Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Ecuador

Hernán Pérez Loose

I. Sources of private international law

1. Major legislation

Under art 425 of the Ecuadorian Constitution (Constitución de la República, published in Official Register No 449, 29 October 2008, henceforth EcCR), treaties and international conventions prevail over domestic legislation. The formal withdrawal from treaties needs to follow the procedures laid down in both the treaties and the EcCR. Ecuador is party to a number of bilateral and multilateral conventions concerning private international law, which have played an important role not only in the establishment, but also to the modernization of its private international law rules.

The most important source of Ecuadorian private international law is the treaty Code on Private International Law, known as the ‘Sánchez de Bustamante Code’ (Código Sánchez de Bustamante, Bustamante Code on Private International Law of 20 February 1928, OAS, Law and Treaty Series, No 34, henceforth Bustamante Code), a multilateral convention signed in Havana in 1928 and ratified by 14 other Latin American countries. Although the Bustamante Code covers a wide range of issues, from family relations to the enforcement of foreign judgments, and although few would dispute that at the time when it was adopted the Bustamante Code constituted a significant step forward in the field of private international law, today its provisions are of limited effectiveness. By allowing the State Parties considerable leeway to deviate from its rules, the Bustamante Code failed to establish uniformity among its members. Moreover, despite its universalistic tone, its provisions bear a strong territorial influence (see Jürgen Samtleben, Derecho Internacional Privado en América Latina, Teoría y Páctica del Código Bustamante, vol 1, Parte p. 1General (Depalma 1983). For a recent analysis of the Bustamante Code and Latin American private international law, see Naiara Posenato, Autonomia della volontá e scelta della legge applicabile ai contratti nei sistema giuridici latino-americani (Wolters Kluwer Italia 2010) pp 65–77). Despite these shortcomings, the Bustamante Code is an unquestionable normative source of Ecuadorian private international law. Some courts in Ecuador have invoked its authority and even applied its rules to cases involving nationals of non-ratifying states such as the USA.

As the economic interdependence and development of Latin American nations grew during the 1970s, the Organization of American States (OAS) sponsored the adoption of several regional conventions dealing with various areas of private international law. These regional conventions were drafted with an eye to the modern developments of private international law taking place in Europe and elsewhere. They took note of the growing need for both certainty and flexibility in international trade, as well as the importance of harmonization in a region which, despite the common heritage of its countries, was politically fragmented.

Instead of engaging the nations of the region in the formulation of an overly comprehensive single treaty dealing with the full range of private international law issues, the OAS launched negotiations for the adoption of a series of treaties, each one dealing with a particular private international law issue. Ecuador has ratified 11 of these treaties and is also a party to a number of treaties on private international law of global membership.

2. Domestic sources

As to the domestic sources, Ecuador lacks a single body of norms devoted to issues of private international law. Instead, various private international law rules are found dispersed across several legislative statutes. Many of them are found in the Civil Code (Código Civil ecuatoriano, latest recodification published in Official Register Supplement No 46, 24 June 2005, henceforth EcCC), the most important source of Ecuadorian private law, enacted in 1861. In particular, the EcCC contains general rules applicable to conflicts involving family relations, personal capacity, real estate property and the formalities for the enforcement in Ecuador of documents executed in foreign countries. Other sections of the EcCC include certain rules applicable to matrimony, divorce and succession. On 12 May 2015, Ecuador’s National Assembly approved a new procedural code, the Organic General Code of Procedures (Código Orgánico General de Procesos, henceforth COGP). The COGP has replaced the old Code of Civil Procedure (Código de Procedimiento Civil, latest recodification published in Official Register Supplement, 12 July 2005, henceforth CPC) The COGP contains provisions dealing with the service of complaints in foreign nations and the enforcement of foreign judgments. The scope of these provisions will be discussed below.

3. Institutional sources

Ecuador is a member of the Andean Community (Comunidad Andina, henceforth AnCom), which is based on a regional integration treaty that also includes →Colombia, →Peru and Bolivia. The treaty empowers an international body, the Commission, to enact regulations in areas that are deemed necessary for the integration of its members. Many of these regulations, particularly those in the field of economic relations, are sources of Ecuador’s private international law to the extent that they may affect international private situations. In the field of intellectual property, for instance, the AnCom has been significantly successful in developing a common legal regime.

4. Case-law and academic doctrine

As Ecuador is a nation in the civil law tradition, rulings of the highest court, the National Court of Justice, have limited effect in the interpretation and application of statutes and regulations. However, its opinions as well as the rulings of the Constitutional Court are highly persuasive. This is especially true in the field of private international law where relevant jurisprudence is scarce.

