Ecuador’s Attainment of the Sumak Kawsay and the Role Assigned to International Arbitration

Abstract

The current Constitution of Ecuador was approved by referendum on September 28, 2008 and replaces the 1998 Constitution. The text was published on October 20, 2008 in the Official Registry of Ecuador. As Part I of this chapter will explain, the 2008 Ecuadorian Constitution includes Article 422 preventing the Ecuadorian State from ceding its sovereign jurisdiction to international arbitration entities through entering into Treaties or international instruments. This provision is a clear manifestation of the rejection generated in Ecuador by an ex ante and general submission to international tribunals. Additionally, Part I discusses in detail the wording of Article 422, highlighting the doubts and difficulties of interpretation posed by this constitutional provision. Part I finishes by reflecting on two events derived from the approval of Article 422: the denunciation of the ICSID Convention and the denunciation of a number of Bilateral Treaties on the Promotion and Guarantee of Investments (BITs) signed by Ecuador. Part II of this chapter studies some recent judgments of the Ecuadorian Constitutional Court, which have declared many BITs as unconstitutional. A detailed review of these decisions will lead us to make a critical assessment. Part III analyzes the most recent manifestations of the Ecuadorian government regarding international investments. These latest contractual and legislative developments force us to reconsider the real impact that Article 422 of the Constitution is having on Ecuadorian economic life.