This article was featured in Jus Mundi‘s 2025 Arbitration Year in Review, an annual publication analyzing arbitration developments across 40+ jurisdictions on 6 continents. This edition brings together young practitioners and senior experts to capture the year’s most significant legislative reforms, enforcement trends, and institutional innovations.
THE AUTHORS:
Andrés Moreno Gutiérrez, Partner at Moreno Baldivieso
René Claure Veizaga, Partner at Moreno Baldivieso
Pamela Muñoz Alipaz, Senior Associate at Moreno Baldivieso
Bolivia’s arbitration landscape has just closed one of its most dynamic years on record. A systemic shortage of U.S. dollars triggered extraordinary financial disputes that tested the limits of contractual risk allocation and force majeure in a highly specialized banking context. In parallel, arbitral institutions accelerated the adoption of modern dispute board frameworks, signaling a shift toward proactive, project-embedded dispute prevention, even if practical deployment remains incipient.
The courts, for their part, sent an unmistakable signal by recognizing arbitration’s jurisdictional character within the constitutional framework, reinforcing due process and the parties’ right to their chosen “natural judge”. In the background, the hydrocarbons sector may be on the cusp of a contentious cycle, with public claims that could be replicated, raising the specter of an arbitral storm. This year’s developments showcase a system that is becoming more sophisticated and resilient under pressure.
Systemic Dollar Illiquidity and Extraordinary Financial Disputes
The year’s factual backdrop was unmistakable: acute dollar illiquidity, a widening gap between official and parallel exchange rates, and regulatory ceilings on commissions for outbound transfers. These conditions disrupted otherwise routine cross-border payment flows, immediately affecting fiduciary, banking, and commercial arrangements that presupposed dollar availability at predictable cost.
The result was a wave of financial disputes that forced tribunals to define the limits of the parties’ obligations under circumstances of impossibility, and to assess how systemic constraints interact with strict obligations in specialized financial instruments.
The centerpiece of this surge—indeed, the largest and most important commercial arbitration in Bolivia’s history—was a dispute between a bank operating in Bolivia and a logistics company. The tribunal ultimately ordered the bank to transfer U.S. dollars to accounts designated in Bolivia. The award, together with its complementary award, which entered the public domain through their interaction with court proceedings, is notable on several fronts.
Throughout the year, a central theme is the reevaluation of force majeure and impossibility, especially when they stem from a systemic macro-financial disruption rather than a localized event. Bolivia’s arbitration community faced a new category of dispute, unusual both in scale and in the technicalities of banking, fiduciary accounting, and payment systems. Understandably, the collective understanding of force majeure in this niche remains underdeveloped.
From the foregoing, two conclusions stand out:
- First, tribunals appear to be setting a very high threshold—arguably superhuman—for a party to establish that a systemic crisis renders performance impossible. Regulatory friction, elevated costs, or the unavailability of “ideal” channels do not suffice; the inquiry turns on whether any lawful, contract-compatible pathway remained open that would not improperly shift risk.
- Second, even under these high standards, local arbitration has produced partial, workable answers to large-scale issues. Further doctrinal refinement is likely as additional systemic-constraint cases reach tribunals and as parties draft contracts with greater precision regarding currency pathways.
Dispute Boards: Modern Rules Are In, Implementation Is Next
Institutionally, 2025 marked a meaningful step change. Most leading Bolivian arbitration centers such as Centro de Conciliación y Arbitraje de la Cámara de Industria, Comercio, Servicios y Turismo (“CAINICO – CCAC”) in Santa Cruz, CAC in La Paz and ICAM in Cochabamba, have now approved modern dispute board rules, defining their jurisdiction
across contract execution, and specifying the continuum from nonbinding recommendations to decisions with contractual force. Centers complemented the adoption of the Dispute Boards Rules with capacity-building, including workshops and technical sessions with international practitioners focused on real-world design, panel composition, and the operational integration of boards in complex projects, from EPC to PPPs.
This is an authentic modernization. By anchoring dispute boards in up-to- date institutional rules, Bolivia has equipped project owners, contractors, and lenders with a tool specifically designed to prevent conflict escalation, generate real-time guidance, and preserve relationships under pressure. However, the practical curve is still ahead. Large-scale deployments in national projects remain limited; model clauses and procurement templates require greater diffusion; and sector actors must converge on panel rosters and standard operating procedures.
The outlook is cautiously optimistic. A handful of early, well-structured boards—embedded from contract signature, resourced to issue prompt recommendations or decisions, and backed by clear escalation clauses— can demonstrate reduced cycle time, cost deflection, and project delivery continuity. Crucially, arbitration remains in the background as the designated backstop when board outputs are not complied with. In that sense, boards function as an agile, front-loaded filter, with arbitration absorbing only the disputes that truly require it.
Courts and Constitutional Law: Arbitration Recognized as Jurisdiction
A significant development emerged from the judicial-constitutional interface. In publicly available proceedings arising from a constitutional protection action, a constitutional judge in Santa Cruz rejected an attempt to reopen award control through ordinary civil procedure. The court emphasized that the sole avenue for challenging an arbitral award is the annulment action provided under the Arbitration Law—underscoring that Arbitral awards are subject to a distinct, limited review regime.
More importantly, the constitutional judge articulated a jurisdictional understanding of arbitration through the lens of due process and the “natural judge” chosen by the parties. In essence, the court recognized that when parties opt for arbitration, they elect a jurisdiction whose decisions are autonomous within their statutory boundaries. Judicial courts are not a forum of appeal; they are guardians of minimal external control, limited to grounds explicitly set out in the Arbitration Law.
This articulation aligns with comparative best practice and strengthens the predictability that users—especially international investors and lenders—seek in Bolivia’s dispute resolution architecture.