In Ecuador scholarly writings (‘doctrina’) have traditionally played an important role in the development of legal institutions. Unfortunately the contribution of doctrina in the field of private international law has been rather limited. The writings of Colombian and Chilean scholars on private international law enjoy considerable authority in Ecuador, since Colombia and Chile are not only members of the Bustamante Code, but also their Civil Codes are virtually identical to that in p. 1force in Ecuador, all originating from the code drafted in 1855 for the Republic of Chile by the renowned Venezuelan jurist Andrés Bello.

II. International judicial competence

Despite the dispersion and lack of a coherent body of norms dealing exclusively with international judicial competence, it is possible to discern certain principles and rules from the various normative sources.

1. General forums

a) Forum selected by the parties (derogatio fori)

Under art 318 Bustamante Code, the court competent to hear a civil or commercial dispute is the one which the parties have agreed upon either expressly or impliedly. As a rule of an international nature, this provision is expected to prevail over any domestic rule that may contradict it. However, for years acceptance of this rule in Ecuador faced serious obstacles.

In the first place, the rule clashed with an ambiguous EcCC provision that declared submission to a jurisdiction not recognized by Ecuadorian laws as an act with an ‘unlawful object’ (→Choice of forum and submission to jurisdiction). According to art 1505 of the 1970 EcCC edition, an ‘illicit object exists in anything that contradicts Ecuadorian Public Law’. Thus, the promise to be subject to a jurisdiction not recognized by Ecuadorian laws is invalid on account of its illicit object. An identical text was found in art 1447 of the original edition of the EcCC (1861). The interpretation this provision received by the courts was that submission to jurisdictions other than that of the Ecuadorian tribunals was invalid and accordingly unenforceable (see for example Judicial Gazette Year LXXIV, Series XI, No 8, p 1064; Judicial Gazette Year LXXVI, Series XII, No 11, p 2253; Judicial Gazette Year LXXVII, Series XII, No 13, p 2905).

Second, the rule clashed with a constitutional tradition that prohibited foreigners from submitting their disputes to jurisdictions and laws other than those of the host state. Since the 1929 Constitution this prohibition had been found in successive Ecuadorian constitutions. The rule echoed the legal teachings of the Argentinean jurist Carlos Calvo during the first decades of the last century (see Pedro Roffe, ‘Calvo y su vigencia en América Latina’ UNCTAD Reprint Series No 53 (1984)).

The combination of these two rules, one rooted in private law and the other in constitutional law, created hostile ground for acceptance of art 318 Bustamante Code by courts and scholars alike. In fact, the Bustamante Code provision was largely ignored by courts and practitioners. A declaration by the EcCC that submission to a foreign jurisdiction was an illicit act was enough to prevent its application regardless of the different hierarchical position of the two provisions, one international and the other domestic. As with other issues, the EcCC’s position with respect to foreign jurisdiction conforms to the strong territorialist tradition that inspired it.

However, in recent decades these two obstacles have been weakened by various factors. The first step came in 1976 when the military government then ruling Ecuador promulgated Decree-Law, No 797-B interpreting the text of art 1505 EcCC (see Official Register No 193, 15 October 1976, Registro Oficial, henceforth RO). Under this Decree-Law, the EcCC provision declaring submission to a foreign jurisdiction as illicit must be understood to apply only when the agreement to submit to a foreign jurisdiction is executed within the Ecuadorian territory. As a result, when the agreement to submit to a foreign jurisdiction is executed outside Ecuador’s territory the act is valid. Parties to such agreements signed outside Ecuador are bound by their choice of jurisdiction even if the effects of the underlying contract are felt in Ecuador. The promulgation of this Decree-Law was motivated by the concern of foreign lenders. They saw in art 1505 a potential source of uncertainty for their agreements with the state, since these agreements frequently contained clauses selecting a foreign jurisdiction to settle their disputes.

The interpretation given by the Ecuadorian government to art 1505 EcCC was obviously an immediate solution for a particular situation. In fact, the official interpretation of the EcCC produced no significant shift in the legal discourse that continued to see submission to a foreign jurisdiction as an option that at a minimum was plagued with uncertainty. Nonetheless, the step taken in 1976 was symptomatic of the fact that the entrenched territorial tradition of the Ecuadorian legal system was ill-suited to the international economic scene in which the country was becoming an active participant.

A second and more drastic step was taken when a new arbitration law was passed in 1997 (Arbitration and Mediation Law, Ley de p. 1Arbitraje y Mediación, RO No 145, 4 September 1997, henceforth LAM). In one of the final sections of the bill, Congress introduced an article expressly repealing the statement of art 1505 declaring submission to a jurisdiction other than the Ecuadorian courts as illicit. Congress gave no explanation for its decision, nor did it replace the eliminated sentence of the EcCC with an express provision recognizing submission to a foreign jurisdiction as a valid option in Ecuador.

