Guatemala

In Guatemala, the civil and commercial jurisdiction is organized hierarchically. At the top is the Supreme Court of Justice, whose Civil Chamber hears cassation appeals in commercial disputes that exceed GTQ 400,000.00 (approximately USD 52,240).

At the intermediate level are the Civil and Commercial Chambers of the Court of Appeals, located both in the Department of Guatemala and across the country’s other departments. In several regions, Mixed Chambers operate, which hear matters from all branches of law due to the volume and territorial distribution of cases. The Chambers hear appeals.

Jurisdiction in the first instance lies with the Courts of First Instance in Civil Matters. In Guatemala City these courts are multi-judge (two judges per court), while in each department there is at least one single-judge court. These courts hear cases involving amounts exceeding GTQ 80,000.00 (approximately USD 10,500).

Finally, the Civil Justice of the Peace Courts hear claims involving amounts below GTQ 80,000.00 (approximately USD 10,500) and small-claims proceedings, functioning as the entry point for minor civil and commercial matters.

Commercial litigation in Guatemala is governed primarily by constitutional and statutory rules. The Political Constitution of the Republic establishes fundamental principles and guarantees applicable to all judicial proceedings, including those of a commercial nature, such as the right of defense, due process, and access to justice.

As for the specific procedural framework, the main rules are found in the Law of the Judicial Branch and in the Civil and Commercial Procedural Code, which regulate the processing of civil and commercial actions, jurisdiction, appeals, evidentiary activity, and the functioning of the courts. In addition, the Commercial Code contains specific procedural provisions applicable to disputes arising from commercial acts.

There are also special laws that incorporate particular procedures for certain matters, such as the Law on Banks and Financial Groups, the Law on Secured Transactions, the Leasing Law, and the Insolvency Law, among others, which establish specific rules depending on the nature of the regulated sector.

Before initiating judicial proceedings, Guatemalan legislation allows the adoption of various measures aimed at ensuring the effectiveness of the future judgment. A party may request precautionary measures, such as attachment, receivership, or any other measure appropriate to prevent the claimed right from being frustrated. If such measures are granted, there is an obligation to file the claim within 15 days from the date of their execution.

The law also permits the anticipatory preparation of evidence when it is necessary to secure its availability before filing the action. Possible measures include:

• the statement of the opposing party;
• the production of accounting books;
• the production of documents; and
• other forms of evidence regulated in the Civil and Commercial Procedural Code.

It is also essential to review the contract, credit instrument, or legal transaction giving rise to the claim, in order to determine whether it contains prior conditions or mandatory procedures for bringing an action, such as formal requirements, prior notices, or alternative dispute resolution clauses.

In Guatemala, the most commonly used alternative dispute resolution mechanisms in large-scale commercial disputes are conciliation and arbitration. Numerous commercial contracts establish the obligation to exhaust a conciliation process or a direct negotiation stage before commencing arbitration, particularly in financial, corporate, or infrastructure-related transactions.

Arbitration is the preferred method for complex disputes due to its specialization, confidentiality, and faster resolution compared to judicial proceedings. The most frequently used arbitral institutions include local centers, which have their own procedural rules. It is also common for the parties to agree to apply international rules for the taking of evidence, provided that they expressly so agree.

In the absence of precautionary measures or anticipatory evidentiary proceedings, the judicial process begins with the filing of the claim. Although the law establishes short deadlines for its admission, in practice this may take between one and two weeks. Once admitted, service of the claim on the defendant is usually carried out within the following three weeks, at which point the defendant is considered formally summoned.

In Guatemala, there is no “discovery” system such as that found in Anglo-Saxon jurisdictions. Each party bears the burden of proving the facts it alleges and decides which documents to submit. There is no obligation to disclose information that may be unfavorable.

It is important to note that once the evidence has been offered and submitted, the principle of acquisition of evidence begins to apply. This means that the evidence may be assessed in favor of either party, regardless of who presented it.

However, the law allows a party to request that the judge order the opposing party to produce documents that are indispensable to substantiating its rights, and it is also possible to request the production of documents held by third parties. In commercial litigation, it is common to request the production of accounting and commercial books, which may be examined by an expert appointed by the court.

When the judge orders the production of a document and the required party fails to present it without justified cause, the court may presume as true the facts that the requesting party claim the document contains. This consequence reinforces the practical obligation to cooperate in the production of relevant evidence.

In Guatemala, witnesses are legally obliged to appear when they are summoned by the court. If a witness refuses to attend without justified cause, the judge may impose enforcement measures to ensure their appearance.

