Litigation is more prevalent than arbitration and domestic arbitration is more common than international arbitration. However, when a transaction is complex and involves large investments, international arbitration prevails. It is mainly used because of the inclusion of alternative dispute resolution clauses in contracts.

The COVID-19 pandemic caused a positive impact in domestic arbitral proceedings as it accelerated the adoption of technology. Particularly in institutional arbitrations, the use of virtual hearings and the electronic submission of evidence and briefs has become a suitable choice for practitioners.

Construction Disputes

Construction disputes submitted to arbitration have increased in the past year, mostly due to the global economic downturn. There has been also an increase in international arbitrations involving the Dominican state, in claims brought by investors and by private parties related to commercial contracts. 

The Centre for Dispute Resolution of the Chamber of Commerce and Production of Santo Domingo is the most used locally for international arbitration, because of the long-standing experience administering cases, and because its rules are more advanced and aligned with the current practice. No new arbitral institutions have been recently established. 

International and Domestic Arbitration

There are no specialised courts to hear disputes related to international arbitrations and/or domestic arbitrations. The Civil and Commercial Chamber of the First Instance Court of the National District is expressly designated in Law 489-08 as the competent court to rule on requests for recognition and enforcement of foreign arbitral awards. 

First instance courts of the place of arbitration or of the domicile of any of the defendants, or of the claimant party, may intervene in arbitration proceedings in limited circumstances, such as when seized to assist in the appointment of arbitrators, assist in obtaining evidence, or to order the adoption of interim measures. 

The Civil and Commercial Chamber of the Court of Appeals of the seat of arbitration is the competent court to decide challenges against awards.

The primary source of law relating to the recognition and enforcement of commercial arbitral awards, arbitration agreements, and arbitration proceedings in the Dominican Republic is Law 489-09 on Commercial Arbitration. This law governs domestic and international arbitration proceedings that take place in the Dominican Republic, as well as the enforcement of domestic and international awards. 

UNCITRAL Model Law

Law 489-08 is based on the UNCITRAL Model Law, with a few variations. For example, a specific procedure is set out for the notification of the request for arbitration when:

• the Dominican State acts as defendant in an arbitration;
• the number of arbitrators must be an odd number;
• there is a time limit to initiate arbitration proceedings when an interim measure is granted by a local court.

There have not been significant changes to Law 489-08 since enacted in 2008. A bill was drafted to improve certain provisions of Law 489-08, but it has not been submitted to Congress. 

A bill to amend Law 50-87 on Chambers of Commerce and Production, which established institutional arbitration, is currently being revised by Congress. The amendments do not cause any major impact in the arbitration landscape in the Dominican Republic.

Legal Requirements for Arbitration

The general rule for an arbitration agreement to be enforceable is that it has to be in writing, a requirement that is met when the agreement’s content is recorded in any form that is accessible for subsequent reference; however, this requirement is considered to be ad probationem, to evidence the act or compromise executed by the parties. 

The legal requirements for an arbitration agreement to be enforceable under the laws of the Dominican Republic are those set out in Article 1108 of the Civil Code: the agreement must have a valid object and cause, and the person entering the agreement must have legal capacity to provide consent.

The Governing Laws of Arbitration

The general rule is that only matters that can be submitted to compromise and settlement shall be referred to arbitration. The restrictions imposed by law to arbitrability relate mostly to specific domains: matters relating to the civil status of a person, separations between husband and wife, criminal cases and cases that concern public policy. 

Law 489-08 does not contain a definition of ‘public policy’; this is a constantly evolving concept with a social, moral, and political component. Although International Private Law 544-14 dated 18 December 2014 attempted to define the terms 'domestic public policy' and 'international public policy' of the Dominican Republic, these terms remain vague.

Arbitration Agreements

Arbitration agreements are usually enforced by courts in the Dominican Republic.

In a decision issued in January 2020 the Supreme Court of Justice affirmed that when parties have agreed to submit their disputes to arbitration, this choice of forum takes precedence regardless of the refusal of a party to participate, reaffirming the positive and negative effects of arbitration agreements (First Chamber of the Supreme Court of Justice, 29 January 2020, Judgment No. 6).

Arbitral Clauses

Law 489-08 recognises the principle of separability of the arbitration agreement. The arbitration agreement included as part of the contract is independent from the other terms of the contract; the invalidity or unenforceability of the underlying agreement does not necessarily affect the arbitration agreement.

Local courts tend to apply the rule of separability. 

One important feature of Law 489-08, in support of the separability rule and the kompetenz-kompetenz principle, is that there is no express exception (ie, a contention that the agreement is null and void, inoperative or incapable of being performed) for local courts to retain jurisdiction when the defendant has raised a defence on jurisdiction and proves the existence of an arbitration agreement.

There are no limits on the parties’ autonomy to select arbitrators in the Dominican Republic.

