International arbitration law and rules in Argentina

In an important recent development, the Argentine Supreme Court has confirmed that the recognition or enforcement of a foreign award cannot be challenged on grounds of public policy where the arbitral tribunal has already ruled on the issue.

With thanks to Marcelo Cippitelli for his contribution to the Guide.

1.1.1 Argentina has a long history relating to arbitration and the recognition of foreign awards. 

1.1.2 The 1889 Montevideo Treaty on International Procedural Law (revised in 1940) 1 Montevideo Treaty on International Procedural Law (adopted 11 January 1889, ratified by Argentina by Law 3192); Montevideo Treaty on International Procedural Law (adopted 19 March 1940; ratified by Argentina by Law 7771). The original treaty remains in force and official citation is usually to that treaty rather than to the 1940 treaty.  gave foreign awards from Bolivia, Colombia, Paraguay, Peru and Uruguay the same status as judicial decisions.

1.1.3 In 1920, the Supreme Court confirmed the validity of foreign arbitration agreements between private entities, 2 "Couto y Cía v. propietario del velero "Northland" Jurisprudencia Argentina Volumen 10. Págin 833 25/10/1920.  in line with other decisions which recognised foreign jurisdiction clauses. 3 “Señores Pinasco y Cía contra Dodero Hermanos Sobre Competencia” December 14 1916 (Supreme Court Collection Fallos t. 126 page 418”.

1.1.4 Until 2014, arbitration in Argentina was governed by general contractual provisions contained in the former Civil Code and the National and provincial Civil and Commercial Procedure Codes. Today, the legal framework is based on the National Civil and Commercial Code 4 Código Civil y Comercial de la Nación by law 26.994 passed on 1 October 2014.  which came into force in October 2014, and the International Commercial Arbitration Act 5 Ley De Arbitraje Comercial Internacional, Ley 27449, passed on 26 July 2018.  which came into force in July 2018. The National Civil and Commercial Code and the International Commercial Arbitration Act brought Argentinean law more in line with internationally recognised principles of arbitration law. They introduced a broad concept of arbitrability, limited the formal requirements for valid arbitration agreements, and imposed significant restrictions on judicial intervention by state courts.

1.1.5 The National Civil and Commercial Code applies in each province in Argentina. Each province also has its own procedural code which regulates domestic arbitration and enforcement of foreign awards in line with Civil and Commercial Code regulations. In the city of Buenos Aires, the rules governing the procedure of arbitration are set out in Chapter VI of the National Code of Civil and Commercial Procedure (CCCP). Those rules also apply at the federal level. 

1.1.6 Argentina is a party to several international arbitration-related treaties such as the Inter-American Convention on Commercial Arbitration, the ICSID Convention, and the New York Convention, which Argentina ratified on 28 September 1988. 6 The New York Convention was ratified by Law 23.619 and came into force in Argentina on 14 March 1989.  

2.1.1 The provisions of the National Civil and Commercial Code for Arbitration apply to all kinds of domestic arbitration including institutional arbitration, ad hoc arbitration, arbitration at law and ex aequo et bono arbitration.

2.1.2 The International Commercial Arbitration Act provides the legal framework for all types of international commercial arbitration. The CCCP contains the main procedural rules for arbitration proceedings.

2.2.1 The National Civil and Commercial Code, the International Commercial Arbitration Act and the CCCP contain certain principles of universal application. Together they empower arbitrators to determine their own jurisdiction, confirm the principle of separability of the arbitration agreement, and limit judicial intervention in the arbitration process. The legal framework also enables parties to conduct arbitration in a flexible manner.

Agreement of the parties

2.2.2 The basis for arbitral proceedings is the agreement of the parties to settle their dispute by arbitration. 7 National Civil and Commercial Code, art 1649.  It is not possible to enforce an award in Argentina where the tribunal’s decision exceeded the scope of the arbitration agreement.

