NEW RULES OF CUBAN COURT OF INTERNATIONAL COMMERCIAL ARBITRATION (CCICA)

2018-11-23 News Newsletters

The Cuban Court shows spirit of renewal and commitment to the business world

Introduction

The new rules of procedure of the Cuban Court of International Commercial Arbitration (CCICA), were approved by Resolution no. 8 of the president of the Chamber of Commerce of the Republic of Cuba.

There are two singularities that are key to highlight:

1) Unlike many other courts of arbitration in the world, the Cuban Court was created by law and its rules of procedure were contained in it; and so it continued to be when its organization and functioning changed in 1976, both moments – and it is also good to point out – coinciding with the signature of the main international arbitration conventions.

And 2) it is a Court that, in principle, is only called to hear litigation of international character.

The first thing changed radically when Decree Law 250 was adopted in 2007, which, despite continuing to be the legal support of the Court, and not an arbitration law, abstained from regulating the procedure and gave way to adoption for the first time. , in an independent body, the arbitration rules of the Court, as well as other regulations no less important for its organization and functioning.

And secondly, also changed by virtue of the legal text itself, opening for the first time a space to which the parties in a litigation of national character, could go to the arbitration court as an alternative to the Cuban state jurisdiction.

Objectives

The new rules of procedure of the Cuban Court of International Commercial Arbitration, outline the following among its main objectives:

Establish and regulate the declaration of availability, impartiality and independence of the arbitrators, as well as their responsibility in complying with the deadlines and terms in the arbitration process, a practice that, although assumed and demanded by the Court, was absent in its rules.
Specify the responsibilities corresponding to the president and the Secretariat of the Court, on the one hand, and the arbitral tribunal, on the other, for which purpose it introduces a separation of the proper jurisdictional phase, in charge of the court, from the previous, organizational phase of the process, in charge of the management of the Court as an institution; which allows it to abandon the structure followed by the previous rules, largely governed by its regulatory nature of the law.
To perfect the procedure for the processing of the incidents of recusal and excuse of the arbitrators, according to the phase in which they may take place, seeking greater clarity and transparency.
Clarify the precautionary measures that the arbitral tribunal may adopt, and the requirements for its adoption, as well as the procedural moment in which it is called upon to resolve them, trying to supply, as far as the legal framework allows, some gaps in the Cuban arbitration practice.
Specify the preliminary hearing, detailing its specific content and the decisions that will be adopted in each case, as well as the role and manner of conducting the hearing, as these are the configurating spaces par excellence of the process.
And finally, to homogenize, as far as possible, the way to structure the rulings, in order to determine the relevant aspects that should be recorded, contributing to their clearer expression and interpretation, and to make transparent the arguments and actions taken into account by the arbitral tribunal.

Structure

The new rules are organized in a simplified way, split into three chapters. Chapter I, contains provisions of a general nature, in which some definitions are given to facilitate their understanding, its scope of application is established, the organization of the process is planned in two phases – a prior one, of organization of the arbitral tribunal, under the direction and control of the Secretariat of the Court and its president (chapter II), and another properly judicial, under the jurisdiction of the court, once it is constituted (chapter III).

These first provisions also set out the rules relating to the appointment of arbitrators and the conditions required of them – independence, impartiality, confidentiality and timeliness – the possibility and timeliness of their recusal, the rules to be followed regarding notifications, the way to compute the terms, and the rules related to the evidence and the request and adoption of precautionary measures, as well as the forms of the arbitration resolutions, and the right of the parties to challenge the actions of the arbitral tribunal.

Next, the new rules in chapter II, aim to conform the first phase, directed properly to the organization of the process, regulating the presentation of the writings of demand and answer, establishing the requirements and the content demanded to these, the payment of the rights of arbitration, and concludes with the constitution of the arbitral tribunal, including the rules regarding its nomination and confirmation and the way to proceed in the cases of inclusion of third parties (not signatories of the arbitration agreement) or replacement of any of the members of the arbitral tribunal.

And finally, chapter III. Once the arbitral tribunal is constituted, focuses on the procedure, giving course to it with the realization – not mandatory – of a preliminary hearing, the holding of the hearing, the closing of the file and the issuance of the award.

Area of application

Its scope of application, continues to be that of contractual or extra-contractual litigation, of an international nature, arising in the field of business, as established by Decree Law 250, to which the new rules are expressly referred (New Rules, in forward NR, art, 2). In correspondence with this, they can also be applicable to contractual or extracontractual litigation that is submitted to the Court by mixed or totally foreign capital companies, incorporated in Cuba, in their relations with each other or with a national legal or natural person, as well as by the parties to international economic association contracts, or other forms of joint business with participation of foreign capital (DL 250 article 11), only that, in this case, the application of Cuban law will be imperative (DL 250 article 29).

