Arbitration - Alternative Dispute Resolution in Costa Rica

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Arbitration - Alternative Dispute Resolution in Costa Rica

What is Arbitration

Arbitration is one form of Alternative Dispute Resolution, which is defined as a method for resolving disputes outside of a country's judicial system. (see the Arbitration Article in Wikipedia for the full background http://en.wikipedia.org/wiki/Arbitration ) Briefly, two parties may include in any contract or business arrangement a provision for going to arbitration in the event of a dispute regarding the contract or relationship. In Costa Rica this then places the contract under the purview of Law #7727 – Resolution of Conflicts: ( English version at http://www.cica.co.cr/normativas_ley_resolucion_conflictos_7727.php ) This law provides a legal framework for conflict resolution and creates a binding agreement that can be legally enforced outside the court system.

Advantages of Arbitration
The main advantage is that it is not necessary to resolve any conflict regarding the contract in Costa Rica's court system, which is notoriously backlogged.  Contract disputes can take up to 5 years to be resolved in court.  Also, the cost is significantly less because arbitration fees are lower than legal fees, in addition to the hours spent preparing for and entering into arbitration are less when compared to court cases.

Who can use it and how
Anyone may use arbitration under Law 7727, Article 18 -  Arbitration of disputes.  You simply agree in writing that disputes related to the specific contract (or juridical relationship) shall be submitted to arbitration. The agreement may occur at the time of making the contract, or it may occur at the time of a having a specific dispute that the parties agree to submit to arbitration. If the clause is not included in a formal contract, registered in official attorney's records, then it is important to note that the agreement must be in writing and signed by both parties.

There are a number of authorized centers for conflict resolution, and they generally offer model clauses that you may insert into your contract and at the same time you may specify the center for arbitration to be used.  Some centers process as many as 300 cases per year.   According to Costa Rican law, the case must be heard in Spanish and this is the official language for dispute resolution.  Any proof or documentation presented in another language must be accompanied by an official translation from that language to Spanish.  Either party may be accompanied by a translator.

Independent Center for Resolution of Labor Disputes (Centro Autónomo RAC Laboral)

Authorized since: 8 August 2005. RES N° 020-2005-DNRAC.
Renewed: 14 August 2008. RES N° 019-2008-DINARAC.
Expires: 14 August 2011
Methods ADR: Mediation Arbitration
Director: Licda. Mariliz Gurdián Heinsohn
Telephone: 2223-6603
Web Site:
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: 200 metros sur y 100 metros al este de la esquina sureste del Edificio de la Corte Suprema de Justicia, Barrio González Lahman, San José, No. 1097.
Office Hours: Monday – Friday, 8:00 a.m. a 5:00 p.m.

Fees: Site doesn't say

Costa Rican Chamber of Commerce, Center for Conciliation (Centro de Conciliación de la Cámara de Comercio de Costa Rica)

Authorized since: 26 October 1998
Renewed: 9 October 2007, RES N° 0017-2007.
Expires: 9 October 2010
Methods ADR: Mediation, Arbitration
Director: Zoila Rosa Volio Pacheco
Telephone: 2256-40-41, 2221-0005 ext. 102
Web Site: http://www.camara-comercio.com/centro_de_conciliacion_y_arbitraje.php
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: Barrio Tournón, 75 metros al noreste del parqueo del Centro Comercial El Pueblo, Cámara de Comercio de Costa Rica, San José.
Office Hours: Monday – Friday, 8:30 a.m. a 5:00 p.m.

Fees: Conciliation - $200 per session plus $100 per hour for conciliator

Arbitration - $150 inscription, Fees of arbitrator according to sliding scale, .25% to 2.5% ($600 minimum), Fees of center from .1 % to 2% $750 minimum.

