Are Salvadoran Courts Building an Arbitration-Friendly Seat?

Latin America’s arbitration landscape is often assessed through legislative reform, institutional sophistication, and judicial quality. Yet a more consequential yardstick for an arbitral seat is judicial conduct: how courts respond when asked to enforce an arbitration agreement and how readily they set aside awards.

Four Salvadoran decisions issued between 2025 and 2026 reveal a jurisprudential pattern broadly supportive of arbitration. They concern a pathological clause, due process, expert evidence, and the interaction between annulment and appeal. Together, they suggest that consent to arbitrate should be assessed by reference to party autonomy and expressed intent; arbitral tribunals enjoy substantial autonomy in evidentiary matters; annulment is an extraordinary remedy of limited scope; and judicial remedies should be administered without needlessly undermining arbitral finality.

These signals matter because users assess seats not merely by statutory text, but by the deference courts afford to the allocation of adjudicative authority to arbitration.

Pathological and Multi-Tiered Clauses: How Should the Dilemma Be Resolved?

The clearest expression appears in the Second Civil Chamber of the First Section of the Centre, December 1, 2025, Case No. 4-RNLA-25. The contract contained a defective clause: although its heading referred to arbitration, its operative text required only conciliation before a notary prior to enforcement of contractual penalties. The parties later pursued conciliation before a court and, after no settlement was reached, entered into a standalone arbitration agreement under Article 29 of the Mediation, Conciliation and Arbitration Act of El Salvador. The losing party subsequently sought annulment, alleging to be a defective tribunal constitution and failure to exhaust the pre-arbitral mechanism.

The Chamber distinguished the original clause from the later agreement. The former was neither an arbitration clause nor a multi-tiered arbitration agreement; the latter, however, expressly recorded the parties’ written agreement that the dispute would be finally resolved by arbitration. That subsequent agreement—not the ambiguous contractual provision—was therefore the binding source of arbitral jurisdiction.

The Chamber accordingly rejected the annulment challenge. It held that the tribunal had properly examined its jurisdiction under Kompetenz-Kompetenz and that consent had to be assessed by reference to the parties’ expressed intent and procedural conduct rather than through a rigid reading of defective drafting. It also noted that the challenging party had procedural means to contest the subsequent agreement but had not used them. The decision thus protects genuine consent without giving undue weight to a pathological clause.

Annulment Is Not an Appeal in Disguise

In Second Civil Chamber of the First Section of the Centre, April 22, 2025, Case No. 2-RNLA-25, the court adopted a restrictive interpretation of annulment actions. It treated annulment as an extraordinary remedy confined to statutory grounds, not a mechanism for reopening issues already determined by arbitrators.

The first ground alleged a due process violation because time limits had restricted a party’s cross-examination. The Chamber found that the testimony was taken under procedural rules previously fixed by the tribunal, additional time had been granted, and no technological impediment had impaired the examination. Determining whether further questions might have changed the arbitrator’s conviction would have required the court to assess the evidentiary weight of the examination outside an annulment review. Judicial supervision may test whether a party had an effective opportunity to present its case; it may not reconstruct how evidence should have affected the outcome.

The second ground challenged the legal reasoning in the award because the arbitrators had upheld an objection for reasons different from those advanced by the party invoking it. The Chamber distinguished the object of claims and objections, which defines the adjudicative mandate, from the reasoning used to resolve them. Because the arbitration was ex aequo et bono, the tribunal was not bound by every legal proposition advanced by the parties. The relevant test requires correspondence between the relief sought and the matters decided, not a reproduction of the parties’ submissions.

The third ground alleged citra or infra petita because the tribunal had not addressed every argument and item of evidence submitted in response to objections. Again, the Chamber distinguished claims and objections from the arguments supporting them. Once a threshold objection had been upheld, the tribunal was not required to answer every remaining contention independently. Otherwise, disagreement with the breadth or structure of arbitral reasoning could be converted into an annulment ground.

Finally, an omission regarding costs was remedied by an addendum. No defect remained capable of supporting annulment. Across all four grounds, the judgment draws the same line: annulment protects procedural integrity but does not provide appellate review of the merits.

