This country-specific Q&A provides an overview of Litigation laws and regulations applicable in Peru.
What are the main methods of resolving commercial disputes?
In Peru, the main methods for commercial conflicts resolution are: (i) the ordinary jurisdiction represented by the judicial system; and, (ii) the arbitration jurisdiction.
The ordinary jurisdictional service is public and generally applies to all disputes. On the other hand, arbitration is a private system of justice recognized by the Constitution. It requires a previous agreement between the parties (an arbitration agreement), except those with the Peruvian Government which are mandatory pursuant to Peruvian law.
What are the main procedural rules governing commercial litigation?
The main procedural rules to resolve commercial disputes depend on: (i) whether the dispute is submitted to the Judiciary system or to arbitration; and, complementary, (ii) if those disputes are also subject to foreign trade agreements’ provisions or to the Peruvian Code of Commerce.
In the Judiciary system, the process is governed by the rules established in Legislative Decree No. 768 (Code of Civil Procedure), which are mainly binding, unless otherwise expressly stated. In arbitration, the process is governed by the rules agreed between the parties, the regulations of the arbitration centers and by the rules established in the Peruvian Arbitration Law (Legislative Decree No. 1071).
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
National courts evaluate commercial disputes under a system of appeal courts (two phases), whereby the first instance decision is issued by a judge, while in the second phase, the judge’s decision is reviewed by an upper court (a higher judge or a superior court chamber). The judges determine their jurisdiction according to the cause amount and territory (e.g. location of the defendant’s domicile).
In most cases, a cause will be assessed first by a civil judge. Then, the upper court shall be the Superior Court chamber. Exceptionally, in these processes the “losing” party might file an extraordinary judicial review request (Cassation appeal) for the revision of the case by the Supreme Court. This Cassation does not constitute strictly a third instance, as it is not intended to challenge the merits of the case, but the correct application of the law in the process (e.g. existence of grounds for invalidity of the proceedings, among others).
How long does it typically take from commencing proceedings to get to trial?
In Peru, proceedings begin by filing a claim with the competent court and culminate with the issuance of a final judgment with res judicata effects. In this sense, after filing the lawsuit, all the procedural actions and phases will be initiated, which include the analysis of legal feasibility of the case, the evaluation of the evidence, the oral hearings, among others; until the issuance of the mentioned decision.
Regarding the term of the entire process indicated above, despite the fact that our legislation establishes maximum timeframes, the time limits are usually exceeded due to the huge number of cases that handle the judges/courts.
Concerning the arbitration system, there are no public statistics regarding timeframes, since each case is regulated by the private rules and, even, by international standards.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
As a general rule, hearings in the judicial system are public, with the exception of those related to family or criminal matters, in the investigation phase. However, as a consequence of the latest Shelter-in-Place order issued by the government, access to hearings has been limited only to the participation of the parties and their lawyers, considering its remote way of participation, and not in person. Exceptionally, judges may call face-to-face hearings.
Regarding the documents filed in a trial, these are not available to the public, but only to the parties and their attorneys. However, any person who has the file number of the process will be able to review the judicial decisions issued in a process through the electronic system of the Judiciary.
In arbitration, the information is private, unless the parties reach an agreement to make it public. However, the arbitration cases which involve the Government allow access of their content to the public once they are concluded.
What, if any, are the relevant limitation periods?
The Peruvian judicial system establishes deadlines for the filing of suits, subjecting them to expiration and a statute of limitations –except for some specific matters–. The main statute of limitations periods set forth in the Civil Code are the following:
10 years for personal claims regarding contracts, property or the nullity claim of an administrative act.
3 years for all civil service fee payments.
2 years to claim for extra contractual compensation.
7 years to claim for damages caused by a simulated act.
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
Regarding economic matters or other waivable rights, the Peruvian Judiciary system requires, as a prerequisite to filing a suit, the performance of an out-of-court directed settlement procedure (conciliation), which has an estimated duration of one month.
