What is arbitration?
Like in many other countries, arbitration in El Salvador is an alternative “Private Justice” system, for the procedures carried in the courts of justice of a country. Arbitration processes in El Salvador helps to solve disputes between parties, in order for them to put an end to their differences in a civil manner. Through the intervention of a third neutral party denominated “Arbiter” who solves the dispute trough an “Arbitration award” (similar and equivalent to the ruling of a judge) without attending to a court of justice.
The arbitration procedure may be domestic or international.
Which are the kind of arbitration processes that exist in El Salvador?
The arbitration may be classified as ad-hoc or institutional, based on its corresponding procedure.
Regarding Ad-hoc arbitration in El Salvador, the parties or the Law, determines the procedure to follow, based in specific circumstances.
Regarding institutional arbitration in El Salvador, there are pre-established rules by an arbitration center, which administrates the procedure and charges a fee.
Regarding how the matter is solved, the arbitration is classified as: in Law, Technical and in Equity.
At in Law arbitration, arbiters solve based on the chosen legal framework.
At technical arbitration, arbiters rule based on the technique, science o art related to the dispute, under technical criteria.
In equity, the matter is solve based on universal justice parameters and in accordance to its especial knowledge and understanding.
- Arbitration in El Salvador like in other countries is private.
Arbitral procedures include oral hearings that are not disclosed to the public. Parties and arbiters are generally bound to respect strict confidentiality rules. Therefore, corporate secrets and private information may be protected from the public, the media and/or market competitors.
- Arbiters are experts
Parties can freely choose their arbiters as long as they are impartial and independent. Arbiters from different nationalities and fields can be chosen. This guaranties the professional and personal expertise of those who will solve the dispute.
- Arbitral awards in El Salvador are enforceable
Arbitral awards can be enforceable in more than 180 counties around the world. In many countries is possible to enforce the arbitral awards in a way easier than court rulings. This is due to the existence of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the “New York Convention”)
- Arbitration may save time and money
Customized procedures and the absent of appeals and/ or revision procedures, make possible that the arbitration processes, may be concluded within a relatively short period (within 3 to 6 months). In addition, it is possible to save costs either choosing and appropriate language and/ or site, which avoid unnecessary translation and/ or travel costs.
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