This open possibility in the arbitration regulations was picked up by the Cuban legislator first in the Decree Law on the Special Zone of Mariel and later by the Law of Foreign Investment.

Access

In terms of access to arbitration, the new rules preserve the slack that initial legislation and procedural regulations have taken care to maintain. In this sense, the Court not only knows of the litigation when between the parties involved there is an agreement or arbitration agreement of submission to it, but also when they perform procedural acts that show the willingness and conformity to submit to the Court. Therefore, as a general rule, even if the pact is absent, the Court only appreciates and declares the incompetence if it is alleged and opposed by the defendant. (DL 250, article 12.1)

On the other hand, the Court also knows of the litigation that the parties are obliged to submit to its decision because their jurisdiction in international treaties has been established (DL 250, Article 12.2)

Referees

According to the new rules, only those designated by the president of the Chamber of Commerce and listed on the list (NR art. 5) can act as arbitrators (regardless of these individuals having to be of Cuban nationality, or requiring that they must be law graduates). These continue to be appointed for a period of two years, subject to renewal, and are obliged to act independently and impartially, subject to the principle of confidentiality (N.R. art.6); aspects on which, when nominated for a process, they are called to formulate a declaration, which also includes the provision of the time necessary to assume such responsibility, subject to the evaluation of the president of the Court.

If the recusal of any of the nominated arbitrators takes place during this preliminary phase, the decision will be adopted by the president of the Court, and in the event that the court is constituted, it must be decided by the other members of this, unless it was against two of the members of the arbitral tribunal, or against the sole arbitrator, in which case the decision will continue to correspond to the president of the Court (NR articles 8 and 9). In any case, if the arbitrator informed about the challenge against him, expresses his will to depart from the process, the incident of disqualification will not take place (N.R. art.10).

Notifications

All notices to the parties, in both phases of the arbitration process, are called to be made through the Secretariat (N.R. article 13) and are considered to be made on the day that the party is informed of the content of the procedural action. These can be done by delivering the written or procedural resolution to the party or its representative or by postal mail or through means of info-communication to the address indicated by the parties, leaving it clearly established that any change of address is the responsibility of the parties bring it to the attention of the Secretariat (NR art.14).

Until the Secretary fails to notify the defendant of the contents of the lawsuit established against him, the relationship is not constituted and the arbitration process initiated (Article 15).

Terms

For the purposes of setting the procedural terms, the terms begin to run on the day following that in which the notification is received, calculated in calendar days unless they are expressly defined as labor. In any case, if the day of the term is a holiday or non-working in the country of residence of the party to which the proceeding is directed, the term will be extended until the first following working day (N.R. articles 16 and 17).

Precautionary measures

Based on article 34 of DL 250, the new rules reach a more precise regulation on precautionary measures (NR arts.18 and 19), being able to request these, both the plaintiff and the defendant in case of establishing a counterclaim , having to provide sufficient elements to support the alleged right and that the non-adoption of the measure may affect their interests.

Within the scope of its powers, the arbitral tribunal may order as precautionary measures, among others, the following:

a) That the existing situation between the parties be maintained or restored, pending the settlement of the controversy;
b) that measures are taken by any of the parties to prevent any current or imminent damage that may affect the interests of the other party;
c) that one of the parties refrains from carrying out certain acts that may cause damage or impairment to the interests of the other party;
d) that the parties adopt some diligence to preserve assets that allow executing the award; Y
e) that elements of evidence that may be relevant and relevant to the resolution of the dispute be preserved by the parties

Regardless of them, it is important to note that Article 35 of DL 250 franchise to the parties the possibility of requesting these measures before the ordinary courts, possibility that is also found in Article 799 of the Civil, Administrative, Labor Procedure Law and the Economic.

Evidence/Proof

In evidentiary matters, changes occur when setting the burden of proof, preserving the principle that each party must prove the facts alleged, as well as those that oppose those alleged by the counterparty, abandoning the possibility of reversing the burden of the latter. .

On the other hand, in addition to accepting all the means of evidence usually admitted in law, it incorporates that in the event that some transcendental document for the solution of the process is only in the possession of one of the parties, the other party may request the court the exhibition of said document (NR article 22).

Similarly, the power of the arbitral tribunal to determine the admission and relevance of the means of evidence provided by the parties and the requests for exhibits formulated (NR Article 23), at the same time, with the support of the Article 33 of DL 250, reiterates the power of the court to request the judicial assistance of the ordinary courts, interested in the adoption of measures aimed at securing or obtaining a probative means (NR Article 24).

