This article was featured in Jus Mundi‘s 2024 Arbitration Year in Review, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.
THE AUTHORS:
Maria Lilian Franco, Of Counsel at Aguilar Castillo Love
Romar Tahay, Director at ECIJA Quetzaltenango Office
This article provides an overview of the arbitration highlights in Guatemala in 2024. It considers the evolution of investment arbitration, court decisions that may impact arbitration of corporate and infrastructure disputes, developments of arbitral institutions and events that took place during the year.
Investment Arbitrations Against Guatemala
In 2024, there were no new investment arbitration cases registered against Guatemala, with the total number of pending cases remaining at three at the International Centre for Settlement of Investment Disputes (“ICSID”).
- Energía y Renovación v. Guatemala. This case involves a dispute between Energia y Renovación Holding, S.A., an energy investor and the Republic of Guatemala. The investor alleges breaches of treaty obligation by Guatemala under the Central America-Panama Free Trade Agreement (“FTA”) (2002). The claimant alleged indirect expropriation, fair and equitable treatment, full protection and security, national treatment and Most Favoured Nation (“MFN”) treatment. Last year the tribunal held the hearings and both parties submitted their statements on cost in June 2024, marking a procedural milestone as the arbitration progressed toward its resolution.
- Kappes v. Guatemala. This arbitration involves claims filed by Daniel W. Kappes and Kappes, Cassiday & Associates against the Republic of Guatemala. The claim arises out of Guatemalan courts’ suspension of Exmingua’s mining licences for the “El Tambor” project and the company’s right to export minerals, related to amparo actions for alleged failure to conduct consultations with local communities. The investors alleged breaches of treaty obligation by Guatemala under the CAFTA – DR – USA (2004). The claimants alleged the violation of national treatment, MFN treatment, Minimum Standard of Treatment (“MST”) and expropriation. In September 2023 the Tribunal issued its decision on the production, and the case remains in the evidentiary phase.
- GEB v. Guatemala (I). Grupo Energía Bogotá S.A. E.S.P. and its subsidiary initiated claims against the Republic of Guatemala concerning energy infrastructure investments. The investors alleged treaty breaches under the Colombia, El Salvador, Guatemala and Honduras FTA (2007). The claimants alleged indirect expropriation, Fair and Equitable Treatment (“FET”), MFN treatment and the umbrella clause. The latest event in this proceeding is that on November 2024, the claimants filed a reply on the merits.
Although no official investment arbitration cases were initiated, there are two potential disputes that emerged and could lead to formal proceedings. First APM Terminals Management Barcelona, a subsidiary of Maersk Group, concluded a conciliation process with the Guatemalan government regarding its construction and operation project at Port Quetzal. Also, the mining company Mayaniquel S.A., owned by Swiss-based international Metal Supply Holding, filed a notice of intent to initiate arbitration against Guatemala in June 2024. The company claims the suspension of a license in a mining project.
Legislative and Jurisprudential Changes
In 2024, Guatemala experienced legislative and jurisprudential changes impacting the local arbitration framework.
- In July 2024, the Constitutional Court of Guatemala, in its judgement Exp. 5985-2025 ruled that some provisions of Article 291 of the Commercial Code were unconstitutional. The judgment issued by the Constitutional Court refers to the presumption of mandatory arbitration in commercial contracts of agency, distribution, and representation. Article 291 presumed arbitration as the default dispute resolution method for these contracts unless explicitly stated otherwise.
- The court ruled that such a presumption violated constitutional rights as it imposed arbitration without the parties’ explicit consent.
- After the judgment, the parties are free to expressly agree whether they wish to resolve disputes related to Article 291 of the Commercial Code in arbitration or in courts. If they do not do so, it can no longer be presumed that they must resort to arbitration.
- The Congress of Guatemala enacted the Priority Road Infrastructure Law, a new regulation aimed at ensuring the efficient development and maintenance of the country’s road network, with special attention to critical sections for commerce and the transportation of goods. The law provides that the disputes arising out of the performance, interpretation, application and effects of contracts entered into under the law may be solved by arbitration. The applicable laws must be those of the Republic of Guatemala, the arbitration must be of law, and it must take place in Guatemala and be conducted in Spanish.
Events and Arbitration Conferences
International Arbitration Conference in Guatemala
In 2024, Guatemala hosted a variety of significant events and conferences across multiple sectors.
