Judicial support in the arbitral process. Overview and specificities in the Dominican Republic

Abstract: The aim of the 1985 UNCITRAL Model Law, as evidenced by recent modifications to arbitration laws in Ibero-America, is to limit judicial intervention in international commercial arbitration. This trend appears to be justified by the fact that parties in an arbitration agreement deliberately choose to exclude judicial jurisdiction, with the intention of streamlining their processes and avoiding lengthy court battles.

In this paper, we will review aspects related to arbitration, a mechanism where the autonomy of the parties’ will prevails and where individuals are empowered to temporarily administer justice, with the prior consent of the parties.

We will focus on that inevitable dance, that coexistence with judicial courts, as, although the arbitral tribunal is vested with powers and authorities similar to those of an ordinary court, it is undeniable that it lacks the coercive powers that legislators have granted to judicial courts, especially when the decisions made affect the interests of third parties.

Keywords: Judicial Support | Provisional Measures | Recognition of Arbitral Award

I. Introduction

Judicial and arbitral justice share similarities, as both serve the social function of dispensing justice and maintaining social peace, but they differ in that judicial justice depends on the State, while arbitral justice relies on private parties.

Among similarities and differences, the role of administering justice leads both institutions to understand each other, with the state recognizing the power and validity of private justice and, in that acceptance, supporting the processes and procedures of the latter to fulfill the goal of social peace.

We will now analyze the various stages where the Judiciary intervenes in the context of an arbitral process: the approach recommended by the UNCITRAL Model Law and the regulations governing arbitration in the Dominican Republic, including the approach taken by local jurisprudence on these matters.

II. Coexistence of social and arbitral justice

Most legislations recognize the validity and legality of private justice, leaving the scope of its powers and limits more open to discussion or definition. It is at these limits that the role of the courts comes into play, with their supportive function. Although this support function should be understood as natural and specific to the required assistance, it sometimes encounters the limitation of the lack of recognition of arbitral jurisdiction, leading to unnecessary delays and blockages in the procedure. Therefore, current arbitration laws have incorporated clear provisions regarding the role of the courts in providing assistance.

Article 6 of the UNCITRAL Model Law states that each State may specify which court would be competent to carry out judicial cooperation in an arbitral process.

In the Dominican Republic, Law 489-08 on International Commercial Arbitration establishes the specific activities in which the court can intervene to support an arbitral process, as the recognition and validity of arbitration institutions is not in dispute. This has been clearly confirmed by the Dominican Constitutional Court in a couple of decisions on the matter.

In ruling TC/0026/12, the Constitutional Court highlighted the importance of arbitration as an alternative dispute resolution mechanism and its contribution to easing the judicial system’s congestion. The Court reaffirmed the validity of arbitral awards and their enforcement in the country, emphasizing that the courts should act in support of arbitration and not as a substitute for it.

In a second decision, the validity and applicability of arbitration agreements in the Dominican Republic were reaffirmed, emphasizing the autonomy of the arbitral clause and the principle of favor arbitrandum. The Constitutional Court underscored that arbitration agreements must be respected and that courts should refrain from intervening in disputes that the parties have agreed to submit to arbitration, except in exceptional cases.

These rulings reflect the Dominican Republic’s commitment to arbitration as an efficient and effective dispute resolution method, aligned with international standards and national legislation.

III. Stages of court assistance in an arbitral process

Undoubtedly, the parties that have agreed to an arbitration clause may require judicial assistance, either for support or to oversee the arbitration. This assistance occurs at different stages of the process, whether in the pre-arbitral stage, during the arbitration, or in the post-award phase.

A. Pre-arbitral stage

The pre-arbitral stage refers to the period when the parties are organizing the arbitral tribunal. The activities in this phase will vary depending on whether the arbitration is institutional or ad hoc.

For most legislations, the typical activities of the pre-arbitral stage are as follows:

• Request for arbitration or convening of the tribunal
• Appointment of the arbitrators
• Installation of the tribunal
• Admission of the claim
• Conciliation hearing

Roman Solís Zelaya argues that a moment of judicial intervention, if not the first, is when the state judge examines the arbitral clause or agreement and refers the parties to arbitration. A typical case where the application of the Kompetenz-Kompetenz principle becomes relevant, requiring the judge to refer the parties to arbitration when they have agreed to it.