Nonetheless, the decision of Congress was significant by virtue of the pervasive effect of art 1505 EcCC in the development of Ecuadorian private international law. It is not surprising that the elimination of this anti-foreign jurisdiction provision appeared in the text of the new arbitration law. If the rule of art 1505 had not been removed from the EcCC, it would have affected the implementation of international arbitration, a procedure to which the new law devoted an entire chapter. The 1997 legislative step was one of the few instances where a stipulation of the EcCC was repealed by legislative action, a rare step in a country that views its civil code with considerable reverence.

(1) Case-law

In 2000 the Supreme Court took up the issue of →party autonomy in resolving conflicts. In a case involving breach of an international contract, the Court ruled that after the 1997 reform of the EcCC, submission to a foreign jurisdiction was a valid option in Ecuador (RO No 109, 29 June 2000, Supreme Court of Justice – First Civil and Mercantile Chamber, Teresa García Franco v Societá Italiana per Condotte D’Acqua Spa, Judgment No 217). The Court added that the 1997 reform has also made it possible to enter into agreements whereby the parties select a foreign law as the substantive law of their contract. Moreover, the Court acknowledged the possibility that the law applicable to the contract may not necessarily be the law of the court selected by the parties to hear their disputes. In other words, the effect of the 1997 reform of the EcCC had aligned Ecuador with the modern developments of private international law. The case arose in a dispute between an Ecuadorian, Ms Teresa García, who had entered into an agreement in Rome with two Italian corporations. The agreement called for Ms García to provide her professional services in Bolivia where the Italian corporations were running a business. Although the parties did not regulate in the contract the issues of jurisdiction and applicable law, the court took the opportunity to spell out what was the state of the law on these issues after the 1997 reform of the EcCC. The Court made no reference in its analysis to the Bustamante Code rules, perhaps because Italy, the home of the two defendants, is not party to that treaty. Instead, the Court emphasized the important effects of the 1997 reform. For the Court, the binding effect of clauses submitting contractual disputes to a foreign jurisdiction was rooted in the principle of contractual autonomy or freedom of contract.

In 2005 a lower court considering a case where the parties had submitted their disputes to a foreign jurisdiction reached a similar conclusion. The case involved an Ecuadorian distributor and a Californian supplier of wines. The contract, signed by the parties in Guayaquil and California, respectively, included a clause selecting the court of Modesto, California, as the competent court to hear any controversy (unpublished, Trial No 470-D-04, Andina Licores S A v E & J Gallo Winery, Second Civil Judgeship, Guayaquil). Following a dispute between the parties the distributor filed suit for →damages before a court sitting in Guayaquil, Ecuador. The court dismissed the complaint, holding that after the 1997 reform of the EcCC, contract clauses where the parties agree to submit their disputes to a foreign court were enforceable. It directed the plaintiff to commence its action before the California court. The court also rejected the plaintiff’s contention that the clause was void in that the contract was signed when the provision that declared such clauses as illicit was still in force in Ecuador.

(2) The Calvo doctrine

With regard to the constitutional rule barring the state from submitting its disputes to foreign jurisdictions, the rule has also been undermined in the past decades. From the 1979 Constitution to that adopted in 1998, and then to the EcCR adopted in 2008, the Calvo doctrine has virtually disappeared from the constitutional landscape of Ecuador. The first step was taken in 1979 when the Constitution of that year adopted in its text the interpretation given by the government to art 1505 EcCC. In fact, art 16 of the 1979 Constitution stated ‘[t]‌he waiver of the right to any diplomatic complaint will be implicit in contracts entered into by the State with foreign natural or juridical persons; if such contracts are signed within the territory of Ecuador, they p. 1shall not be subject to an alien jurisdiction’. In stating this, the drafters of the new constitution enshrined what had hitherto been a simple legislative interpretation of art 1505 EcCC.

The second step occurred in 1995 when Congress introduced several amendments to the 1979 Constitution. One amendment carved out an exception to the rule under discussion so that the state would be permitted to submit its disputes with foreign investors even if the submission is signed within the country, on condition it was done under the umbrella of an international treaty (RO No 863 of 16 January 1996). This exception to the Calvo rule was necessary as Ecuador became party to several bilateral investment treaties, which normally grant the foreign investor the right to bring its grievances against the host state to an international arbitral tribunal. The 1997 amendment was included in the new Constitution of 1998.

Ten years later an elected Constituent Assembly decided to remove entirely the Calvo doctrine from the text of the new Constitution, the EcCR. In one of its articles dealing with the status of foreign investors, the EcCR provides that by merely investing in Ecuador it is assumed that foreigners have renounced their right to seek diplomatic protection. No reference was made to the jurisdictional aspect of the Calvo doctrine that prevents the state from submitting its disputes with foreigners to foreign tribunals.