Due process

2.2.3 Article 18 of the Argentinian Constitution guarantees each party the right to due process and may be used as a ground to challenge the enforcement of a domestic or international award.

Role of the courts

2.2.4 The courts can enforce the interim measures and decisions of the arbitral tribunal but cannot review the basis of them.

3.1.1 An arbitration agreement must be in writing. 8 National Civil and Commercial Code, art 1650.  No specific wording is required. 

3.1.2 An arbitration agreement will be deemed to be in writing if it is concluded between the parties through an exchange of letters or other means of telecommunication or electronic communication (including emails) which provide a record of the arbitration agreement. 

3.1.3 An arbitration agreement can be concluded as a clause forming part of a contract or as a separate agreement. 

3.1.4 Section 1651(d) of the National Civil and Commercial Code excludes arbitration provisions printed in standard form agreements. Nevertheless, case law has confirmed that this exclusion does not apply to contracts between companies or individuals conducting business. 9 Vanger SRL c Minera Don Nicolas National Commercial Appeals Court Panel C 6/6/19.  

3.1.5 Reference in a contract to another document that contains an arbitration agreement may constitute an arbitration agreement provided that such document is part of the contract. 10 Civil and Commercial Code, s 1650; Law 27.449, s 18.  

3.2.1 The National Civil and Commercial Code prohibits the following types of disputes from being resolved by way of arbitration: disputes concerning the legal capacity of individuals, family law, consumer law, criminal law matters (excluding civil indemnification) and labour relations. 11 National Civil and Commercial Code, art 1651.  

3.2.2 Specific rules apply to disputes concerning consumer law, labour law and international arbitration involving the Argentine state. Consumer law disputes must be resolved by public institutional arbitration. 12 Law 24.241, s 59.  Disputes concerning labour law may be dealt with using a specific arbitration procedure set out in section 28 of Law 24.636, after a conciliation stage, although this is rarely used in practice. Arbitration agreements contained in collective labour agreements between employers and trade unions are valid. Where the Argentine state is a party to proceedings, the arbitration is governed by the ICSID Convention and other international conventions.

3.2.3 The National Civil and Commercial Code and International Commercial Arbitration Act allow domestic matters to be decided in a foreign jurisdiction.

3.3.1 Section 1650 of the National Civil and Commercial Code provides that an arbitration agreement in a contract is separable from the contract itself. The courts have consistently upheld the principle of separability. 13 See, for example, Nacional Comercial Appeals Court, Panel D, “Bear Service, S.A. c. Cervecería Modelo, S.A. de C.V. s/ ordinario”, 22 February 2002, published by Microjuris MJ-JU-E-5392-AR.  

3.4.1 If the parties have concluded a valid and enforceable arbitration agreement, they are required to arbitrate all disputes that fall within the scope of that agreement. 

3.4.2 The courts will not have jurisdiction over the dispute unless the arbitral tribunal has not been formed and the arbitration agreement is likely null and void or inapplicable.

4.1.1 The parties are free to decide how many arbitrators will constitute the arbitral tribunal. The parties can appoint a single arbitrator or an odd number of arbitrators.

4.1.2 If the parties have not agreed on the number of arbitrators, the default number will be three. 14  Argentinean Civil and Commercial Code, s 1659.

4.1.3 If the parties agree to adopt the rules of an arbitral institution, the institutional rules will set out the procedure for appointing the arbitrators. In certain Argentinian institutions, the parties may agree to vary these procedures. 15 Centro de Mediación y Arbitraje Comercial (CEMARC) from Argentinean Service and Commerce Chamber (CAC) allows a single arbitrator for certain cases (https://www.cac.com.ar/data/documentos/20_Reglamento%20de%20Arbitraje%20CEMARC%20v.17.05.2017.pdf); or Centro Emresarial de Mediación y Arbitraje allows any agreement by the parties for this procedure (http://www.medyar.org.ar/reglamento-arbitraje-del-centro.php).  

