Since the beginning of President Rafael Correa administration (2007-2017) he manifested his hostility towards the ICSID convention: “withdrawing from ICSID is necessary for the liberation of our countries because [ICSID] signifies colonialism, slavery with respect to transnationals (…) I cannot tolerate this”[1], the former President said in public interviews.

 Correa´s feud against ICSID basically compromised 4 steps: i) In 2008, Ecuador denounced over a third of its BITs; ii) Later in 2008, the new Constitution of Ecuador came into force and it contained a confusing provision which seemed to prohibit the country from submitting disputes to international arbitral tribunals; iii) On July 2, 2009, President Correa issued Executive Decree Nº 1823 denouncing the ICSID Convention and declared its termination; iv) A couple of years later, Ecuador denounced the termination of all of its BITs. It is worth mentioning that most of the BITs contained survival clauses, so the investors were not prevented from commencing ICSID arbitrations against Ecuador.

One of the main accusations that Correa used for terminating the BITs is that they were “unconstitutional” pursuant article 422. However, the Constitution forbids entering intro treaties or international instruments that submit jurisdiction to international arbitration tribunals in contractual or commercial disputes and investment arbitration is a complete different creature. Unfortunately, the Constitutional Court did not consider that investment arbitration is different from commercial (or contractual) arbitration and declared that the BITs were unconstitutional; The unconstitutionality argument was seconded by the National Assembly and a special committee (CAITISA) in charge of reviewing the denunciations which reached to the same conclusion.

II. Ecuador returns to ICSID after 12 years

In the 2021 presidential elections, Guillermo Lasso, a former banker, was elected as the President of Ecuador. President Lasso has vowed to attract foreign investment and break away from the leftist policies adopted during Correa´s administration. It came as no surprise that one of the first things that President Lasso would do is try to find ways for regaining the trust of foreign investors after years of political instability. On June 21, 2021, the State signed the ICSID convention and now the next step is ratification.

There is an ongoing discussion on whether the ICSID convention needs to be previously approved by the National Assembly in accordance to article 419 of Constitution.  Pursuant to article 419, the ratification of international treaties will require the approval of the National Assembly in the following cases: 1) They refer to territorial or boundaries matters; ii) They establish political or military alliances; iii) They contain the commitment to issue, modify or repeal a law; iv) they refer to rights guaranteed in the Constitution; v) They compromise the State´s economic policy to international financial institutions or international companies; vi) compromise the country to integration and trade agreements; vii) They give competences of internal legal order to an international or supranational organization and; viii)  They compromise the country´s natural resources, water, biodiversity, etc. In my view, the ICSID does not require the approval of the National Assembly as it does not fall in any of the categories previously mentioned; Its very nature is to offer a neutral forum to solve international disputes.

Another relevant aspect is that Ecuador will consent to submit specific disputes to that mechanism on separate instruments to be signed with foreign investors. For instance, Ecuador could be part of the ICSID convention and not have a BIT containing a standing offer to arbitrate under said convention; Hence, being part of ICSID does not equals to automatic consent to arbitrate all disputes under that forum.

On June 21, 2021, President Lasso´s General Legal Secretary sent a communication to the Constitutional Court asking them to clarify on whether ICSID needs the prior approval by the National Assembly. In this document, the General Legal Secretary clearly explained that due to ICSID´s nature it does not require the National Assembly prior approval in accordance with article 419. In addition, he said the President has the legal capacity to sign and ratify international treaties according to article 418: “the President of the Republic is responsible for signing and ratifying treaties and other international instruments. The President will immediately inform the National Assembly of all the treaties that it sings, with a precise indication of their nature cand content (…)”. Currently, the Constitutional Court has not issued a decision on this.

III. Conclusion

The signature of the ICSID convention shows the current administration´s compromise of protecting foreign investment and attracting capital to the economy. In my view, this is a positive and important step taken by President Lasso because it allows Ecuador to enter into important new agreements with the international community, which will contribute to the country´s economic growth and result in the generation of jobs for its citizens and development of important projects for their well-being.