A more significant step was taken in 2010, when the National Assembly passed the Organic Code for Planning and Finances (Código Orgánico de Planificación y Finanzas, henceforth COPF), a statute devoted to regulating the structure and process of the national budget and public spending (RO, Supplement No 306, 22 October 2010). The fifth of the General Provisions of that statute provides that, with the approval of the Attorney General, the state and public sector entities may agree to submit to ‘other jurisdictions and legislation … the settlement of controversies and divergences related to contracts signed … with governments, or foreign public and private entities’. This provision has allowed the government to enter into contracts with foreign parties where they agree to submit their disputes to foreign tribunals.

By adopting this new provision, the National Assembly undermined the traditional rationale of the old art 1505. As noted before, the EcCC used to declare submission to a foreign jurisdiction as illicit because, in its view, such submission was contrary to ‘Ecuadorian Public Law’. There is no doubt that the COPF is a statute that fits comfortably within the category of ‘Public Law’ according to the Ecuadorian legal tradition. The enactment of this public law provision will impede in the future any ruling like that rendered in 2007 by one of the chambers of the Supreme Court where, in a highly criticized decision made by interim magistrates, the chamber ignored the 2000 decision in a dispute involving a commercial contract (RO No 624, 1 June 2009, National Court of Justice – Third Civil and Mercantile Chamber, Lamiformi C Ltda. v Maersk del Ecuador S.A., sentence no 322–2007). If a public entity may submit its contractual dispute to a foreign jurisdiction, then there is no justification for preventing private parties from acting similarly. Also, it must be noted that the 1997 LAM contains specific provisions recognizing the validity of international arbitration clauses when parties to such agreements are public entities.

In sum, unlike other countries in the region that have come to accept submission of commercial and civil disputes to foreign tribunals through a clearly defined policy, Ecuador appears to have reached the same result but in a piecemeal fashion, that is to say as the outcome of a series of steps adopted at differing levels, pace and timing.

b) Tacit submission (prorrogatio fori)

According to art 322 Bustamante Code, a party may voluntarily submit to the competence of a court by filing their complaint with it and, in the case of a defendant, by conducting itself in a way which does not challenge the forum selected by a plaintiff.

c) The defendant forum

Absent party agreement on a forum for settlement of their disputes, art 323 Bustamante Code adopts the general rule that the competent court to hear the dispute is that of the defendant’s domicile, or failing that, the defendant’s residence (→Domicile, habitual residence and establishment).

d) Alternative forum

According to art 323 Bustamante Code, in cases involving personal actions, an alternative forum to the forum of the defendant’s domicile is the forum of the place where the obligations have to be performed.

2. p. 1Special forums (fori specialis)

a) In rem actions

Under art 318 Bustamante Code, Ecuadorian courts have exclusive competence to hear in rem actions affecting immovable or real property located in Ecuador. Parties cannot derogate from this forum by express or implied submission to a different forum. Whether Ecuador will recognize a voluntary submission in this kind of action in light of its ratification of several international arbitral conventions will depend on the issue of the applicable law as is discussed below (see below, section III). With regard to movable or personal property (→Property and proprietary rights), the Bustamante Code (arts 324 and 325) provides that the proper forum is the one where the goods are located, and if the location cannot be determined, the forum of the defendant will suffice.

b) Inheritance proceedings

Under art 327 Bustamante Code, Ecuadorian judges will have exclusive jurisdiction to conduct inheritance proceedings when the deceased’s last domicile was in Ecuador.

c) Bankruptcy proceeding

According to art 328 Bustamante Code, when a bankruptcy proceeding is initiated by the debtor himself the competent forum will the court of his domicile. And, according to art 329, if the proceeding has been initiated by the creditors then the court that is hearing the action against the debtor will also be competent to entertain the bankruptcy proceeding.

d) Acts of voluntary jurisdiction

According to arts 330 and 331 Bustamante Code, for acts of voluntary jurisdiction the competent judge will be the judge of the petitioner’s domicile, or the judge where the principal obligation is to be performed.

