FTAA - NEGOTIATING GROUP ON DISPUTE SETTLEMENT
1. International Agreements
a. Is the jurisdiction a party to the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, done at New York on
10 June 1958 (New York Convention). If so, are there any reservations? Name
the domestic law that implements these commitments.
Yes. Venezuela acceded to the Convention in 1994 and it took
effect in 1995. See Special Official Gazette No. 4.832.
Venezuela made the following Declaration (understood as effective upon
ratification of, accession or succession to the text) to the New York
a. The Republic of Venezuela will apply the Convention
only to recognition and enforcement of awards made in the territory of
another Contracting State.
b. The Republic of Venezuela will apply the Convention
only to disputes arising out of legal relationships, whether contractual
or not, which are considered as commercial under Venezuelan law.
b. Is the jurisdiction a party to the Convention on the
Settlement of Investment Disputes Between States and Nationals of Other
States, done at Washington on 18 March 1965 (ICSID Convention)? Is there a
domestic implementing law? Is the jurisdiction a party to any bilateral
investment treaties providing for settlement of investment disputes between
a state and a national of another state?
Yes, the Law Approving the Convention was published in
Official Gazette No. 35.655 of 3 April 1995.
Venezuela has signed the following Bilateral Investment Treaties that
envisage mechanisms for the settlement of Investor-State disputes, with
reference to the ICSID: Netherlands (1994), Argentina (1993), Switzerland
(1993), Ecuador (1993), Chile (1993), Barbados (1994), Portugal (1994),
Czech Republic (1995), United Kingdom of Great Britain and Northern Ireland
(1995), Denmark (1994), Lithuania (1995), Peru (1996), Spain (1995),
Paraguay (1996), Sweden (1996), Canada (1996), Germany (1996), Costa Rica
(1997), Brazil (1995), Uruguay (1997), Belgium (1998), Italy (2001), and
c. Is the jurisdiction a party to the Inter-American
Convention on International Commercial Arbitration, signed in Panama on 30
January 1975 (Panama Convention)? Is there a domestic implementing law?
Yes, the Law Approving the Convention was published in
Official Gazette No. 33.170 of 27 February 1985 and ratified on 16 May 1985.
d. Is the jurisdiction a party to any other international
agreement related to international commercial arbitration?
Yes, Venezuela is party to the Inter-American Convention on
Extraterritorial Validity of Foreign Judgments and Arbitral Awards, signed
in Montevideo on 8 May 1979, approved by a Law published in Official Gazette
No. 33.144 of 15 January 1985 and ratified on 28 February 1985.
a. What is the source of law for international commercial
arbitration within your jurisdiction? Please cite.
The Private International Law Act establishes the order of
priority of sources as follows: the pertinent rules of international public
law, in particular those prescribed in the international treaties in force
in Venezuela, or in the absence thereof, the domestic rules governing
private international law; in the absence of the latter, the former are
applied by analogy, and lastly, the generally accepted principles of private
Article 1 of the International Commercial Arbitration Act,
published in Official Gazette No. 36.430 of 7 April 1998, lays down a
formula: "Article 1. This Law shall apply to commercial arbitration, without
prejudice to any multilateral or bilateral treaty in force”.
b. Does the law contain different rules for domestic and
No, the current legislation allows for broad interpretation
of its rules.
c. Are there limitations on the types of disputes that may
Yes, the restrictions relate to the subject matters set out
in Article 3 of the International Commercial Arbitration Act: “The disputes
excluded shall be those:
a) That are contrary to public order or which concern
offenses and misdemeanors, except regarding the amount of civil liability,
if said amount has not been set by a final judgment;
b) Directly relating to the powers and functions of the
State or of persons or entities under public law;
c) Pertaining to the civil status or capacity of persons
to exercise their civil rights;
d) Regarding the property or rights of persons lacking
legal capacity, without prior judicial authorization; and
e) Subject to a final judgment, except for the economic
implications of its execution if they concern exclusively the parties to
the trial and have not been determined by a final judgment.”
d. Does the law specify rules for arbitration or do the
parties have autonomy to set their rules?
No, domestic law does not specify rules for arbitration;
instead it enshrines the principle of the will of the parties (Article 15,
Commercial Arbitration Act): “When the parties do not determine their own
rules of procedure for an independent arbitration, the rules set forth
herein shall apply. Likewise, these rules may be applied to an institutional
arbitration, if the parties so determine.”
e. What is the role of the courts during an arbitration? May
courts intervene prior to or during the arbitration process?
The International Commercial Arbitration Act prescribes the
protocol for cooperation between judicial officials and arbitrators, by
means of which the Courts of the Republic participate in the various stages
1. Independent arbitration:
Article 17. Las parties shall jointly
appoint the arbitrators or delegate their appointment to a third party.
The second paragraph reads: Should any of the parties decline to appoint
its arbitrator, or if the two arbitrators fail to agree on the naming of a
third, either of them may have recourse to the competent Court Judge of
First Instance to appoint the other arbitrator. Third paragraph: If there
is no agreement between the parties in the case of a procedure with a
single arbitrator, the appointment shall be made by the competent Court
Judge of First Instance, at the request of one of the parties.