In 2024, the first International Arbitration Conference in Guatemala (“CIAG”), titled: “Challenging the Conventional: Redefining the Future of Arbitration”, was held under the auspices of the Guatemalan Chapter of the Spanish and Ibero-American Arbitration Club (“CEIA”), the Arbitration and Conciliation Center of the Chamber of Commerce of Guatemala (“CENAC”), and the Chamber of Commerce of Guatemala, in the historic city of Antigua Guatemala.
The conference was distinguishable by its robust attendance and the participation of eminent national and international speakers who addressed pivotal issues in the field of International Arbitration. These included the development of case theory, the appointment of arbitrators, technical and financial expert testimony, the interplay between arbitrators and the judiciary, and the specialized fields of Construction and Energy Arbitration.
Guatemala Very Young Arbitration Practitioners (“GTVYAP”) had a significant role in the event by organizing two preparatory panels for the conference. The first one, titled: “Arbitration Careers”, explored professional development within the arbitration field, while the second one, titled: “A 360-Degree View of Arbitration”, provided a comprehensive overview of key procedural and substantive aspects.
Other Events and Conferences
The year 2024 also featured numerous conferences and events organized by leading arbitration institutions in Guatemala. Notable topics included topics such as: “Effective Conflict Management in International Arbitration”; and, reflecting recent jurisprudential developments, topics such as: “Resolution of Disputes Arising from Agency, Representation, and Distribution Contracts in Guatemala: Analysis of Article 291 of the Guatemalan Commercial Code.”
Additionally, GTVYAP convened a series of roundtable discussions with arbitrators and corporate legal directors from both national and multinational entities, focusing on the drafting of arbitration clauses, strategic defense considerations, effective communication with legal teams, and best practices for negotiating settlements prior to the issuance of arbitral awards.
Developments in Arbitral Institutions
Publication of CRECIG Arbitration Awards in Jus Mundi
In September 2024, the Dispute Settlement Commission of the Chamber of Industry of Guatemala (“CRECIG”), in collaboration with Jus Mundi, announced an initiative to disseminate non-confidential arbitration materials and awards. This initiative aims to enhance transparency and accessibility in arbitration proceedings, thereby fostering greater confidence in the arbitral process.
Symmetria Project by the Arbitration and Conciliation Center of the Chamber of Commerce of Guatemala
During the inaugural edition of the CIAG, the Arbitration and Conciliation Center of the Chamber of Commerce of Guatemala (“CENAC”) unveiled the “Symmetria Project”. This initiative is designed to provide controlled access to the statistical data generated by the center with strict confidentiality protocols.
The project entails the systematic compilation of data from institutional arbitration cases, the preparation of comprehensive reports containing key statistics, and the presentation of such findings in international forums. The objective is to integrate international transparency standards into both national and cross-border arbitration processes, thereby positioning Guatemala as a pioneer in Central America in the dissemination of arbitration-related data.
Developments in Mediation and Intellectual Property
Establishment of the Mediation Center of the Intellectual Property Registry of Guatemala
In 2024, the Intellectual Property Registry of Guatemala inaugurated its own Mediation Center, a specialized forum for the resolution of disputes concerning copyright and related intellectual property matters. This development underscores Guatemala’s commitment to enhancing the protection and enforcement of intellectual property rights.
The establishment of this center was achieved with the technical support and oversight of the World Intellectual Property Organization (WIPO), reflecting Guatemala’s adherence to international best practices in the fields of Intellectual Property and Dispute Resolution.
ABOUT THE AUTHORS
Margaux Vandewalle is an associate at Asafo & Co., where she represents African governments and state-owned entities in high-stakes cross-border disputes across a wide range of sectors. She also advises African governments on complex legal and strategic aspects of maritime boundary delimitation. Margaux is a graduate of Université Paris I Panthéon-Sorbonne, Université Paris II Panthéon-Assasand Georgetown University Law Center (LL.M.). She is admitted in Paris and New York.
Karim Zein is a member of the New York and Paris bars and an international arbitration Associate at Simmons & Simmons (Paris office). His practice focuses on international commercial and investment arbitration. Karim also lectures in International Commercial and Trade Law at Université Panthéon-Assas. He is a graduate of Harvard Law School, Université Panthéon-Assas and Université Saint-Joseph de Beyrouth.
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