4.1.4 Anyone can be appointed as an arbitrator so long as the person appointed is capable of exercising their civil rights. 16

4.2.1 In domestic arbitration, arbitrators may be challenged by the parties on the same grounds as judges, namely where the arbitrator has:

• a personal or business relationship with one of the parties or their lawyer(s);
• an interest in the outcome of the dispute;
• expressed a prior opinion or recommendation on issues regarding the dispute; or
• received an “important benefit” from one of the parties.

4.2.2 In international arbitration, arbitrators may only be challenged if there are circumstances that could justify doubts concerning their bias or independence, or if they do not have a particular qualification required by the arbitration agreement. 17 Law 27449, s 28.

 4.2.3 The rules of most arbitral institutions set out the procedure for challenging arbitrators. In ad hoc proceedings, the arbitral tribunal is empowered to rule on any challenge within five days of its appointment. Thereafter, a judge is entitled to determine the issue and the judge’s decision cannot be appealed. The arbitration proceedings will be suspended pending the resolution of the challenge before the court. 18 received an “important benefit” from one of the parties.

4.3.1 Once the arbitrators accept their appointment with the parties they must fulfil their duties and obligations. 18 Argentinean Civil and Commercial Code, s 1662.  

4.3.2 If the arbitral tribunal does not issue its award within the time limit stipulated by the parties, it will forfeit its right to be paid and may be liable for any damage or loss caused by the delay.

4.3.3 If an arbitrator issues an award which is contrary to established legal principles, or is based on a false factual analysis, they may be subject to criminal prosecution. Judges have the power to issue fines to arbitrators (ranging from ARS 3,000 to ARS 75,000) and to disqualify an individual from acting as an arbitrator for life. 19 Argentinian Criminal Code, art 269.  

4.4.1 In institutional arbitration, each institution typically has rules governing the payment of administrative fees and the remuneration of arbitrators. However, in ad hoc arbitration, there will be no administrative fees and the remuneration of the arbitrators will be agreed between the parties and the arbitrators. If the parties do not agree on the tribunal’s remuneration and fees, the court may fix them.

4.5.1 There is no provision in Argentinian law granting immunity to arbitrators. 

5.1.1 Section 1654 of the National Civil and Commercial Code empowers arbitrators to determine their own jurisdiction. Unless otherwise stated in the arbitration agreement, the arbitral tribunal has the power to determine its own jurisdiction and the validity of the arbitration agreement in accordance with the principle of kompetenz-kompetenz. 20 Argentinean Civil and Commercial Code, s 1654.  

5.2.1 Arbitral tribunals are empowered to grant interim measures to protect the parties’ rights and the integrity of the arbitral proceedings. The courts can enforce the interim measures and decisions of the arbitral tribunal but cannot review the basis of them.

5.2.2 The arbitral tribunal may, at the request of any party, order such interim measures as it considers necessary in respect of the subject of the dispute. The tribunal can grant measures to preserve for the purposes of the proceedings any evidence in the custody or control of the parties. The tribunal also has the power to secure the sum in dispute by granting an order taking effect as an injunction, and the power to make an order to prevent assets from being removed from the relevant jurisdiction.

6.1.1 Arbitral proceedings commence when the arbitral tribunal is formed.

6.1.2 It is important to note, however, that in order to stop time running for the statute of limitations, a clear and valid act of one party to constitute the arbitral tribunal should be completed (provided that an arbitration agreement exists). 

6.2.1 The parties are free to choose the procedure to be followed by the arbitrators. 21 Law 27449 art. 65 If the parties do not agree upon the procedure to be applied – and unless the parties have agreed otherwise – the arbitral tribunal can decide to conduct the proceedings as it considers suitable, or may apply the same procedural rules as those used in judicial proceedings. 22 Ibid, art 751.