Arbitration resolutions

Although these do not vary in the new regulation, and may take the form of procedural ordinances, orders or awards (NR Article 26), it does introduce the possibility of orally dictating them during the preliminary hearing or at the hearing, the case of the procedural order (NR article 27). Two particular cases of oral pronouncements, however, require attention: when a precautionary measure is adopted (Article 56) and when a judgment is handed down orally in the case of conciliation (Article 61), which will be strictly contained in an award.

Challenges

The so-called right to object is incorporated for the first time into the rules, giving the parties the possibility to combat the ordinances and orders issued by the Court or the arbitral tribunal, within ten (10) days after notification, stating the bases on which it bases its objection, establishing as procedural budget that when they do not do it, it is considered that the parties consent to the content of the resolution issued (NR art 30). This does not prevent, in our opinion, for the parties to object directly – “viva voce” – the action of the court acting on the occasion of holding the preliminary hearing or the hearing.

Representation

The greatest flexibility achieved in this field is respected. The parties may appear in the proceeding by their own right, or by proxy or legal representation duly accredited, and may appear as procedural representatives of the parties both Cuban and foreign lawyers (N.R. art.32).

Demand and Answer

Although the formal requirements and content of the writings of demand and answer, fundamentally are reiterated, being those that are usually required in international practice, the new rules introduce the requirement to present a digital version of these writings (NR Articles 33 and 37).

In both cases, it is the responsibility of the Secretariat to examine the briefs of the claim and answer, and if it considers that they have been presented without meeting any of the requirements established in an identical manner for both (NR Article 37), it will require the submitting party to correct the omission. , within a period that shall not exceed thirty (30) days, counted from the date on which it is required (NR article 35).

In the case of the answer, it is foreseen that when the complexity of the case warrants it or the obtaining of certain means of proof justifies it, the defendant, before the deadline to answer, may request the President of the Court an extension of the term to do it. The new deadline to answer may not be extended for more than thirty (30) additional days (N.R. art- 39).

For the case of non-contestation, the new rules provide that the process continues to the detriment of that party, proceeding by the president of the Court to the appointment of an arbitrator with a view to the integration of the court, without the failure of the defendant to appear implies an acceptance by the latter of the facts or of the claims formulated by the applicant, to which it is appropriate to prove and uphold these (NR Article 42).

Incompetence

Once the jurisdiction of the Court has been contested by the defendant in its response, said challenge can be examined and resolved, at two different moments: in the initial phase, of organization of the process, in which it is up to the president of the Court, and, in the event of being confirmed by the latter, in a second moment, in this case by the arbitral tribunal constituted, in accordance with the “kompetenz kompetenz” principle that is recognized in the Court’s DL, which may be resolved in the same sense or in a manner different from that previously resolved by the president of the Court. (DL 250, Article 13, N.R. Articles 40 and 41).

Arbitration rights

With the demand or counterclaim, the arbitration rights are paid, as an indispensable requisite for the process to be carried out (N. Article 44). These are established in resolution 19 of the president of the Chamber of Commerce of the Republic of Cuba, dated September 13, 2007.

Arbitral tribunal

With the constitution of this one, the first phase of the process is closed in principle, in charge of the Secretariat and the presidency of the Court. The rules regarding their integration, number of arbitrators, supplementary rule in the absence of determination of the parties, and way of proposing the arbitrators, are maintained. However, it is introduced as a relevant control element, the requirement to them of a declaration of availability, independence and impartiality, whose model is attached to the rules.

Although this has been an established practice in the Court, undoubtedly the obligation to reveal any link or circumstance that could call into question its independence or impartiality (conflict of interest), points to greater transparency, reserving to the president the power to evaluate and decide on the availability of the nominated arbitrators for the purpose of proceeding or not to confirm it.

The nominated arbitrators and the president, in due course, must declare, within a period of ten (10) days after receiving the information referred to in the preceding article, that they have time available to assume the responsibilities emanating from their participation in the process, as well as revealing any link they may have had with any of the litigants, which must be known by both parties, and if this affects their impartiality in the process for which they have been appointed. The Declaration, formulated using the model attached to the rules as Annex 1, must be signed by each arbitrator, filled out, which the Secretariat will inform the parties (Article R. 48).

Third non-signatories

This aspect, increasingly relevant in the casuistry of the Cuban Court, however, had no alteration. They are maintained as criteria for the eventual inclusion of a third party, not a signatory of the arbitration agreement, which is an interest of the latter or has its agreement, or imposes to extend to the latter the effects of the agreement due to its contractual or corporate relationship, reserving the possibility of recusing the members of the arbitral tribunal if at the moment of resolving on its incorporation it is incorporated (NR Article 51). Usually, however, that, raised the incorporation of this third in the claim itself, is the president who usually corresponds to decide – indirectly – on their incorporation, which is usually challenged by incompetence.