III. Applicable law

1. Persons

a) Nationality

The Bustamante Code leaves it to each Member State to establish the regime applicable to →nationality. Ecuadorian rules on nationality are established in its Constitution. According to arts 7 and 8 EcCR, Ecuadorian citizens include: (i) persons born within the Ecuadorian territory, which includes the Galapagos Archipelago, (ii) persons born abroad when one or both of the parents are Ecuadorian by birth, and their descendants up to the third degree of consanguinity, (iii) persons belonging to the communities, towns and nationalities recognized by Ecuador which are located in the border zones, or (iv) persons who have acquired Ecuadorian nationality. Ecuadorian nationality will not be forfeited by virtue of →marriage or its termination, or by the acquisition of a new nationality. Article 43 EcCC declares that there is no difference between Ecuadorian nationals and foreigners with regard to the acquisition and enjoyment of the civil rights established in the country.

b) Capacity

According to art 14 EcCC, Ecuadorians, even if domiciled or residing in a foreign country, are bound by Ecuadorian law in matters relating to their status as persons. They are also bound by Ecuadorian laws regarding their capacity to execute certain acts, to the extent that the effects of such acts take place in Ecuador. Therefore, Ecuadorian rules on capacity do not apply to Ecuadorians who enter into agreements in third countries when the effects of such agreement are not felt in Ecuador.

Under the rules set by the EcCC, persons above the age of 18 are considered to have legal capacity for the acquisition of rights and obligations of a civil or commercial nature. Individuals above the age of 18 who lack the ability to administer their own affairs due to dementia or habitual drunkenness, for example, need to have a guardian appointed by the court. The Ecuadorian Labour Code (Código del Trabajo, latest recodification published in Official Register Supplement No 167, 16 December 2005, henceforth LC) recognizes the right of individuals who are 15 to 18 years old to enter into labour contracts as long as their parents grant their consent.

c) Domicile

Article 22 Bustamante Code leaves it to the ‘territorial laws’ of each Member State to define the concept, acquisition, and forfeiture of both general and special domiciles. Article 45 EcCC defines domicile as the residence of a person in a place with the actual or presumed intention to remain there. Ecuador has ratified the Inter-American Domicile Convention (Inter-American Convention of 8 May 1979 on Domicile of Natural Persons in Private p. 1International Law, 1439 UNTS 44). In the case of juridical persons, their domicile is determined by the place of their incorporation. Under Ecuadorian private international law, domicile is an essential connecting factor for the regulation of certain international private situations.

d) Family and succession

According to art 14(2) EcCC, Ecuadorians, even if domiciled or resident abroad, are bound by the laws of Ecuador concerning the rights and duties arising out of their family relations but only with regard to an Ecuadorian spouse or relatives. Ecuador is one of the few Latin American countries that has ratified the UNIDROIT Convention of 26 October 1973 Providing a Uniform Law on the Form of an International Will (available at <www.unidroit.org/instruments/succession>, ratification published in Official Register Supplement No 153, 25 November 2005). Article 1067 EcCC recognizes the validity of a will executed in a foreign country in accordance with the laws of that nation.

e) Matrimony

Under the EcCR, married spouses are equal in their rights and obligations before the law. According to art 91 EcCC, if a →marriage is celebrated in a foreign nation in accordance with the laws of that nation or the laws of Ecuador, that matrimony will produce in Ecuador the same effects as if it had taken place in Ecuador. However, if the matrimony has been declared a nullity by the competent authority of the nation where it took place, that declaration of nullity will produce its effects also in Ecuador. If an Ecuadorian is married abroad in breach of Ecuadorian laws, such breach will produce in Ecuador the same effects as if it has occurred within Ecuadorian territory. Common law marriage is recognized by the EcCR.

Article 139 EcCC provides that if the law of the place of the marriage establishes that, as a result of marriage, a separation of assets between the spouses takes place, then that separation will be recognized in Ecuador, even though the general rule in Ecuador is that there is a community of property between spouses. In this case, the Ecuadorian authorities will have to analyze the law of the country where the marriage was celebrated.

f) Divorce

Under art 92 EcCC, the possibility of dissolving a →marriage abroad and of that dissolution having effects in Ecuador is limited, in that the marriage can only be considered as dissolved if the dissolution is possible under Ecuadorian law. Similarly, under art 93 EcCC, a marriage can only be dissolved in Ecuador in accordance with Ecuadorian law, no matter where the marriage took place. It is also important to note that under art 129 EcCC, a marriage that was celebrated in Ecuador can only be annulled or dissolved by an Ecuadorian judge.

g) Paternity and child support

The Bustamante Code contains a number of articles devoted to the law applicable to paternity, but it distinguishes between legitimate and illegitimate children. However, this distinction no longer exists in Ecuadorian law, and the EcCR establishes (art 69(6)) that all children will have the same rights without regard to paternity background. Thus, and in light of the fact that constitutional provisions are international public order provisions according to the Bustamante Code (art 4), many of the Bustamante Code rules that distinguish between legitimate and illegitimate children are arguably no longer applicable, and if they are, the rule applicable to legitimate children should be applied. Some noteworthy Bustamante Code rules regarding paternity include that establishing that investigation of paternity or its prohibition will be governed by the territorial law (art 63), that declaring that rules granting child support rights to children are of international public order (art 59) and that establishing that the child’s national law will apply with respect to conditions for establishing recognition, the obligation to recognize a child, the actions available for recognition, grant or denial of a family name, and causes for nullity (art 64). The →succession of a parent or of a child is governed by the national law of the deceased party (arts 57, 58 and 65). Ecuador is a party to a number of international conventions designed to protect children, in particular when they are found in international situations.