6.3.1 The parties are also free to choose the seat of the arbitration. In the absence of any choice, in international arbitration, the arbitrators may choose the seat most convenient, considering the circumstances of the dispute or the convenience of the parties. 21 Civil and Commercial Code 1658, CCP, art 741.  

6.3.2 Parties are free to choose the language to be used in their arbitral proceedings.

6.4.1 Multiple parties may participate in arbitral proceedings. Nevertheless, due process should be observed, and each party must participate for the award to be binding. All the parties to the arbitral proceedings should also be party to the arbitration agreement.

6.5.1 The parties are free to decide whether to hold an oral hearing or whether to conduct the arbitration on a documents-only basis. 23 Ibid, art 741(1). Most arbitral institutions in Argentina have adopted the UNCITRAL Arbitration Rules for the conduct of proceedings. 24 For the full text of the UNCITRAL Arbitration Rules (1976) and (2010), see https://uncitral.un.org/en/texts/arbitration/contractualtexts/arbitration.

6.5.2 The arbitral tribunal must allow the parties the opportunity to make oral submissions, if so requested by either party. The tribunal will also hear all witnesses and experts (if they are summoned by the tribunal upon the request of the parties to explain their written testimony).

6.5.3 The parties must be given sufficient prior notice of any hearings or of any procedural actions to be taken by the arbitral tribunal.

6.6.1 The parties have an obligation to provide the arbitrators with all the evidence needed for the arbitral proceedings.

6.6.2 Pursuant to Argentinian jurisprudence, a dynamic burden of proof applies, meaning that the party who is in the best position to provide the evidence has the burden of proof to evidence that fact. 22  See, for example, Argentinian Supreme Court, “Gallis de Mazzucci, Luisa c/ Correa, Miguel y otro”, 6 February 2001, published by La Ley 2001-C, 959.

6.7.1 The arbitral tribunal may take the parties’ depositions, hear witnesses and determine the appointment of expert witnesses, either of its own volition or at the parties’ request.

6.7.2 In certain circumstances, the arbitrators may request the court’s support to appoint expert witnesses to inspect objects, documents or facilities, if the party or a third party involved is reluctant to allow it.

6.8.1 Section 1658 of the National Civil and Commercial Code enables parties to decide on the confidentiality of the proceedings.

6.8.2 The rules of most arbitral institutions in Argentina include express provisions regarding confidentiality.

6.9.1 The arbitrators may request the assistance of the courts in obtaining evidence. For example, they may request the courts to summon witnesses that have refused to voluntarily attend and give evidence. However, the power to determine the admissibility of evidence and the weight to be given to it lies within the exclusive remit of the arbitral tribunal.

7.1.1 In international arbitrations, the parties are free to determine the applicable substantive law according to which the arbitral tribunal must make its award. If the parties fail to determine the applicable law, it shall be determined by the arbitral tribunal. 27

7.1.2 The parties may authorise the arbitral tribunal to make its decision ex aequo et bono (instead of rendering the decision on the basis of an applicable law).

7.2.1 The parties can stipulate in the arbitration agreement the period of time within which the award is to be issued. In the absence of any agreement on this issue, the court shall decide.

7.2.2 Any award based on law (rather than ex aequo et bono) must be properly reasoned both in fact and in law. It must deal with all the issues submitted to arbitration as well as ancillary matters such as the costs of the proceedings.

7.2.3 The award itself must be in writing and state the place and date of its issuance. It must also be signed by all the arbitrators. If the award if signed by the majority of the arbitrators required but a signature is omitted, the award must state the reason for the omitted signature. 23 Law 27.449, s 86 for International Arbitration; s 757 CPCPN in similar terms.  

7.2.4 Where no majority is reached, the parties will have to decide to appoint a new arbitrator and a fixed term for them to render the award for the matters for which there was no majority. If they fail to do so, a judge may appoint the new arbitrator. The new arbitrator will make a determination only upon the basis of the evidence already presented in the proceedings.

