Kevin Tuininga, International Commercial Arbitration in Cuba

• Publication year: 2008

INTERNATIONAL COMMERCIAL ARBITRATION IN CUBA

Kevin Tuininga^*

INTRODUCTION .............................................................................................. 572

I. EL PASADO: CUBA'S ACFT ................................................................. 574

A. Formation and Jurisdiction ........................................................ 577

B. ACFT Conciliation ..................................................................... 578

C. Governing Law ........................................................................... 578

D. Party Nationality ........................................................................ 579

E. Procedures and Referees ............................................................ 582

F. Awards ........................................................................................ 583

G. Performance ............................................................................... 584

II. EL PRESENTE: THE NEW CCICA ........................................................ 588

A. Referees ...................................................................................... 589

B. Jurisdiction ................................................................................. 590

C. Procedure ................................................................................... 593

D. Governing Law ........................................................................... 595

E. Location of Proceedings ............................................................. 596

F. Judicial Assistance ..................................................................... 596

G. Awards ........................................................................................ 597

H. Administrative Provisions .......................................................... 600

I. Regulations ................................................................................. 601

1. Additional Procedural Provisions ........................................ 602

2. The Hearing .......................................................................... 608

3. The Award ............................................................................ 609

4. Mediation Services ............................................................... 610

5. Referees, Mediators, and Ethics Codes ................................ 613

6. Fees ...................................................................................... 615

III. EL FUTURO: FROM HERE TO WHERE? ................................................ 617

A. Improvements Over the ACFT .................................................... 620

B. Fee Comparison ......................................................................... 621

CONCLUSION .................................................................................................. 622

COMPARATIVE TABLE .................................................................................... 625

INTRODUCTION

International commercial arbitration in Cuba is poised to become a great deal more important for American investors. The increase in importance of commercial dispute resolution forums stems from hints of growing support for an adjustment in the policy of the United States toward Cuba.¹In fact, proximate change in the political clime seems inevitable as its proponents in effect seek to bypass provisions of the Helms-Burton Act²by pressing change, even if Raúl Castro survives politically and extends socialism.³Whatever the motivating force of the political momentum, American investors are sure to stoke its progress and exploit movement.

Enticing those investors are several lucrative opportunities. The United States Geological Survey estimates that 9 billion barrels of oil and approximately 21 trillion cubic feet of natural gas lie under the Gulf of Mexico in Cuban waters.⁴Cuba is also home to one of the world's largest reserves of nickel and cobalt.⁵Moreover, Raúl Castro has begun to ease agricultural regulation on the island by allowing private farmers to grow crops on fallow state land to increase production.⁶Some speculate that he may be inclined to open Cuba's agriculture industry to foreign investment, as has been done with some other areas of its economy.⁷Even without eased restrictions, grain exports to Cuba from the United States totaled $400 million in 2007 and are expected to double in 2008.⁸Finally, Cuba's tourism industry receives over 2 million visitors annually despite the absence of American tourists, who are barred from visiting the island.⁹Once travel restrictions on tourists from the United State ease, investors will covet opportunities for significant profit margins in resorts and other tourism-related enterprises.

Understandably, the expected swell in internationally-related commercial activity will lead to an increase in international commercial disputes. Unfortunately, even an optimistic assessment of Cuba's court system suggests that it will struggle mightily to meet the burdens that opening markets will sooner than later impose on it.¹⁰But the same cannot be said for Cuba's system of international commercial arbitration, which will also play an important role in accommodating the effects of expanded investment.¹¹This Article includes an overview and assessment of Cuba's international commercial arbitration institution, which the Cuban government established in

1965 with the Corte de Arbitraje de Comercio Exterior [Arbitration Court of Foreign Trade].¹²The Arbitration Court of Foreign Trade (ACFT) has worked to resolve many international commercial disputes and has built a reputation for doing so in an affordable, impartial, and prompt manner.¹³

In July 2007, Cuba's socialist government replaced the ACFT with the Corte Cubana de Arbitraje Comercial Internacional [Cuban Court of International Commercial Arbitration].¹⁴In the wake of the Cuban Court of International Commercial Arbitration's (CCICA) formation, this Article compares the ACFT's operation and governing law with the provisions of Decreto-Ley No. 250 [Law No. 250] and its accompanying regulations, which govern the operation of the CCICA. It also compares the provisions of the CCICA with other well-known arbitration rules, particularly the United Nations Commission on International Trade Law (UNCITRAL) Arbitration

Rules of 1976 and 1985 and those of the International Chamber of Commerce

(ICC).¹⁵

I. EL PASADO: CUBA'S ACFT

According to the president of Cuba's Chamber of Commerce (Chamber), Raúl Becerra Egaña, the evolution of Cuba's commercial arbitration system began with the fall of Cuba's socialist allies and the increase in commercial disputes Cuba faced due to the urgency of procuring new markets.¹⁶For years prior to that, the ACFT primarily served as a permanent forum for resolving disputes between the socialist nations that comprised the Council for Mutual Economic Assistance.¹⁷Since then, the ACFT has been a valuable forum for resolving foreign investment disputes. One of the guarantees of Cuba's foreign investment laws since 1982 has been the right to negotiate freely for the resolution of differences in national courts, in an international arbitration court, or under ad hoc arbitration rules.¹⁸

As a general matter, observers have tended to ascribe to Cuba a distrust of or an aversion to arbitration and mediation, a characterization commonly made of Spain and other Latin American countries.¹⁹However, as the new president of the CCICA points out, Cuba is not a novice in the field of arbitration.²⁰In step with other socialist countries, Cuba established a system of state or administrative arbitration in 1977 as an alternative to litigation in commercial disputes between state-run enterprises.²¹In addition, Cuba was one of the first Latin American nations to ratify the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, on March 30, 1975.²²Even earlier, Cuba ratified and acceded to the European Convention on International Commercial Arbitration on September 1, 1965 (European Convention).²³Cuba is also a signatory to the Convention on the Settlement by Arbitration of Civil Law Disputes Resulting from Relations of Economic and Scientific-Technical Cooperation, which entered into force on August 13, 1973, binding nine then-socialist-leaning countries.²⁴

Against this record of timely acceptance of international arbitral conventions and arbitration experience, at least one researcher outside of Cuba suggests that the ACFT became "a respected part of the international arbitration world" and "a robust, sophisticated arbitral organization, with arbitrators thoroughly trained in international commercial law and dispute resolution, who participate[d] extensively in international arbitration organizations."²⁵Agreeing with the observations of this researcher, Julio C.

Fernández de Cossío, during his time as ACFT president, praised the ACFT by noting its success in international commercial arbitration despite the tight economic and financial blockade of the last 40 years.²⁶Fernández de Cossío further asserted that the ACFT's corps of arbitrators enjoyed prestige nationally and internationally for its first-rate professionalism.²⁷

In fact, another ACFT president, Olga Maria Miranda Bravo, served as a member of the ICC Court of Arbitration in Paris.²⁸At the CCICA's inaugural ceremony, Chamber President Becerra credited the formation of the CCICA to the work of Miranda Bravo, now deceased, whom Becerra referred to as a prestigious Cuban jurist and the "manager, principal driving force, [and] protagonist of this legislative downpour that places Cuban arbitration in the vanguard."²⁹Other ACFT referees have worked with the World Intellectual Property Organization (WIPO) in resolving disputes.³⁰In addition, the ACFT has reportedly presided over international commercial disputes where both parties to the dispute were non-Cuban.³¹The Japanese Commercial Arbitration...