2025 in Review: Commercial Arbitration Highlights in Latin America

In 2025, commercial arbitration in Latin America reached a turning point, shaped by uneven economic recovery, increased political division, and ongoing discussions about the legitimacy of the judiciary.

Following regional growth of approximately 2.4%, reflecting a more cautiously optimistic outlook driven by easing inflationary pressures, projections for 2026 point to growth of approximately 2.3%, suggesting that Latin America is likely to remain on a path of low economic dynamism. Within this macroeconomic landscape, arbitration has increasingly emerged, not merely as an alternative dispute resolution mechanism, but as a structural pillar of legal certainty for cross-border commerce and investment.

In a nutshell, Chile reaffirmed itself as a jurisdiction of continuity and judicial restraint, where courts have strengthened enforcement and annulment standards without legislative disruption. Mexico, by contrast, experienced a moment of institutional tension, in which ambitious judicial reforms simultaneously elevated arbitration’s strategic value and exposed its dependence on effective judicial support. Brazil consolidated its position as a mature arbitration venue through institutional innovation and consistent pro-enforcement jurisprudence. Peru moved in the opposite direction, embracing regulatory intervention under the banner of transparency, while provoking debate over administrative overreach and practical effects of the regulations enacted. Finally, Paraguay pursued modernization through legislative reform, signaling openness to arbitration as part of a broader pro-investment agenda, yet leaving critical questions to be resolved by future judicial practice.

In addition to domestic legal and institutional developments across the region, 2025–26 witnessed a dramatic escalation in geopolitical risk with the United States’ military and economic actions in Venezuela following the ouster and capture of President Nicolás Maduro in early January 2026. These events have not only intensified diplomatic tensions but have also reverberated through global energy markets, with U.S. energy equities and oil prices reacting to the heightened uncertainty. Given Latin America’s centrality to global energy supply and capital flows, this uptick in geopolitical friction is likely to spur a new wave of commercial and investment treaty arbitrations tied to energy contracts, asset expropriation claims, and state conduct that materially affects contractual performance.

This article examines legislative and institutional developments, key judicial decisions, doctrinal and thematic trends, and major conferences, while situating these developments within the broader political and economic context of 2025 and offering forward-looking observations for 2026.

Legislative and Institutional Developments

Paraguay: Reforming the Arbitration Act

Paraguay advanced efforts to modernize its Arbitration Act, seeking closer alignment with international standards. On March 18, 2025, the Office of the Paraguayan Presidency’s Legal Counsel submitted a draft proposal to modernize Law No. 1879/2002, the Paraguayan Arbitration Act (the “Project”), to the Paraguayan Arbitration and Mediation Center following a recent trend observed in other jurisdictions amending their arbitration legislation, including France, the United Kingdom, and Germany.

As examined in detail here, the proposed reforms aim to increase procedural efficiency and institutional credibility. The Project aims to revise 19 existing articles and add 12 new provisions, targeting significant matters including the structure of arbitration agreements, involvement of non-signatories, the requirement for ordinary courts to mandate arbitration, interim relief, as well as protocols for the annulment, recognition, and enforcement of both domestic and international awards.

Nevertheless, unresolved ambiguities—particularly regarding the rules governing recognition, enforcement, and annulment of arbitral awards—remain a point of concern and may shape judicial interpretation in the coming years should the Project be enacted.

Mexico: Judicial Reform Remains Contingent

Mexico’s arbitration environment in 2025 remained closely intertwined with the effects of the sweeping judicial reform enacted in September 2024. As analysed here, the restructuring of judicial appointment mechanisms and oversight bodies has raised persistent concerns regarding judicial independence and technical expertise.

One of the principal concerns is that the administration of justice may be materially affected as career judges are to be replaced by judges elected by popular vote through general elections.

In this context, arbitration has increasingly emerged as a perceived safe harbor for commercial actors seeking neutrality and predictability. However, the effectiveness of arbitration in Mexico remains contingent upon sustained judicial cooperation at the enforcement stage, particularly in relation to interim measures and the recognition of awards, an issue likely to remain central in 2026.

