The current state of arbitration in Guatemala

By Juan Antonio Mazariegos Puertas, Alegalis

From the outset, arbitration in Guatemala has suffered from a lack of planning in our constitutional framework. Unlike other areas in which our constitutional drafters might have argued that they had no example to follow, arbitration had already been regulated constitutionally even before we became an independent country. Article 172 of the Constitution of the Federal Republic of Central America expressly recognized the right of parties to a dispute to appoint arbitrators at any stage of the proceedings to hear their disputes, describing that right as “inherent to every person” (National Constituent Assembly of the United Provinces of Central America, 1824/2014, art. 172).

Later, the Constitution of the State of Guatemala of 1825 repeated almost verbatim the provisions of the Constitution of the Federal Republic of Central America, including the rule that arbitral awards were not subject to appeal unless the parties reserved the right to appeal. By 1985, the year our current Constitution was adopted, we can see that any reference to a right to arbitrate disputes had been removed entirely. What had been an inherent right of Central American and Guatemalan citizens was erased from the constitutional text. To be clear, the absence of any reference to arbitration in the 1985 Constitution was not due to a lack of awareness of the mechanism among our constitutional drafters. After all, Article 171 of that Constitution expressly mentions arbitration.

The reality is that, despite drafting a fairly extensive constitution [1], our constitutional drafters did not consider recourse to arbitration an inherent right of Guatemalan citizens. For better or worse, that was their decision, and it would undoubtedly give rise to several of the problems arbitration faces in Guatemala today. By 1985, arbitration was in a particularly difficult position in Guatemala. Although it lacked constitutional recognition, the Code of Civil and Commercial Procedure continued to regulate arbitral proceedings. Worse still, the new Constitution contained a provision that appeared expressly to rule out the possibility of arbitration in the country, granting the courts the power to “adjudicate and enforce their judgments” and reserving judicial authority “exclusively and absolutely” to the Supreme Court of Justice and the other courts (National Constituent Assembly, 1985, art. 203). Logically, if that power belongs solely to the Judicial Branch, an arbitral tribunal cannot hear a dispute and issue a binding decision with “res judicata” effect.

It was not until 2011, in the ruling on partial general unconstitutionality in case file 387-2010, that the Constitutional Court addressed this clear contradiction, albeit indirectly (Constitutional Court, 2011). In the Court’s view, arbitration is merely a “jurisdictional equivalent” that lacks the enforcement power held by the ordinary courts. Later, in its ruling in case file 1316-2012, the Court supplemented that reasoning by invoking the right to freedom of action enjoyed by all Guatemalans, as recognized in Article 5 of the current Constitution (Constitutional Court, 2012).

We must be clear: saying that arbitral proceedings do not violate Article 203 of the Constitution is a fiction. Once an arbitrator can hear a dispute and bring it to an end with res judicata effect, such that no judge or arbitrator can hear the dispute again, the arbitrator is effectively adjudicating it. If the text of Article 203 were directly tested against Guatemala’s Arbitration Law, the result should be a declaration that the country’s entire arbitration framework is unconstitutional. Does that mean the Constitutional Court should abolish arbitration in Guatemala?

The answer is an unequivocal no. Arbitration is an extremely useful tool for easing the burden on any country’s justice system. Our failure to implement it effectively is not arbitration’s fault; it is ours, as its stakeholders [2]. The recitals to the Arbitration Law acknowledge that this avenue was provided to help relieve “the heavy burden on the courts” (Congress of the Republic of Guatemala, 1995), and today our justice system is in the grip of a severe backlog . According to the Rule of Law Index 2023 published by the World Justice Project, Guatemala ranked 141st out of 142 countries on the indicator measuring whether civil justice is free from unreasonable delays; in other words, it was the second-slowest country for resolving disputes (Prensa Libre, 2024). Only Venezuela, a dictatorship, ranked lower; remove it from the ranking, and we would be last. So where is arbitration? Our judicial system clearly needs support and is overwhelmed with cases. If there is ever a time for arbitration to shine, it is now. So how many new arbitrations do Guatemalan arbitral institutions see each year?

This is one of the most uncomfortable questions for arbitration stakeholders in Guatemala. To date, only one arbitral center in the country publishes statistics. Even so, a reasonable estimate would be around 80 to 90 arbitrations a year across all arbitral institutions. It bears repeating: Guatemala, the slowest country in the free world for resolving disputes through the courts, where arbitration should be enjoying its golden age, does not even reach 100 arbitrations a year.

Various professionals attribute the current state of arbitration in Guatemala to several factors. Some say arbitration is simply difficult to scale and that we should therefore favor other alternative dispute resolution methods, such as mediation and conciliation, to ease the burden on the Judicial Branch. Others attribute the low number of arbitrations to the Arbitration Law’s severe restrictions on the matters that may be submitted to arbitration. Finally, some argue that the power of the civil and commercial Chambers of the Courts of Appeal to “modify” arbitral awards through the review remedy (Congress of the Republic of Guatemala, 1995, art. 43) is what is really holding arbitration back.