Article 28. The arbitral tribunal, or any
of the parties with the approval of the arbitral tribunal, may request the
assistance of the competent Court of First Instance in furnishing the
necessary evidence and for enforcing the interim relief requested. The
Court shall attend to said request within the scope of its competence and
in accordance with the applicable rules.
2. Disqualification or challenge of arbitrators:
Article 37. Should the arbitrator reject
the challenge or fail to make a statement on the matter, the other
arbitrators shall accept or reject it in a written, reasoned statement,
and the parties shall be notified at a hearing that must be held for that
purpose within the five (5) working days following rejection of the
challenge. A decision on the merits shall be taken at that hearing.
Once the grounds for the disqualification challenge of an
arbitrator have been accepted, the remaining arbitrators shall declare the
person as no longer forming part of the arbitration procedure and shall
accordingly notify the party that made the appointment so that said party
may find a substitute. Should no appointment be made within the five (5)
working day following notification of acceptance of the grounds, the
competent Court of First Instance shall appoint the substitute at the
request of the remaining arbitrators. The Court’s decision shall not be
Article 38. In the event of a tie over the decision on the
disqualification or challenge of one of the arbitrators, or in the case of
a sole arbitrator, the record of the proceedings shall be referred for
decision to the competent Court in the judicial district of the place
where the arbitral tribunal operates. The Court’s decision shall not be
3. Voidability of the award
Article 43. The only action that may be
brought against the arbitral award shall be an appeal for annulment. The
appeal must be filed in writing with the competent Higher Court in the
place where the award has been rendered, within the five (5) working days
following notification of the award or of the judicial decision
correcting, clarifying or supplementing it. The record of the arbitral
tribunal’s proceedings must accompany the motion.
The filing of an appeal for annulment shall not suspend
enforcement of the arbitral award unless, at the request of the appellant,
the Higher Court so orders after the deposit of a security by the
appellant guaranteeing enforcement of the award and any damages in the
event that the appeal is rejected.
Article 45. The Higher Court shall not
admit the appeal for annulment if it is untimely or when the grounds do
not correspond to those indicated in this Law.
The writ by which the Higher Court admits the appeal for
annulment shall set the amount of the security that the appellant must
furnish to guarantee the outcome of the proceeding. The deadline for the
deposit of the security shall be ten (10) working days as of the date of
issue of said writ.
If a security is not deposited or the appeal is not
sustained, the Court shall dismiss it.
Article 47. If the appeal is
admitted and the security deposited, the Higher Court shall examine the
matter in accordance with the provisions of the Code of Civil Procedure
for ordinary proceedings.
4. Recognition and enforcement of the award
Article 48. Regardless of the country in
which the arbitral award has been rendered, it shall be recognized by the
ordinary courts as binding and unappealable and, upon submission of a
request in writing to the competent Court of First Instance, shall be
enforced by the latter without need of exequatur proceedings, pursuant to
the rules set forth in the Code of Civil Procedure for the compulsory
enforcement of judgments.
f. Can the courts grant interim relief pending the outcome
of an arbitration?
Yes, Article 28 of the Commercial Arbitration Act provides
that: “The arbitral tribunal, or any of the parties with the approval of the
arbitral tribunal, may request the assistance of the competent Court of
First Instance in furnishing the necessary evidence and for enforcing the
interim relief requested. The Court shall attend to said request to the
extent of its competence and in accordance with the applicable rules.”
g. Does the law require citizenship or a particular bar
membership for participation in an arbitral proceeding, as arbiter or
representative of a party?
No, it merely indicates the limits set out in Article 619 of
the Code of Civil Procedure of Venezuela.
h. Does the law require that the proceedings be conducted in
a particular language?
No, Article 10 of the Commercial Arbitration Act provides
that: “The parties are free to agree on the language or languages to be used
in arbitration proceedings. Failing agreement, the arbitral tribunal shall
determine the language or languages to be used. Except where another form
has been agreed upon, this agreement shall be applicable to all written
documents from the parties, all hearings and to the award, decision or any
other communication issued by the arbitral tribunal.”
i. Does the law have mandatory choice of law provisions?
No, as stated above, the Commercial Arbitration Act upholds
the will of the parties.
j. Does the arbitration law prescribe rules for decision
making by the arbiters and the form of an award?
Article 8 of the Venezuelan law on commercial arbitration
distinguishes between de jure arbitrators and ex aequo et bono
arbitrators. The first must make their decisions in accordance with the
rules of law, while the second are free to decide on the basis of equity.
The latter poses no problem, but in the case of de jure arbitrators,
given the law’s silence as to the law applicable in deciding on the merits
of a dispute, the absence of choice of applicable law by the parties, there
is no rule that guides them on which of the bodies of laws that are all
applicable to the legal relationship submitted to arbitration, should apply
to the specific case at hand.
Some Venezuelan scholars agree that in the case of
international commercial arbitration, the answer is to be found in Article 8
of the Arbitration Act, which provides that “…arbitrators shall always be
guided by the stipulations of the contract and commercial usage and custom.”