Brazil: Procedural Innovation on Early Production of Evidence

Brazil once again stood at the forefront of arbitration-related institutional developments in 2025. Building on prior reforms, Brazilian arbitration institutions and courts continued refining procedural tools aimed at increasing efficiency while preserving due process guarantees.

One of the most discussed developments was the early production of evidence in arbitration. After the Brazilian Superior Court held that arbitrators—not courts—shall hear requests for early production of evidence in non-urgent claims covered by an arbitration agreement, several leading arbitration institutions introduced new rules on the matter.

As examined here, the Centre for Arbitration and Mediation of the Brazil Canada Chamber of Commerce announced the approval of its new regulation on the early production of evidence. This regulation reflects consolidated jurisprudence of Brazilian courts, particularly the Brazilian Superior Court (see here).

These initiatives reflect Brazil’s institutions broader effort to adapt arbitration to increasingly complex commercial disputes, particularly those involving long-term contracts, sophisticated evidentiary issues, and multiparty structure.

Peru: Regulation and the Tension Between Transparency and Flexibility

Peru’s arbitration landscape continued to adjust to the mandatory registration regime for arbitrators and arbitration centers introduced in prior years. As explored here, in September 2024, the government modified the Peruvian Arbitration Law through Legislative Decree No. 1660, extending the obligation to register with the National Registry of Arbitrators and Arbitration Centers (“RENACE”) to arbitrators and centers involved in all arbitrations seated in Peru, including purely private disputes.

By 2025, the market awaited the RENACE to clarify registration requirements. On August 21, 2025, the Supreme Decree No. 016-2025-JUS, issued the RENACE regulations. While the regulations reiterate that registration is mandatory, they do not impose express sanctions for non-registration. Nevertheless, concerns persist that challenges may be raised against arbitrators who are not registered, potentially discouraging foreign arbitrators from accepting appointments in Peru-seated arbitrations.

Judicial Perspectives

Chilean Courts: Dismissal of Application to Set Aside International Awards on Grounds of Extra petita and Ultra petita

Chilean courts continued to articulate an arbitration-friendly approach in 2025. As reported here, on 18 August 2025, the Santiago Court of Appeals rendered its judgment rejecting Profine’s challenge to an arbitral award. In particular, the Court resorted to the principle of minimum intervention to dismiss applications to set aside international awards on grounds of extra petita and ultra petita. According to that Court, annulment of international awards is extraordinary, and subject to the strict and exhaustive grounds laid down in article 34(2) of the  Law No. 19,971 on International Commercial Arbitration, which mirrors article 34(2) of the Model Law.

Brazilian Courts: Consolidation of a Pro-arbitration Reputation

Brazilian courts further consolidated their pro-arbitration reputation in 2025. As reported here, the São Paulo Court of Appeals reaffirmed respect for the arbitral seat and declined to exercise jurisdiction beyond its proper scope. The Court determined that party autonomy does not override the authority of courts at the seat to annul an award, nor does it circumvent the exclusive jurisdiction of the Superior Court of Justice in matters regarding foreign awards during recognition proceedings.

Also, the Brazilian Superior Court of Justice continued to reinforce Brazil’s alignment with the New York Convention. The Court reaffirmed its pro-enforcement stance toward foreign arbitral awards by granting recognition to two awards rendered in the United Kingdom under the auspices of the Chartered Institute of Arbitrators (as detailed here). First, the Court held that the validity of service must be assessed under the applicable arbitration law and contractual rules, rather than Brazilian procedural standards. Second, it confirmed that recognition proceedings are limited to formal requirements and are not the appropriate forum to revisit the merits of the award or the validity of the arbitration agreement. Finally, the Court rejected arguments that high legal costs violated due process, reaffirming that financial hardship alone does not amount to a denial of justice.

Accordingly, the decisions reaffirm the limited scope of the Brazilian Superior Court of Justice jurisdiction in recognition proceedings, which is restricted to the formal requirements provided in Art. 963 of the Brazilian Civil Procedure Code (BCPC) and Arts. 38 and 39 of the Brazilian Arbitral Act (BAA).