[1] https://www.iisd.org/itn/en/2009/06/05/ecuador-continues-exit-from-icsid/

Tobar ZVS announces the adoption of Kira, the AI-driven document analysis software that is now part of Litera’s Workflow product family, as part of an ongoing commitment to move its product offering from traditional service delivery models into a radically new client experience model. Tobar ZVS is the first law firm in Ecuador to adopt Kira. 

“We have already automated and digitalize many components of our legal products and client experience, including workflows, project management, contract drafting, data management, and collaboration tools, but were persuaded that AI not only brings about significant efficiencies but enables outcomes that would not be possible or practical to the human eye alone.” said Bernardo Tobar, Managing Partner at Tobar ZVS.  “We implemented AI for English language documents in 2021 and after reading AI For Lawyers, which was co-authored by Kira’s co-founders, we decided to test Kira, which can be trained in Spanish and has the added advantage of integrating with our digital operations platform, and have been impressed with how Kira has allowed us to solve specific client needs in a way that wouldn’t be possible through conventional methods, making our Firm’s value proposition unique”, added Mr. Tobar.

Kira will be used as part of an ongoing commitment to deliver innovative and results-oriented legal solutions to clients who seek counsel on M&A, Data Protection and Privacy Assessments, Compliance, Real Estate matters, Contract and Clause Bank Management, as well as for market intelligence.

“Tobar ZVS’ commitment to Kira will help the firm execute on its vision of innovating integral solutions that add value to its clients. By integrating Kira into its transactional practice, Tobar ZVS will be able to devote more time towards covering critical angles of risk,” said Kennan Samman, Vice President of Global Product Sales at Litera. “We look forward to seeing what the firm accomplishes during its journey towards leveraging advanced tools in legal practice.”

Tobar ZVS’ service delivery approach and business model are underpinned by a cutting-edge digital platform, which integrates workflow automation, legal project management, contract automation, artificial intelligence, a robust document management system, AES-256 compliant, and banking grade information security features.

 About Litera
Litera has been at the forefront of legal technology for 25+ years. As a global leader in workflow, AI-powered due diligence review and analysis, collaboration, and data management solutions, Litera provides legal teams with streamlined technology for creating, analyzing, and managing their documents, deals, cases, and data. Litera’s solutions help law firms and corporate legal teams worldwide work more efficiently, accurately, and competitively to provide their clients with usable and actionable information. For more information about Litera, visit litera.com.

“Forming an association with Kennedys strengthens our insurance practice and our ability to service our international clientele. We are looking forward to combining our expertise with the Kennedys team to serve the many shared clients we have and expand our global reach.” Said Managing Partner Bernardo Tobar.

Founded in 1993, Tobar ZVS is a full-service corporate law firm advising national and international clients on corporate, M&A, antitrust and competition, insurance, data protection, compliance, intellectual property, energy, natural resources, dispute resolution, tax, finance, fintech and environmental, amongst the key practice areas.

Tobar ZVS’s insurance practice is led by Partner René de Sola who commented “The strategic alliance with Kennedys enhances both firms’ depth and reach in key business sectors, such as insurance, and unlocks access to expert local knowledge. We couldn’t have asked for a better partner”

Kennedys’ Miami office serves as the hub for the firm’s Latin American presence. Kennedys has the largest reach of any insurance law firm with offices in Argentina, Brazil, Chile, Colombia, Mexico, and Peru, and six associate offices in Dominican Republic, Guatemala, Panama Puerto Rico, and recently Bolivia and Ecuador.

Anna Weiss, regional managing partner for LATAM and Caribbean at Kennedys, says: “There are excellent synergies between both firms, and I am delighted we have been able to formalise the association with Tobar ZVS.”

Alex Guillamont, partner at Kennedys, says: “We continue our expansion in the region with new associate offices, with whom we have worked and built a solid relationship serving mutual clients and have a proven record of success after working together for several years.”