In ad hoc proceedings, when the tribunal is composed of three or more arbitrators, each party shall appoint the arbitrators which proportionately correspond to each side, and the remaining arbitrator, who will act as chairman of the tribunal, will be appointed by the arbitrators previously selected. 

There is no default procedure for multiparty arbitrations; however the intention of the procedure set out by Law 489-08 is to give parties equal right to participate in the constitution of the arbitral tribunal.

Appointment of Arbitrators

A court in the Dominican Republic can intervene in the selection of arbitrators. When a party fails to appoint the arbitrator within the stipulated period, the appointment shall be made by the Civil and Commercial Chamber of the First Instance Court of the place of arbitration at the request of the opposing party. If the parties have not agreed on a place of arbitration, the request for appointment shall be filed with the first instance court of the domicile of any of the defendants. If their domicile is located abroad, the competent court will be the first instance court of the domicile of the claimant-party. If such domicile is abroad, the competent court will be the first instance court elected by the claimant party.

The court may only deny a request for the appointment of arbitrators when the requesting party has not provided evidence of the existence of an arbitration agreement. The court required to appoint the arbitrators must observe any qualification requirements established by the parties in their agreement and must take into consideration the subject matter in dispute.

Particular Provisions

There are provisions in Law 489-08 governing the challenge or removal of arbitrators. In ad hoc arbitrations, the parties may agree on the procedure of the challenge or removal. If no agreement is met, the challenging party may file a challenge or request to remove an arbitrator before the Court of Appeal of the place of arbitration. 

The general rule is that arbitrators must be independent and impartial in accordance with Article 16 of Law 489-08. An arbitrator may be challenged when circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or when the arbitrator does not possess the qualifications agreed to by the parties.

Each arbitrator has the obligation to disclose any grounds that may give rise to justifiable doubts as to his or her impartiality or independence, when appointed and at any time during the proceedings, whenever new circumstances arise that may result in a potential conflict of interest.

The arbitration rules of the Centre of Dispute Resolution of the Chamber of Commerce and Production of Santo Domingo establish the same requirements as to the arbitrator’s independence and impartiality, and the obligation to disclose potential conflicts of interest. 

There are subject matters that may not be referred to arbitration under the governing law of the Dominican Republic, such as matters relating to the civil status of a person, separations between husband and wife, criminal cases, and cases that concern public policy. The term 'public policy' remains vague.

Rulings of Arbitral Tribunals

An arbitral tribunal has priority over a domestic court in deciding a party’s challenge to the tribunal’s jurisdiction. The positive and negative effects of the competence-competence principle are recognised under Article 20 of Law 489-08.

Once constituted the arbitral tribunal is competent to rule on its own jurisdiction. A party making a jurisdictional challenge before the arbitral tribunal shall raise the motion when submitting the statement of defence. A party is not precluded from raising jurisdiction objections when such party appointed or participated in the appointment of an arbitrator. 

A motion that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter that is allegedly beyond the scope of its authority is raised during the arbitral proceedings. 

The arbitral tribunal may address these issues in a preliminary award before ruling on the merits of the case. The award rendered may only be challenged through an annulment action. The initiation of an annulment action does not stay the arbitral proceedings.

According to Article 12 of Law 489-08, courts cannot address issues of jurisdiction of an arbitral tribunal, but rather they must refer the parties to arbitration. In addition, courts are not allowed, in principle, to evaluate prima facie if the agreement is null and void, inoperative, or incapable of being performed. Courts willingly apply the competence-competence principle. 

The decision rendered by the court denying jurisdiction is not subject to appeal.

Under Law 489-08, parties may go to court to challenge the jurisdiction of the arbitral tribunal only after an award has been rendered. The only available action is the request for annulment of the award established in Article 39 of Law 489-08. The time limit to challenge an arbitral award is one month after service of the award.

The challenge against awards is not an appeal, since the Court of Appeals cannot review the merits of the case. The Court of Appeals is not a superior instance with regards to the arbitral tribunal, and by agreeing to arbitration the parties decided that it was for the arbitral tribunal or sole arbitrator to solve the dispute, and such power cannot be transferred to local courts by way of a challenge.

When a party commences court proceedings in breach of an arbitration, courts will enforce the arbitration agreement and refer the parties to arbitration if the defendant so requests. There is a general willingness of national courts in the Dominican Republic to enforce arbitration agreements and allow arbitration proceedings. 

Law 489-08 does not contain any provision addressing the circumstances where arbitral tribunals can assume jurisdiction over individuals or entities that are neither party to an arbitration agreement nor signatories to the contract containing the arbitration agreement, and there is no record of decisions from the courts specifically referring to this issue or the situations in which consent to arbitrate may be inferred or presumed, thus extending the arbitration agreement to non-signatories. 