This rule would allow for the application of Lex Mercatoria as a source in
k. Is the confidentiality of arbitral proceedings and awards
protected by law?
l. On what grounds will the courts set aside or decline to
enforce an award?
The following specific grounds are set out in Article 49 of
the Commercial Arbitration Act: “Recognition or enforcement of an arbitral
award, regardless of the country that has rendered it, may be refused only:
a) When the party against whom it is invoked demonstrates
that one of the parties was impaired by an incapacity when the arbitration
agreement was entered into;
b) When the party against whom the award is invoked was not
given proper notice of the appointment of an arbitrator or of arbitration
proceedings of which notice must be given, or was otherwise unable to
exercise his rights.
c) When the composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the law of the country where
the arbitration took place;
d) When the award deals with a dispute not contemplated in
the arbitration agreement, or contains decisions that go beyond the scope of
e) When the party against whom the award is invoked
demonstrates that it is not yet binding on the parties or has previously
been set aside or suspended by an authority that is competent pursuant to
what was agreed by the parties for the arbitration procedure;
f) When the court that should recognize or enforce the award
finds that under the law, the matter in dispute is not arbitrable or that
the subject matter concerned is contrary to public policy.
g) If the arbitration agreement is not valid under the law
chosen by the parties.
m. What is the procedure for the enforcement of an award?
The award enforcement procedure is described in Article 48
of the Commercial Arbitration Act: “Regardless of the country in which the
arbitral award has been rendered, it shall be recognized by the ordinary
courts as binding and unappealable and, upon submission of a request in
writing to the competent Court of First Instance, shall be enforced by the
latter without need of exequatur proceedings, pursuant to the rules set
forth in the Code of Civil Procedure for the enforcement of judgments.”
The party relying on an award or requesting its enforcement
must submit, together with its request, a copy of the award, certified by
the arbitral tribunal, along with a translation into Spanish, if necessary.
The rules established in the Code of Civil Procedure are set
forth in Chapter II, Title IV.
n. Please list any institutions available within your
jurisdiction that provide international commercial arbitration services.
Provide Internet address where available.
Caracas Chamber of Commerce -
3. Alternative forms of Dispute Resolution (ADR)
a. Are other forms of alternative dispute resolution
(mediation, conciliation) available for the resolution of commercial
disputes within your jurisdiction?
Yes, they are available and are considered as voluntary
b. Does the law or do the courts mandate or encourage the
use of ADR in commercial disputes? Are there any legal impediments to using
ADR for the resolution of commercial disputes?
The Constitution of the Bolivarian Republic of Venezuela,
promulgated in 1999, encourages the use of ADR in the following terms:
“Article 258. The Law shall organize the system of small
claims courts (run by justices of the peace) in the communities. The
justices of the peace shall be elected by direct, secret and universal
ballot, pursuant to the law. The law shall encourage arbitration,
conciliation, mediation and any other alternative means of dispute
The legal constraints are prescribed in Article 3, second
paragraph, subparagraph c), of the Commercial Arbitration Act, and are
applied by analogy to ADR.
c. Can courts enforce agreements to mediate or use other
forms of non-binding dispute resolution in commercial disputes?
Yes. These agreements shall be enforceable as a contractual
obligation, if this is envisaged in a contract of a commercial nature
between private parties.
d. Are there any organizations that specialize in ADR for
commercial disputes not already mentioned?
As it does for the arbitration mechanism, the Arbitration
Center, Caracas Chamber of Commerce administers mediation procedures.
e. What rules govern confidentiality and admissibility of
evidence in other proceedings?
Mediation is based on the principle of confidentiality. The
institutional arbitration mechanism administered by the Caracas Chamber of
Commerce treats information as confidential in the absence of express
authorization to the contrary by the parties.
4. Legal Sources and References
In addition to the references above, is there an
authoritative Internet site containing up-to-date information on dispute
resolution facilities available in this jurisdiction?
Supreme Court of Justice.
5. - Bibliography
Please list respected reference works relating to
arbitration and ADR in your jurisdiction.
- El Arbitraje en la Práctica I. Autores:
Diana C. Droulers, Luis Alfredo Araque, Irene Cirino, Germán Acedo Payarez,
Irma Lovera de Sola, Bernardo Weininger, Carlos Valedón, José Luis
- El Arbitraje en la Práctica II. Autores: Diana C. Droulers,
Ricardo Henriquez La Roche, Alberto Blanco Uribe, Ivor Mogollón, Jairo Ching,
José Tomas Blanco, José Pedro Barnola
- Seminario Sobre la Ley de Arbitraje Comercial. Autores:
Aristides Rengel Romberg, Alberto Baumeister, José Vicente Haro, Allan
Brewer Carias, Andrés Mezgravis, Tatiana Maekelt, James Otis Rodner, Diana
- Los Comerciantes de Caracas. María Elena González Deluca
- El Crédito Documentario. Dr. James-Otis Rodner. Segunda
Edición - Ley de Arbitraje Comercial. Dr. Carlos J. Sarmiento Sosa
- El Arbitraje Comercial en Venezuela. Dr. Ricardo Henríquez