Evidentiary Omission and the Limits of Judicial Review

The same approach appears in Second Civil Chamber of the First Section of the Centre, July 15, 2026, Case No. 1-RNLA-26. The applicant invoked the statutory ground of unjustified refusal to admit evidence duly offered or to take necessary steps for its production. It argued, in substance, that the tribunal had mischaracterized factual testimony as expert evidence, affecting the valuation used to quantify the buy-out payment.

The Chamber sharply delimited the inquiry. Its task was not to determine whether the tribunal had correctly classified the evidence or persuasively assessed it, but whether a genuine evidentiary omission had occurred. The record showed that the disputed testimony had been requested to explain technical valuation issues and that another expert report had been admitted, produced, and weighed. The withdrawal of one expert-evidence request did not alter the legal nature of other evidence already incorporated into the proceedings. The Chamber held that a procedural act’s characterization depends on its content, purpose, and manner of introduction, not merely its label.

There was therefore no improperly rejected evidence, omitted evidentiary steps, or unrequested measures. The applicant’s complaint concerned characterization and weighing. In an arbitration ex aequo et bono, the arbitrators enjoyed broad procedural discretion, subject to the rights to be heard, defense, adversarial process, and equality. Annulment could verify whether evidence was offered, admitted, produced, and open to challenge; it could not reassess probative value. Reweighing evidence under the guise of procedural review would dilute the statutory constraints of annulment and convert supervision into merits review.

Annulment and Appeal: Distinct Remedies, Ordered Review

Salvadoran law still retains an ordinary appeal against awards rendered in law. Article 66-A of the Mediation, Conciliation and Arbitration Act grants such appeals suspensive effect, while Articles 67 and 68 separately regulate annulment. A prior decision—Second Civil Chamber of the First Section of the Centre, March 30, 2023, Case No. 1-APLA-23—mitigated this feature by holding that submission to the ICC Arbitration Rules entails a valid waiver of appeal without affecting annulment. The distinction is clear: appeal opens a de novo review; annulment does not.

That distinction governed the legal discussion in First Administrative Litigation Chamber, July 10, 2026, Case No. 00023-26-ST-CONU-1CAM. Faced with concurrent annulment and appeal proceedings concerning the same award rendered in law, the Chamber rejected consolidation. Annulment was confined to the “numerus clausus” grounds in Article 68 and to the purpose of the challenge brought by the applicant; appeal could address procedural and substantive questions consistent with a de novo review. Although both remedies concerned the same award and parties, the claims lacked the requisite connection for consolidation, and their distinct subject matter meant no real risk of inconsistent decisions.

The Chamber nevertheless held that annulment should be decided first. A successful annulment might deprive the appeal, wholly or partly, of its purpose, particularly if the award was set aside or returned to the tribunal for correction or clarification. The solution preserves the distinct nature of both remedies while giving logical priority to a more limited review. In a system that retains appeal, this sequencing limits unnecessary judicial intervention without blurring the boundaries of annulment.

Conclusion: A Pro-Arbitration Judicial Trend as a Competitive Advantage

These cases reveal more than outcomes favorable to arbitration: a judicial methodology. Salvadoran courts appear to understand that supporting arbitration does not require complete judicial abstention, but intervention for the right reasons, within appropriate procedural boundaries, and without converting judicial review into a révision au fond.

The decisions protect genuine consent despite drafting pitfalls; recognize Kompetenz-Kompetenz; preserve procedural autonomy; confine annulment to its statutory function; resist renewed weighing of evidence; and coordinate parallel remedies without expanding judicial control over the award. Collectively, these features enhance predictability for parties, counsel, and institutions evaluating El Salvador as an arbitral seat.

No set of four decisions can define a jurisdiction’s reputation. Seat selection ultimately depends on accumulated judicial signals. The signals emerging from these cases are increasingly coherent: Salvadoran courts appear to be prepared to enforce the parties’ bargain to arbitrate while maintaining a restrained and measured supervisory role. That is one of the defining attributes of an arbitration-friendly seat.

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The author acted as counsel in the four proceedings discussed in this post. The cases are therefore addressed exclusively from a neutral academic and jurisprudential perspective, consistent with the Kluwer Arbitration Blog’s editorial policy requiring disclosure and neutral treatment where a contributor has been involved in the underlying matter.