All controversies of private nature may be settled by arbitration. As a matter of fact, section 110 of the Honduran Constitution grants the right to submit civil and commercial matters to arbitration. As a result, a third impartial person (arbitrator) will decide the issue with a binding character upon the parties. The final decision (named Laudo in Spanish) has the standing of res judicata in the same extent of a final judicial ruling.
Traditionally, arbitration takes place when the parties agree to it at the time of contracting or at the time the conflict arises. However, from the year 2011 and onwards, legislative reforms allow for arbitration by virtue of Law without the express consent of the parties (forced arbitration).
In particular, the Law for the Promotion and Protection of Investments, the Law of Representatives, Distributors and Agents of Nacional and Foreign Companies and the Organic Law of Zones of Economic and Social Development (ZEDE in Spanish) provide that controversies must or may be solved by arbitration even if there no agreement to arbitrate in the following cases:
a) Disputes among shareholders.
b) Disputas among investors. According to the Law, investors are individuals or corporations that own tangible or intangible assets that are deemed an investment by virtue of the commitment of capital, or by cause of the expectation that such assets will produce a return on investment, or because there is an assumption of risk by the nature of the business.
c) Disputes in matters of intellectual property. The term intellectual property includes two large areas:
- (c1) Author Rights and Related Rights of producers and distributors of intellectual property works, and,
- (c2) Industrial Property that encompasses the issues of trademarks, patents and distinctive rights.
d) Disputes related with representation, agency and distribution contracts.
e) Disputes related with anticompetitive or disloyal commercial practices.
f) Disputes on real estate property.
Our experience in arbitration
Our partners have ample experience in national and international commercial arbitration. Also, we are authors of the only Commentaries to the Honduran Arbitration Law with Jurisprudence and Reference to other norms.
Our experience in this area of practice expands over a decade. Some of the complex cases we have seen recently involve the following (we maintain confidentiality as is required by Law):
Arbitration in insurance matters:
Claim for payment of health insurance coverage by cause of full and permanent disability.
Relating to the construction contract of road section in northern Honduras and claim for the payment of damages.
Agency, Representation and Distribution arbitration:
Resulting from modification of the contractual terms of a distribution contract dating from the 1970’s.
Resolution by an european auto manufacturer of distribution contract with national authorized dealer.
Termination of distribution contract with Honduran Health Ministry and national distributor.
Intellectual Property Arbitration:
The case involved the termination of a franchise agreement with Honduran national distributor, the payment of royalties and retur of manuals and procedures containing know how.
Disloyal competition arbitration:
For sales made by multinational licensor (beverage company) in the exclusive territory of a national licensee.
For contracting a former employee of competitor with extration of confidential information such as margins of sale, key client accounts and business strategy.
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