Peru: Red Flags and Enforcement

Judicial scrutiny of arbitral awards intensified in Peru. On September 10, 2025, the Superior Court of Justice of Lima recognized and enforced the Partial Award in CAIP Case No. 3286 (Paris-seated), which was rendered in the long-running dispute between the Municipalidad Metropolitana de Lima and Lima Expresa S.A.C. (here and here).

As examined in recent judicial analysis (here), the decision is noteworthy not merely for its outcome, but for the Court’s articulation of “red flags” and preliminary indicia of corruption as part of the recognition inquiry. The Court reaffirmed that recognition proceedings are non-contentious in nature and subject to a narrowly circumscribed review, declining to revisit the tribunal’s assessment of evidence or to re-litigate the merits through allegations of lack of motivation or administrative illegality.

Of particular significance was the Court’s treatment of corruption allegations based on materials drawn from ongoing criminal investigations. Aligning with the arbitral tribunal’s reasoning, the Court distinguished between preliminary indicia emerging from unadvanced or pre-indictment proceedings and evidentiary indicia capable of establishing illegality, emphasizing both causation and the exceptional nature of public policy review.

While the decision does not require a criminal conviction as a prerequisite for arbitral findings of corruption, it implicitly validates a cautious approach toward relying on stalled prosecutorial investigations. The reasoning leaves room for future arguments that judicial confirmation of illegality is required to displace the presumption of award validity under the New York Convention. How Peruvian courts calibrate this tension between arbitral autonomy and domestic public policy is likely to remain a focal point in 2026.

Doctrinal Developments and Conferences

Doctrinal discussions in 2025 focused heavily on procedural efficiency, evidence management, and the interaction between mining activities and arbitration.

Brazilian scholarship on the early production of evidence continued to gain regional traction. This issue was examined in depth in a recent contribution which analyzed the substantive standards governing requests for early production of evidence, the applicable legal requirements, and the allocation of costs in such proceedings (as detailed here).

At a broader regional level, commercial pressures arising from critical minerals and supply chain disruptions became focal points of doctrinal and practical debates. As explored in the article “From Mines to Courts: The Litigation Impact of Critical Minerals and Supply Chain Disruptions” (here), the strategic importance of minerals essential to the energy transition has generated a new wave of disputes spanning joint ventures, offtake agreements, and state-linked regulatory measures. The analysis highlighted arbitration’s central role in managing these disputes, particularly in light of their cross-border nature, geopolitical sensitivity, and technical complexity. It also emphasized the growing convergence between commercial arbitration and investment-style arguments, as parties increasingly invoke stabilization clauses, force majeure, hardship, and public policy defenses in disputes tied to supply chain volatility.

Conferences held throughout 2025 reinforced these doctrinal trends. Major events in Brazil, including the CBAr International Arbitration Conference (see here, here, and here), the CAM-CCBC Arbitration Congress (see here and here) and the CAM-AmCham Arbitration Congress (see here), devoted significant attention to integrity in arbitration, the use of artificial intelligence, expert evidence, and the evolving expectations placed on arbitrators and counsel. Collectively, these discussions reflected a maturing arbitral culture in Brazil increasingly focused on legitimacy, transparency, and procedural adaptability.

Conclusion

In 2025, Latin American commercial arbitration demonstrated resilience amid political uncertainty and economic headwinds. Courts largely respected arbitral autonomy, institutions pursued pragmatic innovation, and doctrinal debates matured.

Looking ahead to 2026, increased reliance on arbitration is expected. At the same time, the growing intersection between geopolitical risk and dispute resolution is poised to play a more prominent role in shaping the region’s arbitration landscape. The escalation of U.S.–Venezuelan tensions and their spillover effects onto Venezuela’s energy sector illustrate how state conduct can rapidly translate into cross-border disputes involving infrastructure, licensing, and sovereign risk. As parties increasingly confront arbitrations arising from sanctions regimes, project disruptions, and energy contract performance, practitioners and policymakers alike will need to assess how geopolitical flashpoints recalibrate legal obligations under commercial and investment frameworks.