7.3.1 The proceedings will terminate if the parties settle their dispute. If requested by the parties, the arbitral tribunal will record the settlement in the form of an award on agreed terms, provided the tribunal considers that the settlement is in accordance with the applicable law.

7.3.2 The arbitrators may schedule one or more settlement hearings at the outset or during the proceedings to encourage the parties to settle their dispute amicably. In keeping with the powers of judges in judicial proceedings in Argentina, the arbitrators may be actively involved (as quasi-conciliators) in any settlement discussions that result from the settlement hearings. These possibilities may vary depending on the procedural rules agreed by the parties.

7.4.1 The parties can decide how the costs of the arbitration will be borne, including the arbitrators’ fees and the parties’ legal fees.

7.4.2 In the absence of agreement, the arbitrators will determine the costs of the arbitration in their award and allocate the responsibility for paying such costs between the parties. As a general rule in domestic arbitration, the winning party is entitled to recover its costs from the losing party, subject to exceptions. 24 CCCP, s 68.  

7.5.1 The arbitral proceedings terminate when the final award is issued. The arbitral proceedings will also be terminated in the following circumstances:

• by agreement between the parties;
• upon the expiration of the term agreed or where otherwise stated by the court; or 
• if neither the parties nor the arbitrators take any steps in the proceedings for a period of three months.

7.6.1 Any party to the arbitral proceedings may file a motion requesting the arbitral tribunal to clarify the terms of the award. This motion should be filed within three days of receipt of the award and should invite the tribunal to correct any typographical error or omission or clarify the grounds on which the award has been made. If the parties have agreed to adopt the rules of an arbitral institution, the time for filing such a motion will be longer (for example, 30 days).

7.6.2 Either party may request an additional award if the arbitral tribunal failed to make an award on any claim submitted to the tribunal for consideration. This motion should also be filed within three days of receipt of the award.

8.1.1 If the parties have entered into a valid and binding arbitration agreement, the courts must decline jurisdiction over the subject matter specified in the arbitration agreement. The courts can, amongst other things, assist in relation to the appointment and challenge of arbitrators, in obtaining evidence as well as in the enforcement of interim measures granted by the arbitral tribunal.

8.2.1 The courts will not have jurisdiction over the dispute unless the arbitral tribunal has not been formed and the arbitration agreement is likely null and void or inapplicable.

8.3.1 An arbitral tribunal has the power to rule on its own jurisdiction. 

8.4.1 The courts in Argentina have jurisdiction to grant interim measures only in support of arbitral proceedings both before and after the arbitral tribunal is formed. The reference by a party to a judicial authority is not considered as a waiver of the arbitration agreement or a breach of such agreement.

8.4.2 The courts also have exclusive competence in enforcing interim measures granted by the arbitral tribunal.

8.4.3 If an arbitral tribunal has been formed, only the tribunal may grant interim measures, but the courts have the power to enforce interim measures granted by the tribunal. 25 the award contains decisions on matters beyond the scope of the arbitration agreement (decisions that exceed the arbitral tribunal’s jurisdiction will be null and void);   

8.5.1 The courts have jurisdiction to assist the arbitral tribunal in obtaining evidence. As an example, courts may compulsorily summon witnesses. The courts may also assist the arbitral tribunal in obtaining information from third parties, including public authorities.

9.1.1 The rules of most arbitral institutions specify awards as final, binding and not subject to appeal. This has been accepted by jurisprudence. 26 Capozzolo, Enrique Santiago c Inversora Lolog SA s/recurso de queja. National Commercial Court Panel D 3/5/18.  

9.1.2 In ad hoc arbitration, awards can be appealed on the same grounds as court judgments unless the parties agree otherwise or have waived such a right.

9.1.3 In ex aequo et bono arbitration, the award cannot be challenged. 27 Canteros María Alejandra y otros c Canteros, José David s/ordinario. National Commercial Appeals Court Panel F 5/4/2018.  