However, the Supreme Court of Justice implicitly admitted that the arbitration agreement in a main contract may extend or cover disputes from ancillary or supplementary contracts (First Hall of the Supreme Court of Justice, 13 December 2006, Judgment No. 13).

Interim Measures

An arbitral tribunal in the Dominican Republic can award preliminary or interim relief. 

According to Article 21 of Law 489-08, the arbitral tribunal may, at the request of a party, grant interim measures, and require the requesting party to provide appropriate security in relation to the measure. The decision of the arbitral tribunal on interim relief will be subject to the rules on challenges and enforcement applicable to arbitral awards, except those relating to the suspension of enforcement of the award.

The decision of the arbitral tribunal on interim relief is binding.

The law does not set the conditions to order interim measures, nor refers to types of relief that can be awarded. Judges and arbitrators usually take into account whether the purpose is to preserve the status quo, or to ensure the effectiveness of the award.

Courts may order an interim relief before or during the arbitration proceedings when requested by a party. If the court orders such relief, it shall request the petitioner to submit its arbitral claim within 60 days from the date the order is issued. The court may also require the party requesting an interim measure to provide appropriate security, if necessary. 

The request for adoption of an interim measure filed before the court is ex parte. Once the arbitral tribunal is constituted, if it orders the suspension or termination of the interim measures adopted by the court, the decision of the arbitrators prevails.

The court may also grant interim relief in aid of foreign-seated arbitrations.

National legislation is silent on emergency arbitrators.

There is no express provision on Law 489-08 referring to the power of the arbitral tribunal or local court to award security for costs. 

Law 489-08 on Commercial Arbitration governs the procedure of arbitration in the Dominican Republic. However, subject to mandatory requirements established in the law, parties are free to agree on the procedure for their arbitration.

As per Articles 25 and 27 of Law 489-08, arbitration proceedings are initiated with the request for arbitration, which usually includes details about the nature and issues in dispute, the underlying agreement, the relief sought and the evidence in support of the claims. It shall include the nomination or appointment of the arbitrators. The defendant has 15 days from the date of notification of the request for arbitration to serve a response. 

A hearing is not required. The arbitral tribunal may decide whether to hold oral hearings for the presentation of evidence or for oral arguments, or whether the proceedings shall be conducted based on documents and other materials. However, a hearing shall be held if a party or both parties so request or when the tribunal orders it on its own initiative, to the extent that there is no prior agreement to the contrary. There is no set of rules applicable to hearings.

One of the few mandatory requirements for the conduct of the proceedings is to ensure that the parties are treated equally and that each party is given a full opportunity to present its case.

Within the powers granted to arbitrators by Law 489-08 are the ability to request from the parties further clarification or information, and to order the production of evidence and appointment of experts when deemed necessary. Arbitrators can also terminate specific stages within the evidentiary hearing when the purpose sought with the evidence has been fulfilled, or when the arbitrators feel adequately informed.

There is no express legal provision on whether a foreign lawyer may appear as counsel for a client before an arbitral tribunal, when such assistance is the result of said lawyer’s involvement on a particular case and his/her involvement is not aimed at establishing a practice in the Dominican Republic. Our view is that a foreign lawyer may represent and be lead counsel for a client in an international arbitration taking place in the Dominican Republic.

There is no discovery process for the collection and submission of evidence in the Dominican Republic. Arbitrators may direct the evidentiary proceedings as they deem appropriate. The tribunal may require a party to produce specific documents, appoint experts to assist in the fact-finding mission, order site inspections, and hear technical experts and factual witnesses. 

Obtaining evidence during arbitration can be done by the arbitrators directly or by requesting the courts to do it pursuant to the provisions in the Civil Procedural Code and applicable treaties. There are no legal restrictions on the presentation of testimony by party employees or any other person; there are no mandatory rules on oaths or affirmations for witnesses testifying in arbitration in the Dominican Republic. The admissibility, relevance, materiality and weight of any evidence are subject to the discretion of the arbitral tribunal. 

The rules of evidence which apply to arbitral proceedings are the same as those which apply to domestic matters. The practice is to require the parties to adduce the evidence on which they rely concurrently with the submission of their respective briefs. 

Under Dominican procedural laws, parties have the burden of producing the evidence that supports their argument (following the rule from the proceedings before local courts of actore incumbit probatio). However, the admissibility, relevance, materiality and weight of any evidence are subject to the discretion of the arbitral tribunal.

Article 32 of Law 489-08 provides that the arbitral tribunal, or any party authorised by the arbitral tribunal, may require court assistance to order the production of documents or depose witnesses. 

Law 489-08 does not limit the scope of assistance to certain types of evidence. However, for civil and commercial matters, a court cannot issue an order with the effect of forcefully compelling a person to appear or provide evidence unless it is a public institution. In the event of disobedience, the only sanction is a small fine.