During the hearing, the witness initially answers the questions admitted by the judge that were proposed by the party requesting the evidence and may subsequently be questioned by the parties. The judge, the party that presented the witness, and the opposing party all have the right to ask additional questions to clarify the facts, which in practice constitutes a form of cross-examination.

In Guatemala, the general rule is that the losing party must pay the costs of the proceedings. However, the law grants the judge the power to exempt the losing party from paying costs, in whole or in part, in certain situations. The most relevant exceptions include the following:

• When it is established that the losing party litigated in evident good faith.
• When the claim or counterclaim includes manifestly exaggerated pretensions.
• When the judgment only upholds part of the main claims of the claim or counterclaim, when any defense of the losing party is admitted, or when there is reciprocal defeat.

These powers allow the court to adjust the award of costs according to the procedural conduct of the parties and the actual outcome of the dispute.

The Civil and Commercial Procedural Code provides for different precautionary measures aimed at ensuring the effectiveness of a future judgment. Among the most commonly used are the following:

• Preventive annotation. This consists of an entry in the Property Registry that warns third parties of the existence of a dispute concerning a registrable asset, whether movable or immovable. Its function is to prevent transfers to third parties in good faith and to protect the creditor’s interests during the proceedings.
• Attachment. This immobilizes the debtor’s assets, movable or immovable, to guarantee the eventual enforcement of the judgment. It is particularly useful with easily realizable assets such as bank accounts or registrable property. In the case of vehicles, these may be attached through the Vehicle Tax Registry of the Superintendency of Tax Administration, which operates as a centralized registry in accordance with the Traffic Law.
• Judicial intervention. This involves the appointment of an intervenor to administer certain assets or even the debtor’s business, preventing their deterioration or the improper disposition of assets during the process. Its effectiveness depends on the technical management of the appointed intervenor.
• Attachment or encumbrance of movable and intangible property. Under the Secured Transactions Law, economic units or registrable movable assets previously registered as security may be encumbered, providing an effective tool to secure obligations in commercial and financial transactions.
• A court-ordered travel ban. This prevents the individual from leaving the country — a measure that under Guatemalan law may only be imposed on natural persons and not on corporate representatives.

In Guatemala, civil and commercial courts lack jurisdiction to hear matters that have been validly submitted to arbitration, except in areas where the law expressly prohibits the use of this mechanism. Judicial intervention is limited to support and supervisory functions, such as the enforcement of interim measures issued by arbitrators and the recognition and enforcement of arbitral awards.

The applicable regime is the Arbitration Law, Decree 67-95 of the Congress of the Republic, a statute inspired by the UNCITRAL Model Law and which incorporates the fundamental principles of party autonomy, minimal court intervention, and the validity of the arbitration agreement. The law recognizes both domestic and international arbitration and establishes a procedural framework consistent with international standards.

In Guatemala, arbitrators are authorized to issue precautionary measures within the arbitration, provided that the parties have not agreed otherwise. However, arbitrators lack coercive power to enforce such measures on their own. When the enforcement of a measure requires public force or state authority, the arbitrators or the parties must request the assistance of the Civil Courts of First Instance in the place where the arbitration is being conducted, which act as support bodies to ensure its execution.

In Guatemala, there is no appeal available against an arbitral award. The Arbitration Law only allows the filing of a petition for review — equivalent to an action for annulment — before the Civil and Commercial Chamber of the Court of Appeals. This remedy is admissible only on specific, limited grounds, and the court may not review the merits of the dispute. Those specific grounds are as follows:

• That the party proves that it was incapacitated at the time of entering into the arbitration agreement, or that such agreement is void under the law chosen by the parties, in the absence of a choice, under Guatemalan law.
• That the party was not duly notified of the appointment of an arbitrator or of the arbitral proceedings, thereby affecting its right of defense.
• That the award deals with disputes not contemplated in the arbitration agreement or contains decisions that exceed the terms of the arbitration agreement.
• That the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, in the absence of such agreement, with the Arbitration Law.
• That the Chamber finds that, under Guatemalan law, the subject matter of the dispute is not capable of settlement by arbitration.
• That the award is contrary to Guatemalan public policy.

Guatemala is a State Party to the 1958 New York Convention, ratified on 30 January 1984, which constitutes the fundamental instrument for the recognition and enforcement of foreign arbitral awards in the country.

In addition, Guatemala is a party to the Inter-American Convention on International Commercial Arbitration (CIDIP), which reinforces the framework of judicial cooperation in commercial matters within the hemisphere.

These instruments allow for a system of recognition and enforcement aligned with international standards and provide legal certainty to parties engaging in cross-border arbitration.

