The new law, enacted on 19 December, also repeals the earlier section of the Civil Procedural Code that covered arbitration.
According to Marcos Peña Rodríguez, a dispute resolution partner at Jiménez Cruz Peña in Santo Domingo, the old law was "outdated, inadequate and failed to distinguish an arbitral procedure from litigation before a court".
The new law, which is expected to enter into force by the end of this week, was drafted by Congress with the support of a team of arbitration lawyers at the Santo Domingo Chamber of Commerce. French arbitrator Yves Derains assisted their efforts to get the bill approved by the Dominican parliament by submitting an opinion on its benefits. The process took three years.
The law will apply to all contracts signed after its official publication.
Peña says that a particular benefit of the legislation is the removal of doubt over the procedure for enforcing an arbitral award in the Dominican Republic. The Civil Procedural Code was silent on this matter, leading some Dominican courts to insist on reviewing arbitral awards.
"This shortcoming of the previous legislation had negative consequences and prevented international conventions from being enforced," says Peña.
Now, foreign arbitral awards will be recognised and enforced by the Court of First Instance of the National District following a non-adversarial procedure.
While the new law sticks closely to the Model Law in many respects, drafters took advantage of the flexibility of the law to adapt it to the Dominican Republic's existing legal framework.
The adapted provisions mean:
- arbitral agreements must satisfy some Dominican rules on the validity of arbitral agreements as well as standard Model Law ones;
- parties can determine the number of arbitrators hearing a dispute, provided that it is an odd number;
- arbitrators, parties and arbitral institutions must keep proceedings confidential; and
- parties must follow rules of evidence laid down in domestic law.
Approximately 30 per cent of cases handled by the Council for Conciliation and Arbitration of the Chamber of Commerce of Production of Santo Domingo - six to seven cases a year - feature a foreign party or its subsidiary.