9.2.1 The parties are not entitled to waive the right to apply to set aside an award. The grounds upon which an award can be set aside are as follows:

• a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
• the award was granted after the deadline fixed;
• the award contains decisions on matters beyond the scope of the arbitration agreement (decisions that exceed the arbitral tribunal’s jurisdiction will be null and void);
• the party which concluded the arbitration agreement did not have legal capacity;
• the arbitration agreement is not valid under the law which the parties have chosen, under Argentinian law;
• the subject matter of the dispute is not capable of determination by arbitration under Argentinian law; or
• the award is in conflict with Argentinean law. 42

9.2.2 The application to set aside the award must be submitted within five days of receipt of the award by the parties. 43

9.2.3 In arbitrations decided on the basis of substantive law, any application to set aside an award should be submitted to the arbitral tribunal. If the tribunal decides to grant the application, it will remit the file to the Ordinary Appeal Court, which will rule on the application. If the arbitral tribunal rejects the application, the party challenging the award may file an application to set aside the award before the Ordinary Appeal Court.

9.2.4 In cases decided ex aequo et bono, an application to set aside the award should be filed at the competent first instance court. The only valid grounds for such a challenge are:

• the award was made after the deadline fixed in the arbitration agreement; or
• the award contains decisions on matters beyond the scope of the arbitration agreement.

9.2.5 No appeal may be lodged against the decision of the court on an application to set aside an award. However, a party may apply to the Supreme Court of the Republic of Argentina for judicial revision of the decision if the court committed a substantial breach of law.

9.2.6 It is important to note that the filing of an application to set aside the award will not have the effect of suspending enforcement of the award in ex aequo et bono proceedings. Enforcement may, however, be suspended if an appeal is filed in the context of an arbitration at law, only if such appeal is granted and the decision which grants the appeal suspends enforcement of the award.

10.1.1 The effect of an award is the same as that of a final and binding (non-appealable) court judgment. The court with jurisdiction to enforce a domestic award is the local court agreed by the parties. In the absence of agreement between the parties on this issue, the competent court will be the one which would have been competent to hear the dispute if no arbitration agreement had been concluded.

10.1.2 After the Civil and Commercial Code was enacted, the court has rejected many applications to challenge awards based upon it. 28 Harz Und Derivate y otra c/ Akzo Nobel Coatings S.A. y otras s/ organismos externos Panel D of National Commercial Court of Appeals 2 October 2018.  

10.2.1 Foreign awards are enforceable in Argentina in accordance with the provisions of multilateral conventions and bilateral treaties ratified by Argentina. The most important arbitration convention to which Argentina is a party is the New York Convention.

10.2.2 The party seeking enforcement of a foreign award will need to obtain an order of exequatur from the local courts in order to enforce the award. The court will only refuse to grant such an order if:

• the subject matter of the dispute is not arbitrable under Argentinian law; or
• the award is contrary to Argentinian law.

10.2.3 Where the Argentinian state is party to the arbitration proceedings, enforcement depends on the type of the award. For example, ICSID awards are enforceable as domestic awards.

10.2.4 There is no express provision governing which court can hear applications for the recognition and enforcement of foreign awards. However, in principle, such an application should be lodged with the court that would have been able to hear the dispute in the absence of an arbitration agreement.

11.1.1 Arbitration is encouraged for the resolution of domestic consumer disputes under Argentinian consumer law. 29 Ley Nº 24.240, s 59.  There are specialist arbitration courts to resolve consumer disputes arising from product liability claims.

11.2.1 Mediation with a conciliator is mandatory for any labour dispute. The conciliator may propose that the parties resolve their dispute by means of arbitration and request they execute an arbitration agreement. The arbitral proceedings should be governed by the rules in Chapter VI of the CCCP. 

11.2.2 Awards in labour disputes may be appealed to the National Labour Appeals Court.