Beyond this initial scenario, judicial intervention in the pre-arbitral phase typically occurs to support the appointment, challenge, or replacement of arbitrators. This intervention is very limited, as there is a general consensus that judicial intervention should be minimal and aimed at supporting the arbitration process. Judicial support occurs when the parties have not agreed on the mechanism for appointing arbitrators or, if they have, when they fail to reach a consensus. In institutional arbitration, this procedure is typically unnecessary as arbitration institutions’ rules are designed to address such situations in the most favorable way for the parties. However, in cases where consensus is not reached, judicial assistance may still be available.

1. Appointment of the arbitrator

Here, we highlight some procedural features and activities to consider when judicial assistance is required for the appointment and replacement of arbitrators. The first point to note is that the proceedings must be oral and adversarial, in accordance with the Model Law and various legislations based on it. The request for the appointment of an arbitrator must state the lack of agreement between the parties, and it is necessary to provide proof of the existence of the arbitration agreement.

Courts have guidelines for the appointment of arbitrators, for example, depending on the number of arbitrators. First, if there is a single arbitrator, this person will be appointed by the court at the request of either party. In the case of a three-arbitrator arbitration, each party will appoint one arbitrator, and these two will select the third, who will act as the president of the arbitral tribunal. In this case, the court intervenes at the request of either party if they fail to make the appointment, or if the arbitrators appointed by the parties cannot agree on the selection of the third arbitrator within the established timeframe since the last acceptance.

The decision to appoint an arbitrator is generally not subject to appeal. In the Dominican Republic, however, an appeal is allowed only if the decision rejects the request due to the failure to prove the existence of the arbitration agreement. As the appointment is usually not appealable, the judge or judges must take any necessary measures to preserve the objectivity and impartiality of the arbitrators, whether the appointed arbitrator is of a nationality different from that of the parties or the other appointed arbitrators, in the case of international arbitration, and in the case of domestic arbitrations, to ensure that the arbitration meets the appropriate characteristics and is free of conflicts of interest. Similarly, it is crucial to reinforce the obligation of the arbitrator to disclose any circumstances that might call into question their impartiality. This is why it is recommended that the arbitrator remain independent before their appointment, meaning they should not actively promote their appointment, and from that moment, they must inform the parties of any new developments.

Likewise, to reinforce the impartiality of the arbitrators, it is recommended to consider various guidelines from recognized associations, such as the International Bar Association (IBA), as well as recommendations from the Spanish Arbitration Club, or the rules of the arbitration center or model regulations that govern the arbitration in question. In this context, it is advisable for the appointment to come from the list of arbitrators maintained by the arbitration center, the corresponding Bar Association, or professional associations, when specific professional expertise is required.

Once the arbitrator has been appointed by the judge, it is recommended—and the main regulations foresee this—that the appointed arbitrator proceed with the arbitration within the established deadlines. Failure to do so could compromise their liability, whether criminal, civil, or disciplinary.

2. Replacement of the arbitrator

It may occur that, once the arbitral tribunal has been formed, it becomes necessary to replace or remove an arbitrator due to unforeseen circumstances, such as resignation, death, incapacity, or disqualification. In such cases, the same procedure established for the appointment must be followed, meaning an oral and contentious trial should be held, with the exception that these decisions are also not subject to appeal. This makes sense as the goal is not to prolong the process outside the arbitral forum, and judicial assistance should be punctual and not lead to unnecessary delays.

For the appointment of a replacement arbitrator, the parties’ agreed-upon rules should be applied in principle. If they have not made an agreement, the rules of the center where the arbitration is held will apply. If that fails, judicial appointment will proceed. For both the appointment and replacement of an arbitrator, the judge involved must be fully aware that their involvement is limited, and their analysis is restricted to verifying the lack of agreement between the parties. The judge is not allowed to analyze the substance of the dispute, but they can assess the validity of the arbitration clause, as their supportive role always aims to ensure the legality of the arbitration and reduce the likelihood that the award will be annulled later.

Continuing with the procedural details, we highlight that the request for the appointment or replacement of an arbitrator is known in a single instance and is treated as a preparatory judgment. In most Ibero-American commercial arbitration laws, the jurisdiction to handle such requests is the First Instance Court in the location where the arbitration takes place, as established by our Law No. 489-08 on Commercial Arbitration. If the venue for the arbitration is not yet determined, the request is made before the court of the location of any of the defendants; if neither has a domicile in the Dominican Republic, it will be the court of the plaintiff’s domicile, and if the plaintiff also lacks a domicile in the Dominican Republic, the court of their choice.

It is important to note that this possibility to assess the validity of the clause does not extend to assisting in matters of evidence, as we will discuss further.

