Ecuador Pushes Emergency Arbitration In Agenda 2040 Investor-Security Package

Development

Ecuador's Agenda Crecimiento 2040, presented by President Daniel Noboa on July 21, 2026, includes emergency arbitration inside its legal-security axis for investment attraction.

The proposal is designed to give investors a faster impartial mechanism for urgent measures while a dispute is being resolved. Emergency arbitration does not decide the merits of the underlying case; it protects rights temporarily while the main proceeding advances.

Legal context

Ecuador's 2008 Constitution includes Article 422, which prohibits the state from submitting contractual or commercial disputes with private parties to international arbitration tribunals. That interpretation helped drive the termination of 17 bilateral investment treaties through 2017.

In March 2026, Ecuador's Constitutional Court reinterpreted the provision, opening space for bilateral investment treaties by clarifying that the prohibition is not absolute and applies to contractual or commercial controversies.

Emergency arbitration already exists in Ecuador's 2021 arbitration regulation. The policy question is whether it should move into the Arbitration and Mediation Law, which has been in force since 1997.

Recent use case

The mechanism is already visible in public-contract disputes.

Progen and ATM used emergency arbitration to try to stop contract terminations by Celec. The agreements were signed in 2024 and involved losses of more than USD 140 million.

ATM's Esmeraldas III contract covered 91 megawatts, but by July 2026 the plant was producing only 10 megawatts intermittently. Progen's contracts at Quevedo and Salitral covered 150 megawatts.

Business significance

For investors, the relevant issue is enforceable speed. Emergency arbitration can reduce exposure when a concession, contract, or permit action creates immediate damage before a full proceeding can be completed.

The proposal also fits Ecuador's broader attempt to increase foreign direct investment. The country remains one of Latin America's lower FDI recipients, and legal security is a recurring investor concern.

What to watch

• Whether the government sends a formal reform to the Arbitration and Mediation Law
• Whether emergency arbitration language tracks UNCITRAL-model practices used in Argentina, Chile, Uruguay, and Peru
• How Ecuadorian courts enforce emergency measures once granted
• Whether new bilateral investment treaty negotiations accelerate after the March 2026 Constitutional Court interpretation

Source: Primicias.