In arbitration, prior requirements of phases to the process (e.g. direct treats, voluntary conciliation, etc.), and the term thereof, will be exclusively subject to what the parties have expressly agreed.
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Any legal proceeding or arbitration in commercial matters is promoted by one of the parties. In case of trials, these begin by filing a lawsuit.
In an arbitration, this begins by filing a request for arbitration which will be evaluated by the Arbitration Center (an institutional arbitration) or by the sole arbitrator or Arbitration Court to be designated (an Ad Hoc arbitration). After it is cleared by the other party and accepted by the sole arbitrator/Arbitration court, the latter will determine the rules of the process, after which the plaintiff will be enabled to file the lawsuit.
Peruvian law does not provide any regulation for the legal concept of the “service”.
How does the court determine whether it has jurisdiction over a claim?
Once the lawsuit is received, every judge will review whether it meets the admissibility and provenance requirements established in the Code of Civil Procedure. Among these, the court must determine its competence to acknowledge the dispute, according to territory, amount and matter criteria. Notwithstanding the assessment made by the judge, the defendant may challenge it for the specific case. The judicial decision, for or against the judge’s jurisdiction, can be appealed.
In the arbitration, although initially the jurisdiction is defined by the Arbitration Center (in institutional arbitration), after that the arbitrators are entitled to review it, analyzing the arbitration agreement and the matters that are put to their consideration.
How does the court determine what law will apply to the claims?
In the Peruvian Judiciary system, Peruvian law is by default applicable, except when otherwise is agreed by the parties; or, when the regulations of Peruvian Private International Law or international treaties establish the application of a foreign legislation.
Regarding commercial arbitration, the freedom of the parties is broad, so that any legislation that the parties may have agreed upon, can be applied.
In what circumstances, if any, can claims be disposed of without a full trial?
Civil or commercial judicial processes may end, without the need of a full trial, in case of conciliation, acquiescence and recognition, judicial settlement, withdrawal and abandonment, in accordance with the provisions of the Code of Civil Procedure.
In arbitration, the parties are able to settle at any time during the process. Also, the plaintiff can withdraw the lawsuit if it deems it appropriate.
What, if any, are the main types of interim remedies available?
In Peru, precautionary measures can be granted in any type of process, in order to guarantee compliance of the final decision, provided certain legal requirements are met (e.g. danger in the delay). The one who request such precautionary measure is required to grant a warranty, for assuring the counterpart regarding damages that may be caused by the execution of the measure.
It is important to note that in our system all precautionary measures are granted without knowledge of the counterpart executed.
The main type of precautionary measure is the lien. It consists in the affectation of a good or right of the obligated party, even when it is in the possession of a third party (e.g. bank withholding, seizure, etc.).
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
The parties can file any type of documents to support their claims and facts, both in judicial and arbitration processes. However, in a judicial process, such filing must be made by the plaintiff with the suit or by the defendant in its answer thereof or counterclaim.
In addition, new documentary proof may be filed at any time, prior to the issuance of the final judgment, only related to new facts or facts alleged by the counterpart (in its answer thereof or counterclaim).
In the arbitration process, the opportunity for filing any proof is determined in the procedural rules established by the arbitrators and accepted by the parties. Usually, these allow the filing of documents with the suit and with the answering thereof; and exceptionally, with the approval of the Arbitration Court, until the beginning of the final phase for issuing the award.
What, if any, are the rules for disclosure of documents? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
The exhibition of documents is ordered by the Court, at the request of a party or by decision of the judge itself. For this, the petitioner party must explain his interest and content. His request must be strictly limited to those documents that are directly related to the process.
The exhibition is considered fulfilled once a complete and duly certified set of copies of the ordered documents are attached. If the exhibition refers to public documents, it will be deemed fulfilled just indicating the public dependency in which the original document is located. The exhibition can take place outside the premises of the Court, at the request of a party and in considering the quantity of the material offered. Third parties are only required to display documents that belong to any of the parties or are manifestly related to them.