 

B. Arbitral instruction phase

1. Production of evidence

Regarding judicial assistance in matters of evidence, we want to emphasize that this is necessary due to the lack of power that arbitrators have to compel third parties and parties to present evidence. Its need arises from the absence of coercive power in their decisions, as noted in our introduction. In the words of Roque J. Caviano, the judicial cooperation function is justified by the lack of imperium of the arbitrators. Therefore, the evidence must initially be produced before the arbitral forum; however, if necessary, judicial assistance can be requested.

The parties can make these requests after submitting them to the arbitral tribunal, which handles the request. Unlike the judicial assistance in appointing arbitrators, for assistance in matters of evidence, judges do not need to examine the validity of the arbitration clause; it is sufficient for them to determine whether the requested evidence is contrary to the law. Some authors argue that the decision of one or more arbitrators denying the possibility of processing a piece of evidence should be contained in an award, subject to annulment actions if deemed a violation of the right to defense.

As with appointments, the jurisdiction lies with the First Instance Court of the arbitration location or the location where the assistance is needed. Judicial assistance in evidence can take two forms: (i) the practice of evidence that the arbitrator could not implement, or (ii) the adoption of necessary measures to allow the arbitrator to practice the evidence directly. Common cases include the forced production of documents by the parties or a third party, or the hearing of a witness or expert who refuses to appear before the arbitral tribunal, as long as the ordinary procedural rules allow for compelling such a witness in these circumstances.

In general, the principle is that the arbitrator can practice all the evidentiary measures requested, and if the parties refuse or fail to support the processing, the rules of the burden of proof can always be applied. This is understandable because the parties who agree to arbitration do so with the initial aim of avoiding courts and cooperating to ensure that all elements are gathered for the award to be rendered without unnecessary delays.

1. Provisional and protective measures

In the Dominican Republic, courts play a crucial support role in arbitration processes. In this context, courts can grant provisional and protective measures in support of arbitration proceedings. This includes protecting assets, preserving evidence, and other measures to ensure the effectiveness of the arbitral process.

Although Law 489-08 on Commercial Arbitration includes a general prohibition, it leaves room for special needs by stating in Article 8 that no judicial tribunal will intervene in matters governed by this law, except as expressly provided by the law. Thus, the legal authorization for taking protective and provisional measures is clearly provided in Article 9, which refers in general to judicial assistance, and specifically, paragraph 3 of this article states that the court competent to adopt protective measures is the one in the location where the award is to be executed, and in the absence of such location, the one where the measures must take effect, or where the assets to which the measures apply are located.

Dominican jurisprudence has addressed the issue of protective measures in support of arbitration proceedings. The court held that Dominican courts can grant protective measures to ensure the effectiveness of the arbitration, provided certain requirements are met and the principle of minimal judicial intervention in arbitration is respected.

Regarding the protective measures that could be ordered, the Model Law of UNCITRAL allows for measures that:

a. maintain or restore the status quo pending the resolution of the dispute;
b. adopt measures to prevent imminent or current harm or impairment of the arbitral process, or abstain from certain actions that could cause such harm or impairment;
c. provide a means to preserve assets that allow for the enforcement of any subsequent award; or
d. preserve evidence that could be relevant and material to resolving the dispute.

1. Post-Award stage

Dominican courts can be requested to recognize and enforce both domestic and international arbitral awards. The Dominican Republic is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which facilitates the enforcement of such awards in the country.

Likewise, in the Dominican Republic, the First Instance Court of the location where the award is deemed rendered is competent for the forced execution of the award. In the case of an award to be enforced abroad, procedural rules and international treaties will determine the jurisdiction.

1. Available ways to challenge an award

In general terms, Roque J. Caviano points out that the judicial avenues for post-award control are essentially three: The first option available is the appeal, which grants judges broad reviewing authority, including the substance or merits of the award. The second, usually unavailable, is the challenge for annulment, which allows judges to review only the validity of the award, checking whether any of the situations specifically listed by law as grounds for annulment apply. In this case, judicial control cannot extend to the substance or merits of the award, and its jurisdiction is limited to deciding on the validity or annulment of the award. The third, inevitable, is the exequatur procedure, through which national judges review certain aspects of foreign awards whose enforcement is sought in the country.

According to Dominican law, the only action available against an award is the challenge for annulment, which is within the jurisdiction of the Court of Appeals corresponding to the Department where the award was rendered.