Referee replacement

It also incorporates as a novelty, the way to proceed for the replacement of an arbitrator to give continuity to the process, including the necessary provisions regarding the eventual reproduction of the arbitration proceedings that have taken place (N. Article 52).

Preliminary Hearing

With the precedent of its introduction, in court, in the process of economic rooms, popular courts, established by DL 241 of 2006, the preliminary hearing was incorporated into the Cuban arbitration practice, in the rules of procedure of the Court, approved by resolution no. 12 of the President of the Chamber of Commerce of the Republic of Cuba, and initially had mandatory character, aspect that was subject to further modification in the version of the rules adopted in 2009, being empowered the arbitral tribunal and the parties to dispense with its celebration.

Of two articles that regulated it in the previous regulation, the new rules now allocate ten (NR arts.53 to 62), bringing it closer to the so-called “mission statement”, present in the ICC Arbitration Rules and incorporated, from of this, in the regulations of other courts of international arbitration. This is, in our opinion, one of the most important extensions of the new regulation by its order and functionality, imposing on the arbitral tribunal to inform the parties, within a period of ten days counted from its constitution, whether or not to proceed summoning the same, being able in that sense, go directly to convene the hearing – if the parties had not requested to dispense with it – being obliged to issue a procedural order setting the purpose of the process and pronouncing on the admission of the proposed tests.

The new rules give as a reason for the hearing of this hearing, both the setting of the object of the process, as the clarification of any claim of the parties, as well as the possible consideration of precautionary measures that may have been requested, for which purpose the The law establishes the manner in which the arbitral tribunal must proceed in relation to each of these procedural aspects, leaving open, in addition, expressly, the possibility of modifying the claims or requiring new evidence.

At the other extreme, for the sake of procedural economy, assuming that there are elements to do so, the court may invite the parties, with their approval, to present their allegations in order to decree the closing of the hearing at the hearing itself. file, and proceed to issue an award within the term established for it; or, promote reconciliation with the same purpose of concluding the process of arriving at an agreement that can be approved by means of an award.

View

Together with the establishment of its purpose – practice of proof and final expositions of the parties -, deadline for convening it – thirty days in advance – possibility of postponement, private nature of this and effects of non-appearance, commonly present in all regulations of arbitration, the new rules, for more didactic purposes, perhaps, than prescriptive, are ahead to establish the order in which the court must proceed for its conclusion, also setting the tenor of the act and indicating that at the end of it, is established as a rule, the closing of arbitration proceedings (NR article 72). However, it always leaves open, as in the preceding rules, the exceptional possibility of, in the face of a new event, presenting new documents and allegations (N.R. art.73).

Even though, as a rule, it is provided that the closing of the file takes place at the conclusion of the hearing, it is not in the minutes of the hearing, however, that it must be disposed of, ordering the court that this be the subject of an ordinance that the latter is called upon to dictate to these single effects, with the importance of constituting the starting point of the computation of the thirty days to dictate the award (NR art 74).

Ruling

The wording of the award as the main arbitration decision – bearing in mind that this, in the case of the Cuban court, is also empowered to issue orders and procedural ordinances – is entrusted to the president of the arbitral tribunal, a rule that, even though it was not established in the previous regulation was practice followed in the Court. And for the first time, the individual vote is regulated, providing that it forms part of the award and is incorporated after the ruling, or in an independent document, if it is very long (N.R. article 77, section 1).

They also maintain the right of the parties to request clarification of any aspect of the award, as well as the correction of any material error or omission in which the court may have committed, leaving the way expeditious, in the latter case, for the performance of any evidentiary procedure that may be necessary and for the celebration, as the case may be, of a new hearing, in order to dictate the corresponding complementary award (NR arts 78-80). Being obliged to issue the award on a reasoned basis, the arbitral tribunal can only do so when the process ends by agreement of the parties, and at the request of the parties.

Expenses and Costs

In this aspect, not least important, the new rules, in their final articles (NR articles 84 to 86), maintain the principle that each party assume the costs incurred and the procedural costs incurred, without prejudice to empower the arbitral tribunal to order that one of the parties compensates another for the expenses caused unnecessarily or in bad faith, or unjustified delay of the process, referring to the regulations approved by the President of the Chamber of Commerce .

The Cuban Court, already over fifty years of existence, with the adoption of new rules of procedure, more than trend, requirement of practice in international arbitration, shows its spirit of permanent renewal and commitment to the business world.

Lupicinio Rodríguez

Lupicinio International Law Firm