In El Salvador, the Constitution of the Republic has recognized two ways to resolve conflicts:
- The judicial route: in which judges and magistrates appointed by the Supreme Court of Justice exercise the function of judging and issuing a ruling at the end of the process.
- Arbitration: a procedure in which mandatory stages must be exhausted, with the particularity that the authority resolving the dispute is not a judge, but rather one or more third parties, who issue a final decision through a document called an arbitration award, which has the same effect as a court judgment.
I- Reasons for submitting to arbitration
In their day-to-day business, companies often choose arbitration as a way to resolve disputes that may arise in their contracts. This choice is based, among other reasons, on the possibility of obtaining decisions issued by arbitrators with a higher degree of specialization in the matter in dispute, as well as the speed with which disputes are resolved compared to ordinary courts, whose judicial workload causes significant delays in the issuance of judgments on the merits.
Thus, arbitration necessarily requires the willingness of the parties to exclude the jurisdiction of the ordinary courts. However, this autonomy to depart from the ordinary courts is subject to certain limits in the legislation, since, in matters of challenges, it is ultimately the judicial body that has jurisdiction to resolve them.
II- Appeals against the arbitral award
The Mediation, Conciliation, and Arbitration Law provides that the only decision issued by an arbitral tribunal that is subject to appeal is the arbitral award, including the following:
- The appeal for annulment.
- Appeals, which are specifically provided for in Salvadoran legislation. The Second Instance Chambers with jurisdiction in civil or administrative matters are the competent bodies to resolve these appeals.
III- Appeals for annulment
Appeals for annulment are the most regulated means of challenging the validity of an arbitral award in various legislations. In El Salvador, this remedy is also provided for and may be brought against awards rendered in arbitration, whether in law, in equity, or technical arbitration.
Although its filing involves the intervention of the ordinary courts as an exception to the principle of the autonomy of the parties to withdraw from it, its purpose is not to review the merits of the dispute or the substantive assessments made by the arbitral tribunal, but is limited to verifying the formal regularity of the arbitral proceedings and respect for the essential guarantees of due process. Therefore, the judges of the Chambers do not rule on the substantive content of the award, but only on errors or defects affecting the form of the acts, restricting their review to formal aspects.
IV- Appeal
The appeal against an arbitral award was introduced into Salvadoran law through a reform in 2009 and is only available for awards rendered in arbitration proceedings under the law, making El Salvador one of the few countries to provide for such a remedy.
The relevant aspect of this incorporation is that, for its processing, the law expressly refers to the procedure under common law—whether civil or administrative, which means that, unlike the action for annulment, the appeal allows for a review of the merits of the dispute. Consequently, the judgment resolving the appeal may confirm, revoke, or even modify the content of the arbitral award.
The existence of this remedy is a significant exception to the principle of party autonomy, as it introduces the possibility that, through this appeal procedure, the ordinary courts may hear and decide again on the dispute submitted to arbitration, which directly affects the purpose of arbitration as an alternative dispute resolution mechanism.
In this context, it is essential that the parties, when agreeing on the arbitration clause, are duly informed of the consequences of choosing one or the other type of arbitration (in law, in equity or technical), especially concerning the scope of judicial review through the remedies available under the law against the award.