In arbitration processes, the rules for document display are those established by the parties by mutual agreement.
How is witness evidence dealt with in commercial litigation (and, in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
The Code of Civil Procedure considers as a legitimate proof “the testification”, which must be proposed by the parties within the legally established timeframe.
The witnesses must personally testify in the hearing summoned by the judge for such purpose. The written or recorded statements (depositions) are not permitted. When the parties propose people to act as witnesses, the opposing party may object such designation or to the witness’ statements, based on whether objective or subjective aspects (e.g. personal background, personal relation to one party, existence of direct interest in the case, etc.).
In the cross examination, the Judge asks the witness about the controversial facts and the opposing party can ask further questions or request clarifications. When answering, legal advice to the witness is forbidden.
In arbitrations, the parties and the arbitration court establish the rules for the offering and performing of testimonials, even testimonies by video or writing being admitted.
Is expert evidence permitted and how is it dealt with? Is the expert appointed by the court or the parties and what duties do they owe?
In legal and arbitration proceedings, the offering of expert reports as evidence is permitted.
Experts’ reports can be offered by the parties or ordered by the court. Regarding the reports filed by any of the parties, it is not mandatory their explanation in a public hearing, unless requested by the parties and the judge considers it relevant. In the case of experts’ reports ordered by the judge, those must be filed in writing to the court in order to be notified to the parties, and explained orally at the hearing.
In arbitration, given the flexibility of the process, the experts’ reports can be filed by the parties or requested by the arbitration court at any time during the process, before beginning the award issuing period.
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
The judicial process in Peru is based on an appeal court system which enables the possibility to challenge final and provisional decisions. These claims are filed to the judge who issued the decision. Notwithstanding this, the upper court (specialized judge or superior court chamber) resolves the claim. The timeframes for these filings vary depending on the type of process and the decision to be appealed, however, it ranges from three to ten days.
In arbitration, the decisions of the arbitration court, other than the arbitration award, may be asked to be reconsidered within the term established by the parties, by applicable arbitration regulations or by the arbitration court itself. In the absence of determining any timeframe, the Peruvian arbitration law establishes a deadline of three days after the decision has been notified.
What are the rules governing enforcement of foreign judgments?
Two processes are followed for the recognition and execution of foreign judgments:
1) The process of recognition (exequatur) is filed with a Peruvian court in order to obtain, for a foreign judgement, the same condition of res judicata, applicable to local judgements. Among reciprocity between the two countries involved, the Exequátur requires the fulfillment of certain conditions (e.g the foreign judgements must not be related to matters of exclusive Peruvian jurisdiction; the due process rights must have been granted and assured; among others).
2) The execution of foreign judgements previously recognized will be subject to the same requirements and process applicable to local decisions.
Arbitration awards issued abroad may be recognized and executed in Peru, in accordance with (i) the New York Convention; (ii) the Panamá Inter-American Convention; or, (iii) any other trade agreement on recognition and execution of arbitration awards.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
Litigation costs can be reimbursed in both judicial and arbitration proceedings. In the case of judicial processes, the imposition of the “court costs and attorney’s fees” does not need to be claimed and is the responsibility of the defeated party in the process, if so is considered by the judge.
In arbitration, the imposition of the costs of the process depends on the agreement of the parties. Otherwise, the arbitration court shall order the allocation of the total costs as it deems appropriate, being usual that these be attributed to the overdue party.
What, if any, are the collective redress (e.g. class action) mechanisms?
Peruvian regulations allow the possibility that the Public Ministry, Regional Governments, Municipalities, rural communities and/or Indigenous Communities and non-governmental associations or institutions; may act in favor of an undetermined group of people, regarding assets of inestimable heritage value such as the environment or the cultural or historical heritage of the consumer.
What, if any, are the mechanisms for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings?
