Litigation 2019 Second Edition

Last Updated December 05, 2019

Uruguay

Law and Practice

Authors



Pérez del Castillo & Asociados is a boutique law firm composed of 20 staff members with the main office in downtown Montevideo, in front of the Plaza Independencia. The firm specialises in labour law, where its team excels in both consultancy and litigious labour matters; corporate and M&A, where it provides assistance in corporate matters and intervenes in the drafting and negotiation of commercial contracts, M&A and complex corporate matters; real estate, where it provides all kind of real estate services related to acquisitions, disposals and administration of movable and immovable property; and litigation. The firm's litigation team participates in complex civil and commercial litigation cases and, in the past few years, has participated in several dispute resolutions of great importance in the local market. It's main areas of expertise are corporate dispute resolutions, both private and judicial; bankruptcy procedures; and civil and administrative litigation.

Uruguay has a civil law system. It is characterised by a set of laws, sometimes codified, that define and protect the rights and obligations of all subjects of rights. All the subjects of rights are subordinated to the regulations and will have the rights and duties established by the regulation in force. This set of laws covers all branches of legislation such as: civil, commercial, administrative, family, procedural, environmental, etc.

Judgments are mandatory only for the specific case to which they refer. The jurisprudential background is used as a secondary source of law and is not mandatory or binding.

The general rule in the Uruguayan legal system is the self-composition of the process by the parties, the judge being the director of the process. The principle is that, within the framework of the respective procedures, the judge acts only at the request of the party concerned (unless, in very particular cases, the law provides that they proceed ex officio). As a consequence of the above, judicial proceedings in Uruguay, except for criminal matters, are adversarial.

Regarding criminal matters, as of 2017, the criminal proceedings are accusatory. It is the district attorney who accuses and the judge who decides. Criminal proceedings continue to be inquisitive only for cases of misdemeanours (petty crimes).

With regard to the implementation of judicial proceedings, the Uruguayan Codes in force aim to achieve largely oral trials, however, the parties to the process tend to use documentary mechanisms. The legal system is best defined as a mixed one, since it has both oral and written instances.

In the Uruguayan legal system there are multi-judge and single-judge courts.

The jurisdiction, that is, the place where the courts are competent to act, depends on: (i) matter (civil, bankruptcy, family, criminal, etc), (ii) amount (up to a certain amount or a minimum amount) and (iii) venue (city, department, national).

The hierarchy of courts is as follows: (i) Supreme Court of Justice (in regard to judicial proceedings); (ii) Courts of Appeals in Civil, Criminal, Family and Labour matters; (iii) Legal Courts of First Instance in Civil, Labour, Family, Minors, Customs, Criminal and Administrative Litigation matters; (iv) Courts of First Instance of the Inland (multi-matter Courts); (v) Departmental Peace Courts in Civil, Commercial and Customs matters of the Capital city (up to a maximum amount); (vi) Departmental Peace Courts in Civil, Commercial, Customs, Labour and Offence matters of the Inland (up to a maximum amount). (vii) Misdemeanour Courts of the Capital city; (viii) Court of Peace in Civil, Commercial, Customs, Labour and Misdemeanours matters (up to a maximum amount).

Simultaneously, there is the Court for Contentious Administrative Proceedings, which deals in contentious administrative matters with the competence to annul the administrative acts of government bodies (decrees, resolutions, etc).

Court records and, summarising, all judicial proceedings are public, unless confidentiality is expressly provided by law or if the court so decides for reasons of security, morality or personal protection of any of the parties. The law has confidentially protected certain proceedings such as those related to the identity of people or where there are minors involved.

The parties must appear in all procedural acts, duly assisted by a lawyer. There are exceptions to the aforementioned rule for some minor proceedings (such as for consumer protection proceedings) or proceedings where there are less than three lawyers involved. The legal representative should always be a lawyer who has graduated from the University of the Republic of Uruguay or from any institution duly authorised by the competent authorities.

Furthermore, the lawyer must have accomplished some formalities regarding the prosecutor degree in order to represent a client before the Court for Contentious Administrative Proceedings.

Third-party funding of judicial proceedings is not foreseen in Uruguayan regulations in force, since access to justice in Uruguay is free. Although there are taxes, duties, expenses and fees that the parties to a legal process must assume, the Constitution of the Oriental Republic of Uruguay provides for free legal processes for those declared poor under the law. The foregoing means that they will be exempted from payment of the corresponding taxes and may be assisted by public defenders.