It is common for discussions to arise regarding the possibility of waiving any appeal that can be made against an award, including actions for annulment. However, the Dominican courts have rejected this possibility. This position was established in a decision by the Court of Appeals, which affirmed the following: “Considering that it is obvious that the annulment action, as a natural result of arbitration and the only control mechanism available in this case, involving domestic arbitration administered by a Chamber of Commerce and Production, neither constitutes an appeal nor any ‘avenue’ that can be waived as a violation of the constitutional principle of effective protection; what is provided in the aforementioned regulatory provision is a possible waiver of ‘appeal avenues’ per se, not the constitutional right to access justice for the purpose of requesting not a review of the merits of a dispute already resolved, nor to extend the arbitral dispute to another stage, but to weigh some or all of the annulment grounds specifically listed in Article 39.2 of the LAC.”

In line with these interests, the party seeking the annulment of an award also seeks to have the effects of the award suspended in the interim. To achieve this, in the Dominican case, a request must be made to the president of the Court of Appeals for the suspension. The mere request has suspensive effects from the notification of the suspension claim until the first hearing. It is up to the judge to decide whether the effects of the award will remain suspended until a ruling is made on the main issue, or whether the enforcement of the arbitral decision will continue. Based on our experience, judges tend to be conservative and maintain the provisional suspension until a decision on the substance is made. It is worth noting that rulings on the annulment of awards can be appealed to the Supreme Court, however, orders made by the president of the Court regarding the suspension cannot be appealed.

In summary, Dominican courts have the authority to annul arbitral awards in specific cases, such as when the award was obtained through fraud, corruption, or when the arbitral tribunal exceeded its jurisdiction.

2. Granting exequatur of the award

The parties may not take any recourse or challenge against the award, and instead, the beneficiary may seek to enforce the award in the place where it justifies their interest. For these purposes, the procedure for homologation or obtaining exequatur of the award is available, through which the applicant seeks for a court to exercise a legality check, reviewing whether during the arbitration process and the issuance of the award, the rules of public order and due process required by regulations for its validity were followed.

This review does not involve an additional instance for discussing the merits of the parties’ claims. The indications of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards are quite specific about the confirmations the judge or court must make when asked to homologate or grant exequatur of an award. According to Magistrate Édynson Alarcón, with the declarative act of recognition, the “nationalization” of the foreign award is achieved. It is, therefore, an act of assimilation that gives the award the effect of a final judgment. Enforcement, as a subsequent and culminating phase, turns the award into an executable title, which virtually allows for its forced compliance. Once granted, through the recognition act, the foreign award is granted the “citizenship” status, and with its execution, the use of public force is available for its full enforcement. In the Dominican Republic, the competent court for this task is the Civil and Commercial Chamber of the First Instance Court of the National District. It is heard in summary jurisdiction in the first instance, and the decision rendered may be appealed; however, it has been judged that in the arbitral sphere, parties can waive any appeal, as long as public order is not violated.

This case law specifically notes that the parties “agreed to waive the right to appeal in any court regarding any legal issues arising during the arbitration process or concerning the arbitral award,” from which it was concluded that the granted exequatur is not subject to appeal by agreement of the parties; the parties have the right to waive their right to appeal in advance, as they effectively did.

1. Conclusions

It must be stated that the interaction between the Judiciary and arbitration, although raising questions, is necessary. Their interaction pursues a common goal: the administration of justice, and thus, the achievement of social peace. The aim is to minimize discussions about the scope and limits of judicial tribunals. For this, stronger and clearer arbitration agreements are needed. Similarly, it is essential to ensure that the autonomy, touted as the attraction of arbitration jurisdiction, does not become a limitation to retain actions that, due to their lack of coercive effect, would not produce the desired outcome for the parties in dispute. In other words, each institution should understand its limits and needs.

While it is understood that a prior waiver of judicial intervention is beneficial, it should not be absolute, as we have seen, because the judicial court can achieve enforceability objectives that could ultimately lead to obtaining the desired result for the parties and third parties. The interaction between judges and arbitrators must flow and avoid antagonisms, especially in current times, where we are questioning whether arbitration can take place in the metaverse. Significant efforts have been made, and in the Dominican Republic, we are seeing the consolidation of a true arbitration culture that brings about a better interaction with the Judiciary, which, through decisions rendered by the higher courts, has recognized the validity of the arbitral institution and has indicated the opportunities that litigants have in arbitration to turn to ordinary jurisdiction for support, supplementing the powers entrusted to the arbitrator.

Regardless of the stage of the arbitration process, whether pre-arbitral, during the instruction, or post-award, it is important for the court to understand and recognize the characteristics of arbitration, so that its analysis and solution align with these characteristics, and not turn judicial intervention into a headache or obstacle for the parties in an arbitration.