Annulment of Arbitration Award in Construction Case

Dear Friends and Clients,

We successfully obtained the annulment of an arbitral award issued by a tribunal of the National Centre for Mediation and Arbitration of the Chamber of Construction Industry of Quito (CENAMACO).

Thanks to this annulment, we prevented our client from being required to pay a sum of three million three hundred and fifty thousand US dollars (USD 3,350,000).

The original award ruled against our client due to serious irregularities in the arbitral procedure, including the disqualification of one of the arbitrators and the violation of fundamental principles of arbitration.

The defense of the nullity action was led by doctors José Meythaler y Vanesa Aguirre, who were supported by a team of expert lawyers: Jhon Mora, Juan José Peña y Ricardo Enríquez. Together they argued and demonstrated the irregularities of the process, which led to the annulment of the arbitration award.

Key Aspects

This case presented several legal challenges, including:

High amount claimed: USD 3,350,000, plus accrued interest from the issuance of the award.
Irregularities in the arbitral tribunal: The presiding arbitrator failed to disclose having previously advised the client in the same case, compromising their impartiality and violating Article 31(e) of the Arbitration and Mediation Law.
Violation of the principle of confidentiality: Evidence obtained from another arbitration proceeding was improperly used, contravening Article 34 of the Arbitration and Mediation Law.
Questionable assumption of jurisdiction: The tribunal assumed jurisdiction despite inconsistencies in contractual representation.

Impact of the Resolution

The legal strategy adopted resulted in two critical achievements:

Protection of the client’s assets: The payment of a significant amount based on an irregular process was avoided.
Restoration of the right to due process: A violation of fundamental arbitration principles was corrected, reinforcing confidence in arbitration as a legitimate conflict resolution mechanism.

This case highlights the following key points:

The obligation of arbitrators to ensure impartiality: Arbitrators must guarantee transparency and comply with legal provisions, as required by Article 19 of the Arbitration and Mediation Law.
Legal certainty: Decisions must be based on facts and within the legal framework, respecting the principle of equality before the law.
The importance of controls in arbitral proceedings: This ruling sets a precedent that strengthens arbitration as a regulated and reliable mechanism.

Conclusion

This case not only demonstrates our firm’s ability to manage complex arbitration disputes but also reaffirms our commitment to defending the fundamental rights of our clients, particularly the right to due process.

Furthermore, we have established an important precedent that underscores the need to maintain strict controls in arbitration, ensuring that all parties involved act under equal conditions.

This resolution guarantees the fundamental right to an impartial arbitral tribunal and contributes to strengthening the principle of legal certainty in the country.

If you require legal advice or wish to discuss a similar case, do not hesitate to contact us. We are here to help.

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