On September 9, 2024, Costa Rica’s Legislative Assembly approved the Law to Harmonize Costa Rican Arbitration Regulations (Docket No. 23.259), unifying the national and international arbitration regulatory framework in the country.
This new legislation integrates both types of arbitration under the International Commercial Arbitration Law (Law 8937), which is based on the UNCITRAL Model Law on International Commercial Arbitration.
Key Reforms
The new law introduces significant reforms that directly impact the way arbitration proceedings are conducted in Costa Rica:
Unified Scope of Application: The law now applies to both national and international arbitration proceedings, provided they take place in Costa Rica.
Arbitral Tribunal and Interim Measures: Arbitral tribunals will be able to issue interim measures in both national and international proceedings. Additionally, if the parties agree, a tribunal may be constituted in advance solely to handle such measures.
Reduction of Deadlines: Deadlines for various national procedures have been shortened. In domestic arbitrations, a challenge to an arbitrator must now be filed within five days, instead of the previous 15 days. Similarly, tribunals can rule on preliminary objections within 10 days.
Virtual Hearings: The law allows for virtual hearings via videoconference or remote communication systems, which not only reduces costs but also speeds up the resolution of arbitration cases.
Provisions Regarding Arbitral Awards
Power to Correct and Interpret Awards: The law enables arbitral tribunals to correct calculation, copying, or typographical errors in awards, as well as to provide interpretations on specific points of the award. In domestic arbitrations, parties have five days to request such corrections or interpretations, while in international arbitrations, the deadline is 30 days.
Timeframe for Challenging Awards: The only recourse against an arbitral award is a petition for annulment. In domestic arbitrations, parties have 15 days to request annulment, while in international arbitrations, the deadline is three months.
Enforcement of Foreign Awards: Awards issued outside Costa Rica will be recognized as binding and may be enforced in accordance with the international treaties ratified by the country.
Impact on National and International Arbitration
One of the main advancements of this law is that it removes national arbitration from the Law on Alternative Conflict Resolution and Promotion of Social Peace (RAC Law, No. 7727), unifying all arbitration procedures under Law 8937.
The law also expands the autonomy of the parties in arbitration proceedings. Now, parties are free to choose the language of the arbitration and the arbitrators without significant restrictions.
Finally, the law is awaiting signature and publication in La Gaceta by the Executive Branch.