Arbitration proceedings, both ad hoc and institutional, are confidential. However, if an annulment is requested the documents filed for such purpose, including the award, will become public.

Jurisdictional Conditions for Arbitral Awards

According to Article 36 of Law 489-08, the award must be:

• in writing;
• signed by the sole arbitrator, or by the simple majority of the arbitrators, indicating the reasons of the missing signature(s);
• duly motivated (unless the parties have agreed otherwise);
• inclusive of the date and location of its issuance; and
• inclusive of the costs of the arbitration (ie, fees and expenses of the arbitrators and, where appropriate, the fees and expenses of the defence attorneys or representatives of the parties, the cost of the service provided by the institution administering the arbitration and the other expenses originated in the arbitration procedure that were admitted), subject to the agreement of the parties.

The arbitrators may include dissident opinions and must notify the award in the following five days of its issuance or in the manner provided by the parties.

Law 489-09 does not provide a time limit for the delivery of the award.

Arbitrators cannot award indirect and punitive damages as these are not allowed under Dominican law. 

Law 489-08 does not provide for anti-suit injunctions issued by arbitrators enjoining parties to stay litigation proceedings, and there is no reported case that refers to this matter. It is unlikely that a court would comply with such a decision since it is not within the powers of arbitrators to give orders to domestic courts, except to request assistance in obtaining evidence. Courts, however, are required to decline jurisdiction in the presence of an arbitration agreement.

Interest is available as an additional remedy under the legal system of the Dominican Republic. In matters of civil liability, the victim has a right to receive full compensation for the damages suffered, appraised at the time of a definite decision. Awarding interest complies with this rule, given that it is a mechanism for indexation of the indemnity.

Parties may claim reimbursement of costs incurred in arbitration proceedings. Upon the request of the parties, the arbitral tribunal may fix the costs of the arbitration in the award; these costs include the fees and expenses of the arbitrators, the costs for legal representation of the parties, fees and expenses of the arbitral institution and any such costs incurred in connection with the proceedings.

There are no grounds for appeal; the only procedural recourse for parties is via grounds for annulment.

Challenges Available Under National Law

Parties cannot expand the scope of challenge of awards. The parties can exclude the scope and even waive their right to request the annulment of the award. However, any waiver will not prevent a challenge of the award if such challenge is based on a conflict with public policy rules of the Dominican Republic, or the violation of the rules of due process, and in particular the right of defence. According to Article 111 of the Constitution and Article 6 of the Civil Code, parties cannot modify or waive their agreements under any public policy provision. Law 489-08 even affords judges the faculty to vacate or refuse enforcement of an award based on these grounds.

The Court of Appeals cannot review the merits of the case. The Court of Appeals is not a superior instance with regard to the arbitral tribunal, and by agreeing to arbitration the parties accept that it is for the arbitral tribunal or sole arbitrator to solve the dispute, and such power cannot be transferred to local courts by way of a challenge.

The Dominican Republic is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Dominican Republic made no reservation when signing and ratifying the Convention. 

The Dominican Republic is also party to the Inter-American Convention on International Commercial Arbitration (Panama Convention) ratified on 24 December 2007.

Standards for Enforcing Awards

Parties need to request the recognition and enforcement of their awards by filing a request before the First Instance Court of the district where the award was issued, or of the National District if it is a foreign award (unless issued in an arbitration administered under the rules of any centre for dispute resolution of a Chamber of Commerce and Production established under Law 50-87).

The attitude of courts towards requests for recognition and enforcement of foreign arbitral awards has been positive. However, Law 489-08 provides that judges may deny recognition and enforcement of a foreign award when it has been annulled or suspended at the seat or when it is still not binding on the parties.

The set-aside procedure does not stay enforcement of the award, but the party may request the suspension before the President of the Court of Appeals. If admitted, the party will have to present a guarantee.

A defence of sovereign immunity from the state or a state entity will not be successful, as Article 220 of the Dominican Constitution recognises the ability of the Dominican state to enter into arbitration agreements.

The general approach towards the recognition and enforcement of arbitral awards has been positive, but the courts can refuse enforcement based on public policy grounds, including the violation of the right to defence and due process.

The jurisdiction of Dominican law does not contain any provision governing class action arbitral proceedings or group arbitration.

There are no mandatory rules of professional ethics that apply to counsel in an international arbitration in the Dominican Republic. The Code of Ethics for Dominican Attorneys applies to counsel in local proceedings.

With respect to arbitrators, Law 489-08 applies the internationally prevalent standards of independence and impartiality.

There are no rules or restrictions on third party funders.

There is no provision in Law 489-08 referring to a consolidation of arbitration proceedings. 

There is no provision in Law 489-08 referring to third parties. National courts do not have the ability to bind foreign third parties.