In Guatemala, judgments issued abroad may be enforced if they receive the same treatment that the country-of-origin grants to the decisions of Guatemalan courts. The legislation establishes specific requirements for their recognition and enforcement, which make it possible to distinguish which judgments are admissible and which are excluded.

Those judgments that meet the following requirements are enforceable:

• That they were issued in a civil or commercial proceeding arising from a personal action.
• That they were not rendered in default nor against a person declared absent who has domicile in Guatemala.
• That the obligation whose enforcement is sought is lawful under Guatemalan law.
• That the judgment is final according to the laws of the country of origin.
• That the document is authentic, complying with legalization or apostille requirements and, if necessary, with a translation into the Spanish language.

Those judgments that do not meet these conditions are therefore excluded, including those concerning unlawful obligations, non-final decisions, judgments issued in improper default, or proceedings that are not eligible for recognition under Guatemalan public policy.

In Guatemala, there is no system for the “registration” of foreign judgments or arbitral awards.

In Guatemala, arbitral awards are enforced in accordance with the Arbitration Law, which establishes, among other matters, that any arbitral award must be executed pursuant to the enforcement procedure, and further provides that foreign arbitral awards shall be recognized and enforced in Guatemala in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of New York of 10 June 1958, the Inter-American Convention on International Commercial Arbitration of Panama of 1975, or any other treaty recognized by Guatemala.

Forced execution is available within one month from the date on which the arbitral award became final, before a Civil Court of First Instance. Once the execution request is admitted, the judge grants a three-day hearing to the other party, which may only oppose enforcement if the petition for review is still pending resolution. In this procedure, the parties are limited in their ability to file any remedy.

Pending enforcement, Guatemalan law allows creditors to seek interim measures specifically aimed at preserving assets and ensuring the effectiveness of the execution phase. In practice, the most relevant measures at this stage are those that prevent asset dissipation once a judgment has been rendered or when enforcement is imminent.

The most commonly used measures include attachment of assets, particularly bank accounts, receivables, and registrable property, as these allow for immediate asset immobilization prior to or during enforcement proceedings. Preventive annotations in the Property Registry are also frequently used to block transfers of real estate or other registrable assets while enforcement is pursued.

In more complex cases, courts may order judicial intervention over specific assets or business operations to prevent mismanagement or concealment of assets pending execution. Additionally, under Guatemalan law, a court-ordered travel ban may be imposed on natural persons in exceptional circumstances, where there is a risk that the debtor may leave the country to evade enforcement; this measure does not apply to corporate representatives.

These measures are granted at the court’s discretion and are designed to secure the practical effectiveness of enforcement, rather than to prejudge the merits of the dispute.

Proceeding on the assumptions outlined in the Model Answer, would a court in this jurisdiction recognise and enforce the arbitral award under the New York Convention?

In particular:

• Does the award fall within the scope of Article V(1) of the Convention, or would any of the grounds in Article V(1) justify refusal on the assumed facts?
• Is the subject matter of the dispute capable of settlement by arbitration under domestic law for the purposes of Article V(2)(a)?
• Would recognition or enforcement of the award be contrary to public policy within the meaning of Article V(2)(b)?

Response

From an enforcement perspective, Guatemala would recognize and enforce an arbitral award arising from a clause of this nature, provided that the award was rendered abroad under a legal framework in which the non-payment of a monetary obligation gives rise to a dispute capable of arbitration. In such circumstances, Guatemalan courts would apply the New York Convention and the Arbitration Law, limiting their review to the specific refusal grounds set out therein.

On the assumed facts, the arbitral award does not seek to enforce the underlying court judgment as such, nor does it reopen or re-litigate its merits. Rather, it gives effect to a separate contractual obligation arising upon non-payment of the judgment debt. The tribunal’s mandate is confined to verifying that the judgment is final and unpaid and to ordering the agreed contractual consequences of that non-payment. As such, the award concerns a purely patrimonial obligation, does not interfere with res judicata, and does not encroach upon functions reserved to the courts.

Any order requiring payment of the contractual sum, interest, or the provision of security would be treated as an enforceable monetary or performance obligation and would not be regarded as coercive or contrary to Guatemalan public policy. Accordingly, none of the grounds for refusal under Article V of the New York Convention would be engaged.

As a separate matter, if such a clause were to be assessed under Guatemalan law in the context of an arbitration seated in Guatemala, its effectiveness would be open to doubt. While the non-payment of a monetary obligation is in principle arbitrable as a patrimonial matter, Guatemalan procedural law provides that once a judicial decision becomes final, enforcement is conducted exclusively through the courts. In that context, a mechanism seeking to replicate or displace the judicial enforcement phase through arbitration would not readily align with the domestic procedural framework.