Interference in the Conduct of International Arbitration by the Political Constitutions of Ibero-American Countries

The Country-by-Country Study analyses the interferences of 16 Ibero-American Countries’ constitutions with international arbitration. These analyses were received by the ICC Institute between November 2019 and January 2021 in response to a questionnaire aimed at gaining a better understanding of the relationship between each region’s constitutions and constitutional courts and international arbitration. Contrary to what one might assume, interference between a country’s constitution and arbitration is not a new phenomenon in Ibero-America. Arbitration has been enshrined as a right for subjects of the Spanish Empire since the Spanish Constitution of 1812. The use of clauses in a country’s constitution banning or restricting the use of arbitration (particularly for matters involving the State or foreign investors) also became a regional trend when Latin American countries professed their almost unqualified adherence to the often-misunderstood Calvo Doctrine.

Although Ibero-America has more recently been well known for embracing international arbitration, today’s constitutions still contain references to arbitration and interfere with its use. Added to historical interferences, this phenomenon expanded as a result of the trend known as the new Latin American constitutionalism. In fact, one of the main features of many of the constitutions enacted towards the end of the 20th century is that they are “mixed constitutions” with overlaps between State models and diverse economic and political agendas. The wish (which is otherwise a laudable one) to give bills of rights and the judiciary more power in the form of constitutional remedies that ensure the supremacy and observance of the constitution opened up new ways to challenge arbitral decisions and interfere with arbitral proceedings. It does not seem an overstatement to assert that the new regional constitutionalism has created a legal system based on the protection of fundamental rights that runs parallel to traditional civil and commercial law for the protection of individual prerogatives (subjective rights).

An analysis of the answers to the questionnaire shows that a country’s constitution and arbitral proceedings generally interact in two different ways: On the one hand, constitutions contain provisions directly or indirectly regulating aspects of arbitration (direct interference). And, on the other, the national courts may interfere in arbitral proceedings or at the award enforcement (or annulment) stage based on constitutional provisions (generally those providing for some kind of constitutional remedy to protect fundamental rights or collective rights) (indirect interference).

Interference between a country’s constitution and international arbitration is not a positive or negative phenomenon in itself. Both a constitutional provision and judicial intervention are capable of either protecting or reducing the effectiveness of this dispute resolution mechanism. In any case, it has been noticed that parties in a number of jurisdictions tend to rely on constitutional supremacy and avail themselves of the actions enshrined in their respective constitutions to diminish the effectiveness of arbitrators’ decisions and even neutralise the effects of arbitral awards in practice. This may be explained by the privileged position enjoyed by constitutional judges in certain legal systems (particularly if, under the legal system concerned, arbitration is seen as originating from the State’s jurisdictional power). Taking account of all of the above, this complex Study analyses the interference of Ibero-American countries’ constitutions based on whether their impact on international arbitration is positive (Section 2) or negative (Section 3). The conclusions of this Study are presented in Section 4.