For practitioners, the implications are concrete. Attempts to judicialize arbitral disputes by recasting them as civil actions are unlikely to succeed. The arbitration-judiciary boundary is clearer. And tribunals can proceed with greater confidence that their awards, once rendered, will not face collateral attacks disguised as ordinary suits. That, in turn, enhances the value proposition of local arbitration as a credible forum for both domestic and cross-border disputes.
Hydrocarbons: Public Claims Today, Potential Replication Tomorrow
Hydrocarbons returned to center stage. A notice of dispute publicly attributed to Shell Bolivia Corporation as an international operator, cataloged several measures, mainly related to alleged unpaid receivables. The notification’s details are in the public domain because they were served on State authorities and reported by the press (See, Shell Bolivia Cor- poration launches dispute against Bolivia over alleged illegal measures causing multimillion-dollar damage, ANF — Agencia de Noticias Fides (19 August 2025); Shell ratifies that it submitted a “Notice of Dispute” to the Procuraduría General del Estado, El Deber (20 August 2025); Procurator clarifies that the Bolivian State received a dispute notification from Shell with six months to issue a position, ABI (Agencia Boliviana de Información) (20 August 2025).
This matters: by laying out an articulated theory of breach, the notice provides a template that other operators might adapt if their factual matrices are analogous.
The policy implications are serious. If replicated, such claims could precipitate multiple arbitrations, stretching the State’s dispute management capacity, its inter-agency coordination, and its approach to legacy awards and payment practices involving state-owned entities. The risk is not merely financial. Repeated challenges to the integrity of award treatment, regulatory predictability, or contract performance can erode investor confidence and exacerbate the fiscal and foreign-exchange constraints that have complicated commercial performance.
Early neutral intervention—through dispute boards or targeted expert determinations—can keep disputes from ossifying into arbitration. For both the State and operators, prevention is vastly cheaper than post hoc cure.
Outlook and Practical Takeaways
The past year compressed multiple stress tests into a single cycle. The ongoing economic crisis will undoubtedly trigger a surge of arbitration disputes, particularly in the financial and hydrocarbons sectors. In this context, it is essential for arbitral tribunals to adapt to the increasing complexity and demands of these cases, delivering awards that provide effective and practical solutions.
For transactional lawyers and contract drafters, the message is unmistakable: write for the storm. When obligations are dollar-denominated or hinge on outbound transfers, contracts should specify currency pathways, the allocation of commission and liquidity risks, fallback modalities consistent with sector regulation, and procedures for real-time adjustment under a dispute board. Boilerplate force majeure clauses will not suffice; the standard is rigorous and proof-intensive.
For project owners, contractors, and lenders, the time to implement dispute boards is now. With modern rules in place, pilot boards in infrastructure and PPPs can produce data on time and cost savings and establish a roster of trusted panelists. Aligning procurement and financing documents with board-ready clauses will accelerate uptake and normalize the mechanism as a pre-arbitral filter.
For public authorities and state-owned enterprises, a coherent dispute posture is essential. That means consistent award treatment, timely settlement where liability is clear, and structured dialogue during cooling-off periods to avoid multiplication of claims. In parallel, inter-institutional protocols on payment practices and documentation issuance can defuse friction before it triggers arbitration.
Conclusions
Bolivia’s arbitration year was bracing. It delivered the country’s most consequential commercial award. It advanced institutional modernization by installing dispute boards in the rulebooks and building capacity for their use. It solidified the judicial backstop by recognizing arbitration as a jurisdiction chosen by the parties, protected by due process and limited review. And it flagged real exposure in hydrocarbons, where public claims could replicate and multiply.
The system is not yet at cruising altitude. The jurisprudence around force majeure and systemic crises remains under construction, and some tribunals may indeed be setting exceptionally demanding benchmarks for impossibility. But in a year of stress, local arbitration produced partial, credible answers to large-scale issues. The path forward is clear: sharper drafting around currency risk and performance channels; deeper pre-dis- pute architecture through well-designed dispute boards; and disciplined, predictable court-arbitration interfaces. If institutions, courts, state actors, and market participants align on these pillars, Bolivia can transform a year of strain into a platform for resilient, high-credibility dispute resolution, ready not only to absorb shocks but also to deter them.
ABOUT THE AUTHORS
Andrés Moreno Gutiérrez is a partner at Moreno Baldivieso and leads the firm’s international and domestic arbitration practice. He focuses on complex investment and commercial disputes and has extensive experience in proceedings un- der ICSID, ICC, CIAC, CAINCO, CAC, and ICAM rules. He has represented private investors in some of the most significant cases in the region, including the largest investment arbitration in Bolivia’s history. Andrés is also a member of the ICC Inter- national Court of Arbitration in Paris and is consistently ranked by Chambers & Partners, The Legal 500, Who’s Who Legal, and GAR 100.
René Claure Veizaga is a partner at Moreno Baldivieso with more than 20 years of experience in corporate, insurance, finance, labor, and dispute resolution matters. He regularly acts as counsel in complex national and international arbitrations involving commercial and investment disputes. René has represented clients across industries, including insurance, construction, energy, mining, aviation, and international trade. He is recognized by Chambers & Partners and The Legal 500 and has extensive experience under the rules of leading arbitration institutions, including ICSID, UNCITRAL, and the ICC.
Pamela Muñoz Alipaz is a Senior Associate at Moreno Baldivieso focused on domestic and international arbitration. She has acted as counsel in proceedings under the ICC, UNCITRAL, CAINCO, CAC, and ICAM Rules, representing clients in complex commercial disputes as both claimant and respondent. Her experience also includes court assistance to arbitration and emergency arbitration proceedings. Pamela’s practice covers insurance, construction, corporate, and contractual disputes, and she has been recognized by The Legal 500 in Dispute Reso- lution.
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