While none of the circumstances outlined above helps arbitration develop, they are often used as excuses to avoid confronting the real underlying problems. As for arbitration’s scalability as a dispute resolution method, a look at other countries quickly shows that, with sufficient organization, it is possible to reach several hundred thousand arbitrations a year. China is the clearest example. According to that country’s Ministry of Justice , its arbitration commissions received a combined 607,000 cases in 2023 (Supreme People’s Court of the People’s Republic of China, 2024), while the annual commercial arbitration report of the China International Economic and Trade Arbitration Commission (CIETAC)put the figure at 956,000 cases in 2025 (He and Zou, 2026). Recently, China’s Ministry of Justice announced that, since its Arbitration Law came into force in 1995, the country has handled more than 5 million arbitrations (Xinhua, 2025).

As for the second objection, this is undoubtedly the one most grounded in reality. The current wording of the Arbitration Law does affect which cases are arbitrable (Congress of the Republic of Guatemala, 1995, art. 3) and therefore limits the maximum number of cases that can be brought before arbitral tribunals. However, most civil and commercial disputes are already arbitrable. Among the few matters that still cannot be arbitrated are corporate disputes (a position the Constitutional Court has already changed several times; see Constitutional Court, 2014, 2017) and leases. Let’s be frank: how many new arbitrations would there be if these disputes suddenly became arbitrable? Let’s assume, very optimistically, that the number of arbitrations doubled. That would take us from 80 a year to 160. Any court in Guatemala City receives more cases than that in a fortnight. Changing only this aspect is not enough.

Finally, the third issue is the power to review arbitral awards. A few years ago, I worked with some colleagues on a project called “Voces de Justicia”, which involved interviewing judges on the Chambers of the Courts of Appeal to learn their views on arbitration in Guatemala. Part of the questionnaire asked about the judges’ positions on the use of the review remedy against arbitral awards. While several acknowledged that they had handled, or were handling at the time, review applications, few said they had set aside an award in whole or in part, and none reported having modified an arbitral award. Although I agree that the Judicial Branch should not be able to modify arbitral awards, since they reflect the parties’ autonomy, it is not to blame for arbitration’s failure to expand. In my practice, I can say that no colleague or client has ever objected to including an arbitration clause on the grounds that a chamber might eventually modify the award.

If none of these three reasons alone explains the stagnation, we should ask ourselves a more uncomfortable question: what have we done? The Arbitration Law came into force in 1995 (Congress of the Republic of Guatemala, 1995). Since then, arbitration has had more than three decades to take root in Guatemala, yet it has not done so. During that time, we have blamed the law, the Constitutional Court and the Chambers of the Courts of Appeal, and waited for legislative reform or a change in judicial interpretation to come to the rescue.

Perhaps the real underlying problem is precisely that waiting. No outside savior will do for arbitration what we, its own stakeholders, have not done: build users’ confidence, disclose how many cases we handle and how long they take, offer accessible procedures for lower-value disputes, and train arbitrators capable of meeting much greater demand. Guatemalan arbitration began without a plan. It is up to us to plan its future.

[1] By way of comparison, one of the world’s longest constitutions is India’s, with more than 440 articles (Embassy of India in Belgrade, n.d.).

[2] By stakeholders I do not mean state bodies, but those of us in the private sector who have been responsible for fostering the development of this tool.

References

• Constituent Assembly of the State of Guatemala. (2014). Political Constitution of the State of Guatemala of 1825. Miguel de Cervantes Virtual Library. (Original work published in 1825)
• National Constituent Assembly. (1985). Political Constitution of the Republic of Guatemala (amended by Legislative Decree 18-93). Office of the Comptroller General of Accounts.
• National Constituent Assembly of the United Provinces of Central America. (2014). Constitution of the United Provinces of Central America of 1824. Miguel de Cervantes Virtual Library. (Original work published in 1824)
• Congress of the Republic of Guatemala. (1995). Decree No. 67-95: Arbitration Law. Diario de Centro América.
• Constitutional Court. (July 7, 2011). Ruling in case file 387-2010 [Partial general unconstitutionality].
• Constitutional Court. (November 6, 2012). Ruling in case file 1316-2012 [Partial general unconstitutionality].
• Constitutional Court. (December 9, 2014). Ruling in case file 3475-2014 [Appeal of amparo judgment].
• Constitutional Court. (March 23, 2017). Ruling in case file 3348-2016 [Appeal of amparo judgment].
• Embassy of India in Belgrade. (n.d.). Article on Constitution of India. Retrieved October 15, 2026.
• He, X., and Zou, D. (September 17, 2026). 全国仲裁案件标的总额连续三年突破万亿元 [The total value of arbitration cases nationwide has exceeded one trillion yuan for the third consecutive year]. Xinhua.
• Prensa Libre. (April 25, 2024). Guatemala has one of the world’s slowest justice systems.
• Supreme People’s Court of the People’s Republic of China. (September 9, 2024). 累计办理案件500多万件！我国仲裁事业健康快速发展 [More than 5 million cases handled to date: arbitration in our country is developing healthily and rapidly].
• (September 30, 2025). China handles over 5m arbitration cases. China Daily.

Key facts

• Arbitration in Guatemala. Juan Antonio Mazariegos Puertas, of Alegalis, examines the relationship between the effectiveness of arbitral awards and the reservation of judicial authority to the courts under Article 203 of the Constitution.
• Constitutional case law. The article discusses case files 387-2010 and 1316-2012 before the Constitutional Court, which address the nature of arbitration and its relationship to freedom of action.
• Arbitration Law. The author examines which disputes may be submitted to arbitration and the scope of the remedy for review of arbitral awards.
• Proposals. The author proposes publishing figures on the number and duration of cases, making arbitration more accessible for lower-value disputes, and expanding arbitrator training.