h) Adoption

The Bustamante Code (arts 73 to 77) addresses the law applicable to →adoption. The capacity to adopt and to be adopted is regulated by the national law of each of the parties. The law of the adopting party regulates the effects of adoption on succession, and the law of the adopted party regulates their family name, the p. 1rights they may be able to keep with respect to the birth family, and their succession. Laws that regulate child support and which establish special formalities regarding adoption are considered of international public order. Further, Ecuador is a signatory to the Hague Convention of 29 May 1993 on Protection of Children and Cooperation in Respect of Inter-Country Adoption (32 ILM 1134) and therefore recognizes the validity of adoptions carried out in accordance with that Convention.

2. Obligations

a) Autonomy of the parties

The Bustamante Code has no provision accepting →party autonomy to select the law applicable to their contracts. It has been argued that acceptance of this principle may be inferred from some articles of the Bustamante Code found in the chapter on contracts and obligations, including art 136 which adopts the principle of contract sanctity; or even from the simple fact that the Bustamante Code does not expressly reject the power of the parties to submit their contract to a particular law (María Mercedes Albornoz, ‘El derecho aplicable a los contratos internacionales en los estados del Mercosur’ (May–August 2009) 125 Boletín Mexicano de Derecho Comparado XLII). While these solutions may have some appeal, they fall short of providing the degree of certainty required by international economic operators. Moreover, the proposition that conflict autonomy can be explained as part of the general principle of contractual autonomy or freedom of contract – a solution that was endorsed in a 2000 ruling of the Supreme Court and followed by some commentators – is an approach that should be adopted with a degree of care.

As the issue of jurisdiction to settle international contract disputes has been traditionally – and wrongly – assumed in Ecuador to be part of the issue of the applicable law, the tensions that plagued the former have inevitably affected the latter. The 2000 ruling already commented on (see above, section II.1.a)) played a fortuitous role in clarifying many of the issues associated with this. According to the Court, the 1997 reform of art 1505 EcCC not only freed submission to foreign jurisdiction from its invalidity consequence, but also had the effect of allowing parties to an international contract to select the applicable law to their contractual relation. For the Court, parties will be bound by their selection of both jurisdiction and substantive law by virtue of the principle of contract autonomy. After emphasizing the general classification of laws as procedural and substantive (→Substance and procedure), the Court stated: ‘In accordance with the principle of autonomy of the will of private contract law, which is recognized by the majority of countries, and found in art 1588 of the Civil Code, in a contract with international elements the parties may subject themselves to the laws of a determined country and at the same time to certain judges and tribunals, and they may also subject themselves only to the legislative competence (laws), or if they wish, they may subject themselves only to the judicial competence (jurisdiction)’.

As will be clear from the above discussion, the freedom to select the applicable law to international private contracts came to exist in Ecuador by default rather than design. It resulted from a legislative reform that removed what was considered to be an insurmountable obstacle, rather than from adoption of an express legal provision allowing parties to international contracts to choose the jurisdiction and the laws of their preference.

As discussed already (see above, section II.1.a)), it is in the sphere of public contracts where Ecuador has adopted a more defined position on this question. The demise of the jurisdictional dimension of the Calvo doctrine as a result of the EcCR, and the passing of the COPF by the National Assembly empowering public entities to conclude contracts containing a foreign law selection clause, are highly significant decisions. The principle that subjects the conduct of public entities to the existence of a prior legislative statute (‘legality principle’) may explain the more explicit path adopted in the sphere of public contracts on the issue of applicable law than that observed in private contracts. Without a provision such as that found in the COPF, public officials may have been reluctant to enter into agreements with →choice of law clauses.

b) Applicable law in the absence of an agreement

On the issue of the law applicable to international contracts absent a formal agreement by the parties, the Bustamante Code offers no clear guidance. Most of the rules found in the section devoted to the applicable law of →contractual obligations provide for application of territorial laws for a variety of issues. Thus, territorial laws will determine the definition and classification p. 1of obligations (art 164), the clauses and agreements prohibited by the law (art 175), mistake, duress and fraud (art 177), the object of the contract (art 178), illicit consideration (art 179) and termination (art 182). However, on the issue of which law may be applicable to the contract in the event that the parties fail to select one, the Bustamante Code provides no clear answer. One possible solution may be to apply art 323 by analogy, whereby, absent a formal agreement between the contracting parties, competence to hear their disputes is granted to the courts of the place where the obligation is to be performed.

