Volume 5, Number 5, Page 1

Peruvian Congress Passes Conciliation Law

by Moises Castro-Toro

Until recently the concept of dispute resolution through conciliation was a foreign one in Peru. Extrajudicial transaction, negotiation, mediation and arbitration served as the mechanisms used to settle claims outside the courts. An overloaded court system and a desire to instil the culture of alternative dispute resolutions, however, spurred the Peruvian Congress to enact the Law of Conciliation.

Outlined below are the main characteristics of the new law.

Definition

Law 26872 defines the extrajudicial conciliation as an alternative dispute resolution mechanism by which the parties turn to a conciliation center (Centro de Conciliación) or a justice of the peace for assistance in finding a consensual solution to the conflict.

Entities Providing Conciliation Services

The main novelty of this law is the introduction of conciliation centers. Non-profit private or public entities — universities, professional associations and chambers of commerce, for example — may provide conciliation services. Each conciliation center should have one or more conciliators properly trained and accredited by the Minister of Justice of Peru.

The parties involved may opt for the conciliation services of a justice of the peace rather than a conciliation center.

Character of the Conciliation

Article 6 establishes that a conciliation is binding on the parties and makes the law effective 24 months after the law becomes effective, the conciliation process will be mandatory.

Single Hearing

The conciliation hearing can consist of one or more sessions, but the process cannot be repeated. The hearing must take place at a conciliation center or before a justice of the peace.

Claims Subject to Conciliation

Claims that can be conciliated are described in this section of the law. Criminal disputes, with the exception of issues related to the amount of civil indemnification arising from a crime, may not be brought for conciliation.

Procedure

The conciliation process is initiated at the request of one or both parties. When a conciliation hearing has been requested, it falls under the jurisdiction of a justice of the peace, according to domicile, or the respective conciliation center. The hearing must take place within 30 days after issuance of the summons to the parties. The date may be changed if agreeable to both parties.

If the parties chose to go to a conciliation center, the center appoints a conciliator, who summons the parties within five business days from receiving the request. The conciliation hearing will take place within 10 business days from the first notification. The parties involved must attend the hearing in person, with the exception of those cases when, by law, the party must have legal representation. Parties with a foreign domicile may be represented at the conciliation hearing by an attorney or by someone granted power of attorney; or, in the case of corporations, through their legal representatives.

Conclusion of the Conciliation

The conciliation will be concluded upon

• Complete mutual agreement between the parties
• Partial agreement between the parties
• Lack of agreement between the parties
• Nonattendance of one party to two sessions
• Nonattendance of both parties to a session

Should any of these five events occur, the conciliator will record the results of the hearing. The document is considered the “execution title,” which means that the rights and obligations included in the document may be enforced by the Procedure of Execution of Judicial Resolutions.

Moises Castro Toro, is a member of the Banker and Toro law firm, which is located in Lima, Peru. The firm’s practice areas include intellectual property, patents and trademarks, corporations, civil law, commercial law, administrative law, foreign trade.