Center for Conflict Resolution, Costa Rican Association of Engineers and Architects (Centro Resolución de Conflictos Colegio Federado de Ingenieros y Arquitectos CRC-CFIA)

Authorized since: 16 June 1999
Renewed: 16 December 2008. RES N° 034-2008 DINARAC.
Expires: 16 December 2011
Methods ADR: Mediation, Arbitration
Director: Arq. Ileana Granados Poveda, Directora
Telephone: 2202-3942, 2202-3989
Fax: 2234-6697
Web Site : http://www.cfia.or.cr/crc.htm
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: 200 metros al este de la Pops , instalaciones del Colegio Federado de Ingenieros y Arquitectos, Curridabat
Office Hours: Monday – Friday, 8:00 a.m. to 12:30 p.m. & 1:30 p.m. to 5:00 p.m.

Internatinal Center for Conciliation and Arbitration AMCHAM (Centro Internacional Conciliación y Arbitraje Cámara Costarricense Norteamericana de Comercio / CICA-AMCHAM)

Authorized since: 26 October 1998
Renewed: 23 January 2009, RES N° 002-2009- DINARAC.
Expires: 23 January 2012
Methods ADR: Mediation, Arbitration
Director: Mariana Constanza Solís Díaz
Telephone: 2220-2200, 2296-0696
Web Site: http://www.cica.co.cr/
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: Sabana Norte del ICE 100 Norte y 200 Este, San José.
Office Hours: Monday – Friday, 8:00 a.m. to 12:00 p.m. & 1:00 p.m. to 4:30 p.m.

Fees:

Centro Resolución de Conflictos Ministerio de Trabajo

Authorized since: 28 August 2000
Renewed: 14 January 2008 RES N° 001-2008 DINARAC.
Expires: 14 January 2011
Methods ADR: Mediation
Director: Álvaro Coto Muñoz, MBA
Telephone: 2256-2798
Web Site: http://www.mtss.go.cr/informacion%20general/Cartera%20de%20servicios/Direccion%20General%20de%20asuntos%20laborales.htm
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: Calle Primera, avenida Quinta, antiguo Edificio Numar, Ministerio de Trabajo, quinto piso, San José.
Office Hours: Monday – Friday, 7:00 a.m. to 3:00 p.m.

Fees: None

Latin American Center for Business Arbitration / Centro Latinoamericano de Arbitraje Empresarial. CLAE

Authorized since: 7 January 2002 - RES N° 009-2005 DNRAC.
Renewed: 26 June 2008, RES N° 010-2008- DINARAC.
Expires: 26 June 2011
Methods ADR: Arbitration
Director: Carlos Manavella Caballero, Msc
Telephone: 253-2545, 2253-0728
Web Site: http://www.uci.ac.cr/especiales/clae.asp
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Address: Sabana Norte del ICE 100 Norte y 200 Este, San José.
Office Hours: Monday – Friday, 8:00 a.m. to 12:00 p.m. & 1:00 p.m. to 4:30 p.m.

Fees:

Procedure When It Happens

Either the parties go directly to arbitration or they go to conciliation first and then arbitration. This depends on the contract clause. Conciliation is non-binding. A mediator looks at the contract, hears the versions of each party and tries to suggest a fair solution based on his or her experience. If the parties agree then they proceed to fix the matter directly.

If conciliation does not work, then the parties go to arbitration. There may be a single arbitrator, or a panel. Each resolution center has established procedures for arbitration. The arbitrator(s) act as judges, and make a decision that is as binding as a judicial decision, known as the arbitral award. The award may take several forms:

1. A sum of money (conventional damages)

2. There may be a declaration by the arbitrator

3. The arbitration tribunal may order a party to do something, or to stop doing something. It may order the specific performance of a contract. Or it may order a rectification, setting aside or cancellation of a deed or other document.

How to avoid it / Enforcement

According to the the Board of Architects and Engineers, there are several common reasons that cases are brought to the center for conflict resolution: disputes over the interpretation of the contract, progress in the construction, issues with the construction plans and issues with payment.  The center, http://www.cfia.cr/crc.htm, recommends that in case of a dispute it is important to try to come to an agreement in the conciliation phase of the alternative dispute resolution process, which will save time and money for all parties.

If the case does go before an arbitration tribunal, then the decision of the tribunal is readily enforced.  Under Costa Rican law the decision of the tribunal must  be complied with in a timely fashion.  If one party does not comply, the decision may be presented before the appropriate civil or judicial authorities to enforce compliance with the decision.