decided matters manifestly not capable of settlement by arbitration, in domestic arbitration. f) That the subject matter of the dispute is not capable of settlement by arbitration, or that the award is contrary to international public policy, in international arbitration. g) That the dispute was decided outside the time limit.

Two admissibility rules apply across the board. First: grounds (a), (b), (c) and (d) are only available if they were expressly raised before the arbitral tribunal and dismissed (Article 63(2)). Second: setting aside is not available if the ground could have been cured by the mechanisms in Article 58 (post-award requests) and the party failed to request them (Article 63(7)).

Limits of judicial review 

Article 62(2) of Legislative Decree No. 1071 establishes the cardinal rule of the system: the application is decided by declaring only the validity or the nullity of the award. It is prohibited—on pain of liability—to rule on the merits of the dispute, on the substance of the decision, or to assess the tribunal’s criteria, reasoning, or interpretations.

The judge cannot replace the arbitrator or impose a different solution to the conflict. The Superior Court acts as a body of procedural legality control, not as a second instance on the merits. This restraint has been consistently reaffirmed by the Supreme Court, which has declared inadmissible or unfounded those challenges that, under the guise of a formal ground, in reality seek to question the arbitrator’s evaluative or interpretative judgment.

Set-aside proceedings and enforcement of the challenged award 

Set-aside proceedings commence when the aggrieved party files the application before the competent Superior Court, identifying the invoked ground and supporting it with argument and documentary evidence—the only admissible form of evidence. The Court reviews the formal requirements and decides immediately whether to admit it; if admitted, it serves the counterparty so that it may submit its arguments and documentary evidence.

Once both parties’ positions are defined, the case proceeds to a hearing. The decision is binary: it declares the award valid or sets it aside in whole or in part.

A cassation appeal to the Civil Chamber of the Supreme Court is available against a decision setting aside the award. If the appeal is dismissed, the Superior Court’s decision is final and not subject to further challenge, because cassation is only available where the award was in fact set aside (Article 64(5)).

Once nullity is declared, Article 65 of Legislative Decree No. 1071 distinguishes the effects depending on the ground: an invalid agreement opens the judicial route; a breach of the right to be heard requires restarting the arbitration from the moment of the violation; a defect in composition or procedure entails reconstitution or remittal; an excess of jurisdiction or a non-arbitrable matter allows a new arbitration or judicial claim; and a decision rendered out of time allows a new arbitration or, in domestic arbitration, the Superior Court itself may decide the merits.

Enforcement of the award during the challenge. Filing an application to set aside does not suspend the obligation to comply with the award nor prevent its arbitral or judicial enforcement (Article 66). The award remains fully enforceable from the time it is notified. To obtain a stay, the challenging party must expressly request it and provide a joint and several bank guarantee, unconditional and payable on first demand, in favour of the counterparty, in an amount equivalent to the value of the award. If the award is not quantifiable in money, the amount is fixed by the arbitral tribunal in the award itself or, failing that, by the Superior Court upon application. The guarantee must be renewed for the duration of the proceedings, failing which immediate enforcement may follow. If the challenge is dismissed, the guarantee is delivered to the prevailing party; if the challenge succeeds, it is returned to the challenging party.

Constitutional amparo against an award: the “Maria Julia” precedent 

A question of particular practical relevance is whether, in the face of an award that infringes constitutional rights, it is possible to bring an amparo action instead of an application to set aside. The Peruvian Constitutional Court settled this definitively in the judgment issued in Case File No. 00142-2011-PA/TC, María Julia.

The central holding is that an application to set aside is not a prior remedy to amparo, but rather a specific procedural route that is equally satisfactory, pursuant to Article 5(2) of the Constitutional Procedural Code—a criterion also reflected in the Twelfth Complementary Final Provision of Legislative Decree No. 1071. Accordingly, a direct amparo action against an award is generally inadmissible, even where due process or effective judicial protection is invoked; and a party that has pursued set-aside proceedings cannot afterwards bring an amparo action.

The precedent admits three exceptional scenarios: (a) direct infringement of a binding precedent of the Constitutional Court, provided it was expressly raised beforehand before the arbitral tribunal; (b) the arbitrator’s improper exercise of diffuse constitutional review over a rule declared constitutional, also with a prior express objection; and (c) an amparo action filed by a third party not bound by the arbitration agreement who is directly and manifestly affected, without requiring a prior objection.

In conclusion, Peru’s regime for challenging arbitral awards rests on three pillars: (i) the single remedy—setting aside as the only available route; (ii) the exhaustive nature of the grounds, which prevents any interpretative expansion; and (iii) the absolute prohibition on merits review, which enshrines the irreversibility of the arbitral tribunal’s assessment before the courts. Added to these is the constitutional filter of the María Julia precedent, which makes the setting-aside application the paradigmatic equally satisfactory route and confines amparo to an absolutely exceptional corrective mechanism. Taken together, this statutory and case-law framework, consistent with UNCITRAL Model Law standards, ensures the effectiveness of arbitration as a dispute-resolution mechanism, limiting judicial intervention—ordinary and constitutional—to the protection of essential procedural guarantees, without turning the courts into a second arbitral instance.