A clearer answer, at least from an Ecuadorian private international law perspective, is found in the 2000 ruling to which we have been referring (see above, sections II.1.a) and III.2.a)). The dispute in that case arose out of a contract which lacked a choice-of-law clause. The contract was entered into in Rome by two Italian →companies and an Ecuadorian citizen who resided in Italy. The agreement called for the Ecuadorian party to perform certain services in Bolivia. Following its analysis of the state of Ecuadorian law on the issue of international contracts after the 1997 reform of the EcCC, the National Court ruled that, because the obligations assumed in Rome had to be performed in Bolivia, then it was the Bolivian legal system with which the contract was more closely connected. Therefore, the Court concluded that it was for the Bolivian courts to settle the contractual disputes between the parties and not the Ecuadorian courts. It was the first time that an Ecuadorian court adopted the ‘connecting factors’ type of analysis to adjudicate an international dispute. It is noteworthy that in reaching its decision, the Court did not rely on the Bustamante Code or any other statutory source of Ecuadorian private international law. Instead, the Court invoked the authority of art 4(1) Rome Convention (Rome Convention on the law applicable to contractual obligations (consolidated version), [1998] OJ C 27/34; →Rome Convention and Rome I Regulation (contractual obligations)). In part, the Court adopted this approach because the plaintiff had argued for the application of art 4(2) Rome Convention in order to secure the jurisdiction of Ecuadorian courts, an argument that was rejected by the Court.

3. Property (lex loci rei sitae)

On the issue of property, Ecuadorian private international law follows the traditional lex loci rei sitae rule. According to art 105 Bustamante Code, movable and immovable goods are subject to the law of their location. Under art 115 the territorial law will apply for the purpose of distinguishing between movable and immovable goods. The law applicable to credit instruments will be the law where payment is due, and if this cannot be determined, then the applicable law will be the law of the debtor’s domicile (art 106).

The EcCC contains the key provisions of private international law on the issue of property law. Article 15 provides that the goods ‘located in Ecuador are subject to Ecuadorian laws even if their proprietors are foreigners or reside in another nation’. It then adds that this provision ‘does not limit the right of the owner of such goods to enter into valid agreements in a foreign nation’. However, the article provides that when the effects of the contract performance is to take place in Ecuador, then the contract is subject to Ecuadorian law.

IV. Enforcement of foreign judicial and arbitral decisions

1. Procedural acts

The Bustamante Code contains provisions (arts 382–7) on the issue of international letters rogatory. It sets forth the general principle that any judicial decision that one state needs to enforce in another state will be carried out through a letter rogatory sent from the first state to the other by diplomatic channels. The Inter-American Letters Rogatory Convention (Inter-American Convention of 30 January 1975 on Letters Rogatory, 1438 UNTS 283), which Ecuador ratified in 1975, has a more comprehensive set of rules on this issue. The Convention covers the use of letters rogatory for the enforcement of procedural decisions of a merely formal nature such as service of process, the taking of evidence and the obtaining of information abroad. The Convention excludes from its scope the enforcement of compulsory acts issued by public officials. Ecuador has also ratified the Inter-American Preventive Measures Convention (Inter-American Convention of 8 May 1979 on Execution of Preventive Measures, OAS, Treaty Series, No 52).

On the issue of evidence, Ecuador also ratified the Inter-American Taking of Evidence Abroad Convention (Inter-American Convention of 30 January 1975 on the Taking p. 1of Evidence Abroad, 1438 UNTS 385). The types of evidence accepted by Ecuadorian procedural law are judicial confession, public and private documents, judicial inspections, witness testimony, and expert and translator reports (→Evidence, procurement of). For the particular issue of proving foreign law, Ecuador is party to the Inter-American Foreign Law Convention (Inter-American Convention of 8 May 1979 on Proof of and Information on Foreign Law, 1439 UNTS 111). According to art 162 COGP, a party to a proceeding that based its rights on a foreign law must submit an authenticated copy of the law at any time during the proceedings.

Article 144 of the Organic Code of the Judicial Power (Código Orgánico de la Función Judicial, published in Official Register No 544, 9 March 2009, henceforth COFJ) directs Ecuadorian judges to comply with letters rogatory issued by foreign judges for the purpose of carrying out service of process, notifications and other purely procedural measures in Ecuador. Article 201 COGP recognizes the validity of judicial procedures carried out in a foreign nation when they meet the requirements of the laws of that nation.