In the judicial system, the participation of third parties in a process and the consolidation of processes are allowed. It can be promoted by any of the parties or even by the third party itself, for which it must invoke a legitimate interest in the outcome of the processes. Regarding the accumulation of processes, it must be requested prior to final judgement being issued in any of them.
In arbitration, the Peruvian arbitration law establishes the possibility to recognize “third parties” who may not have signed the arbitration agreement, but have participated actively in the negotiation of the contract that contains the arbitration agreement. In this case, these non-signatories are deemed as actual parties in the arbitration.
On the other hand, the consolidation of arbitration processes proceeds by agreement of the parties and pursuant the regulations of the arbitration center.
Are third parties allowed to fund litigation? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
Our legislation does not establish any prohibition on the financing of processes, being the parties entitled to obtain it, with the limit of not violating Peruvian public policy.
In this sense, the financing proceeds for both the plaintiff and the defendant and it can consider the regular and successful fees of the attorneys, the costs of the experts’ reports and all the expenses process may generate.
What, in your opinion, is the main advantage and the main disadvantage of litigating international commercial disputes?
From our perspective, litigating international trade disputes in our country through arbitration has two primary advantages (i) the Peruvian arbitration law follows the Model Law of UNCITRAL, which contains international standards of the best arbitration jurisdiction in the world, and; (ii) the Peruvian law recognizes the importance of arbitration to resolve this type of controversy, limiting its intervention to the presumptive provisions established in the arbitration law. It is important to point out that, at the stage of execution of an arbitration award, judges are prohibited from ruling on the merits of the dispute, in order to respect the decisions issued by the arbitral tribunals. In conclusion, the Peruvian legal system constitutes a favorable seat for arbitration.
In addition, the Peruvian legislation that regulates arbitration focuses mainly on the agreements of the parties to guarantee/preserve procedural actions, evidence, testimonies, expert statements and even the final content of the arbitration award, with the exceptions provided when the State Peruvian is part.
Additionally, institutional arbitrations in Peru are mainly administered by centers of the trade union chambers dedicated to trade, with solid reputation. Their regulations promote a resolution of the dispute within the established deadlines.
What, in your opinion, is the most likely growth area for disputes for the next five years?
The main institutional arbitration centers have been consolidated and the most important disputes are resolved within the arbitration jurisdiction; much emphasis has been placed on improving the ethical standards that apply to arbitrators.
In addition, the health emergency crisis created by COVID 19 has generated a series of disputes that can reasonably be expected to be resolved through arbitration.
Finally, people who carry out commercial activity have confidence in the solution of controversies through arbitration jurisdiction, due to the characteristics of speed and privacy.
What, in your opinion, will be the impact of technology on commercial litigation in the next five years?
For the development of the arbitration jurisdiction, the centers that administer arbitrations, have just issued various regulations that allow the development of the entire arbitration process with the use of technology: documents by electronic platforms, online hearings and performance of evidence and expertise through the use of digital mechanisms. It is reasonable to foresee that in the coming months the use of technology will deepen much more and this will allow for greater commercial arbitrations.
How have the courts in your jurisdiction dealt with the COVID-19 pandemic and have you seen particular types of disputes arise as a result of the pandemic?
The health emergency facing by the country led the Executive Council of the Judiciary, which regulates the administrative actions of the jurisdictional system at the national level, to issue various resolutions by which the implementation of digital platforms is provided, enhancing the use of technology for the development of jurisdictional tasks even after the period of isolation. So, the filing of lawsuits and administrative claims, and even the hearings, will be displayed through digital platforms.
Regarding any specific type of dispute that the current Shelter-in-Place context may arise, it is still soon to foresee a certain outcome. However, it is highly possible to see a great number of claims alleging lack of legal basis in some of the orders issued by the Government. Of course, it will be highly required the legal advisory on civil claims and lawsuits, mostly regarding the enforcement of contracts.