In its ruling TC/0425/20 of December 29, 2020, the Dominican Constitutional Court ruled on the institution of arbitration in response to a constitutional review appeal filed by a party—whose name is omitted as it is not considered relevant—against a decision handed down by the Civil and Commercial Chamber of the Supreme Court of Justice. This decision rejected an appeal filed by that same party against a ruling handed down by the Second Chamber of the Civil and Commercial Division of the Court of Appeals of the National District regarding an action for annulment that the same party filed before the latter court against an arbitral award issued by an arbitral tribunal of the Alternative Dispute Resolution Center of the Chamber of Commerce and Production of Santo Domingo.
The appellant before the Constitutional Court argued, first, that the guarantee of due process and its right to defense had been violated; and, second, that the case should not have been heard by the arbitral tribunal but by the real estate jurisdiction because the subject matter of the dispute involved a registered property. According to Article 39 of Law No. 489-08 of December 30, 2008, an arbitral award may only be appealed before a court—in this case, the Court of Appeals of the place in question—by means of a petition for annulment when certain requirements established in that article are met.
What is important to note here, beyond the particular circumstances of the case, is the validation given by the Constitutional Court to the institution of arbitration in the Dominican Republic, which it describes “as a system of dispute resolution that is based on the principle of the autonomy of the will of the parties; hence the legitimacy accorded to arbitrators, as well as to the awards they issue, is based on the prior existence of an agreement of wills, where the parties expressly consent to submit their disputes to arbitral justice, rather than to the courts of the Judiciary.”
The Constitutional Court also emphasizes that “by virtue of the legal stability and binding force of arbitration proceedings, the jurisdictional avenues for challenging the decisions in arbitral awards are extraordinary and limited in nature, in that they cannot revisit the merits of the case that was tried and decided through those legal proceedings, but rather the actions of the judges hearing an appeal are limited to procedural aspects and the grounds strictly imposed by the legislature.”
With this criterion, the Constitutional Court reinforces the provisions of Article 39(1) insofar as the action for annulment is the only mechanism for judicial review of arbitration. In any case, the aim is to prevent arbitral awards from being challenged before courts of law solely for the purpose of delaying proceedings or revisiting the investigation of proceedings that corresponds exclusively to arbitrators when they have been granted such jurisdiction by the parties themselves through a voluntary agreement, either through an arbitration clause in the contract or through an arbitration agreement after the dispute has arisen. For this reason, the Constitutional Court reiterates in its ruling that “appeals for the annulment of arbitral awards in court are only intended to verify substantial procedural defects or violations that have arisen at the time of the implementation or hearing of an arbitration proceeding.
Underlying the Constitutional Court’s decision is the distinction between procedural and substantive matters. The fact that the parties freely choose to submit their disputes to an arbitral tribunal does not mean that there is a “privatization” of both procedural and substantive aspects in the process of resolving the dispute by the arbitrators. In other words, arbitration is certainly a form of private justice permitted by law to which the parties may freely and voluntarily resort; but this does not mean that if the rule applicable in the resolution of a case is of a public policy nature, the arbitrators can ignore that rule and decide in accordance with another, because this would lead to the annulment of the award pursuant to Article 39(2)(f) of Law No. 489-08.
In any case, the important thing is that the Constitutional Court has had the opportunity in this ruling to once again validate arbitration in the Dominican Republic, an institution that has been gaining ground and acceptance in many areas of business relations between individuals, who are increasingly resorting to institutional arbitration within the framework of the alternative dispute resolution centers of the chambers of commerce and production by virtue of the provisions of the aforementioned arbitration law.
It is worth noting in closing that one of the areas in which arbitration has been developing in the Dominican Republic is sports, particularly Major League Baseball (MLB), an entity that has a collaboration agreement with the Alternative Dispute Resolution Center of the Chamber of Commerce and Production of Santo Domingo to settle disputes between its teams and players in line with what is followed in virtually all sports, both in the amateur and professional worlds.