According to art 16 EcCC, ‘the form of public deeds (documentos públicos) is determined by the law of the place where they have been executed’. The form of this kind of deed refers to the ‘external solemnities’, while the ‘authenticity’ refers to the fact that the deed was actually executed and authorized by the persons that are mentioned in such an instrument.

However, in cases where Ecuadorian laws require the existence of a ‘public deed’ as evidence to be introduced in order to produce effects in Ecuador, ‘private deeds’ will not be accepted as substitutes no matter what authority such private deeds may have in the place where they were executed.

2. International defences

According to art 394 Bustamante Code, a defendant in international litigation may allege as a defence a pending suit before the courts of another country when the ruling that may be issued in one of the proceedings will produce in the other the effect of res judicata. Article 167 COFJ allows plaintiffs to elect between filing the complaint in Ecuador or abroad, with the exception of situations that must be settled exclusively by Ecuadorian judges. Further, the article stipulates that the complaint may be filed with a court in Ecuador only if the complaint is dismissed in the foreign court on the ground of lack of territorial competence.

Under art 396 Bustamante Code the res judicata defence may be presented as long as the same parties actually participated in the proceeding that led to the judgment that is invoked, and none of them challenged the tribunal’s competence.

3. Recognition and enforcement of foreign judgments

Under art 104 COGP, Ecuador will enforce a foreign judgment if it does not contravene its public law or any other statute, if it has been issued in accordance with international conventions, and if proof is given that the defendant was lawfully summoned and that basic due process was ensured. In the absence of a treaty, the judgment will be enforced, provided that in addition the judgment has res judicata effects according to the laws of the country where it was issued, and it adjudicates a personal action.

Invoking these provisions of the CPC, the National Court enforced in 1975 a judgment issued by a New York court granting the custody of a minor to his mother. The Ecuadorian defendant, who had taken the child to Ecuador in violation of the New York judgment, was ordered by the Ecuadorian court to release him and comply with the New York decision. ((January–April 1976) Judicial Gazette Series XII, No 10 Second Chamber, pp 2052–5).

In 2011 the COFJ introduced a special procedure for the recognition and enforcement of foreign judgments. According to its art 143, the chamber of the provincial appeals court sitting in the jurisdiction of the defendant’s domicile will be competent to recognize foreign judgments, and the enforcement of foreign judgments will be effected by one of the first instance judges of the defendant’s domicile (→Domicile, habitual residence and establishment). Ecuador has ratified the 1979 Inter-American Foreign Judgments and Arbitral Awards Convention (Inter-American Convention of 8 May 1979 on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, 1439 UNTS 91).

4. Enforcement of international arbitral awards

Ecuador was one of the few Latin American countries to sign the 1958 New York Convention, which it ratified in 1961 (New York Convention p. 1of 10 June 1958 on the recognition and enforcement of foreign arbitral awards, 330 UNTS 3). The country is also a party to the Inter-American Arbitration Convention (Inter-American Convention of 30 January 1975 on International Commercial Arbitration, 1438 UNTS 249).

The National Court confirmed in 1975 the enforcement of a New York award issued against an Ecuadorian merchant. The controversy arose out of a sales contract of Ecuadorian cocoa, which included an arbitration clause under the laws of New York. The enforcement was carried out within the framework of the 1958 New York Convention. (National Court of Justice – First Civil Chamber, 27 June 1972 The General Cocoa Company Inc. v José Jorge Arévalo, Trial No 320).

Previously, according to arts 42 and 32 LAM, a foreign international award would be recognized in Ecuador as if it were a domestic decision of last instance, and would be enforced in the same way as domestic judgments are enforced within the country. Applying these rules, a judge of first instance of Guayaquil enforced an ICC arbitral award issued in Florida in 2011 (Eighth Civil Judgeship, Trial No 469–2009). However, the COPG repealed the relevant section of art 42 of the LAM and created a mechanism of ‘homologation’ of foreign arbitral awards in art 104 that puts them on the same footing with foreign judgments.

In July 2009 Ecuador formally withdrew from the ICSID Convention (International Convention on the Settlement of Investment Disputes between States and Nationals of other States of 18 March 1965, 575 UNTS 159). From 2009 to 2010 the Constitutional Court ruled as unconstitutional the arbitration provisions found in a series of bilateral investment treaties that Ecuador had signed during the 1980s. The Court found the arbitration provisions of the investment treaties were in breach of the EcCR.

Literature

  • Juan Larrea Holguín, Manual de Derecho Internacional Privado Ecuatoriano (6th edn, Corporación de Estudios y Publicaciones 1998);

  • Jürgen Samtleben, Derecho Internacional Privado en América Latina, Teoría y Páctica del Código Bustamante, vol 1, Parte General (Depalma 1983);

  • Carlos Salazar Flor, Derecho Civil Internacional (Editorial Universitaria 1955).