There are no types of lawsuits available for third-party funding, as there is no third-party funding of lawsuits in Uruguay.

Third-party funding of lawsuits in Uruguay is not regulated so the issue does not arise.

Third-party funding of lawsuits in Uruguay is not regulated so the issue does not arise.

Third-party funding of lawsuits in Uruguay is not regulated so the issue does not arise.

Lawyers can agree with their clients that their fees will be paid according to the success of the lawsuit. In cases where the benefit obtained by the client is exclusively in equity, the fee amount resulting from the application of the different regulatory elements may not exceed 50% (fifty percent) of that benefit.

There is no time limit regulation regarding the third-Party funding of lawsuits as this funding is not regulated in Uruguay.

The legal regulations in force provide for two types of preliminary proceedings or preparatory actions before the main lawsuit: (i) pretrial proceedings and (ii) procedures prior to certain legal proceedings.

Among others, the pretrial proceedings include:

  • verifying any default;
  • obtaining the necessary elements for the process, such as documents and accounting data; and
  • providing injunctive relief or other guarantees related to the subsequent process.

The consequences for failure to comply with the pretrial proceedings will depend on what kind of diligence is involved. For example, if a creditor does not file the notice of payment prior to an executive trial to prove the debtor's default, the consequence will be the impossibility of initiating the trial due to the lack of a necessary element. Failure to comply with other pretrial proceedings, such as the return of process, may result in damage to the interested party, but without resulting in an impediment to initiating the judicial process itself.         

Prior procedures are those that the regulations require for the purpose of initiating a subsequent one, these may be judicial or extrajudicial. Failure to comply with the prior procedures obliges the judge to suspend the subsequent proceedings until the regulations are complied with. An example of the foregoing is the prior conciliation required before initiating a civil suit for damages, or the conciliation at the Ministry of Labour prior to initiating a trial before the competent Labour Court.     

Regarding the Contentious Administrative Proceedings Court, the regulations oblige the plaintiff to exhaust the administrative route prior to initiating a motion for annulment.

Compliance with prior procedures (whether judicial or extrajudicial) is a necessary condition for initiating the main or subsequent trial.

The periods of prescription and expiration to bring a legal suit depend on the subject matter. They range from six months to 20 years.

Those who can dispose of the rights therein defended can appear in a process on their own behalf. Those who do not have the free exercise of their rights, either totally or partially, must be represented when appearing in court.

Both, individuals and legal entities (acting through their agents, representatives or authorised persons for such purposes) may be part of a process. In criminal matters, only natural persons may be sued.

Without prejudice to the already mentioned pretrial proceedings or prior proceedings (see 3.1 Rules on Pre-action Conduct), a lawsuit begins with the filing of a complaint in which the plaintiff describes and proves his or her claim. The complaint can be amended by the plaintiff provided that this is done before it has been answered by the defendant or the deadline to respond has expired. New facts that may amend the initial complaint may also be added to the process, after the filing of the claim and until the conclusion of the case.

As regards the rules of service that must be made within the scope of a legal process, the general rule is that they are serviced by the court itself (through its officials) at the domicile of the defendant. Notices are serviced electronically, once the parties provide an electronic address, and therefore the first service is always in person at the defendant's physical address. At present, the Peace Courts do not have electronic notice, so parties are served in person.

Those notices outside the jurisdiction are served by means of letters rogatory, whether national or international, as the case may be.

In the event that a defendant fails to respond to the lawsuit, the facts alleged in the claim will be accepted as long as the alleged facts are not non-enforceable rights. This is not applicable in criminal matters since, in accordance with Uruguayan regulations in force, no one can be convicted for a crime that they did not commit

In our law, collective actions on common interests are admitted, that is, those that are in the interest of an indeterminate group of people.

In these cases, either the Office of the Public Prosecutor, any interested party, or the institutions or associations of social benefit that, according to the law or in the opinion of the court, guarantee an adequate defence of the committed interest may bring this type of action.

In current Uruguayan regulation, there is no regulation regarding the information that should be provided to a litigant about the costs of a lawsuit.

In accordance with the applicable regulations, the parties to a lawsuit may request provisional measures from the court such as injunctive relief or pretrial proceedings.

In both cases the purpose is to ensure the outcome of the trial.

Injunctive reliefs are those dictated by court rulings, with the purpose of ensuring, preserving or anticipating the effectiveness of the estimated resolution that may be dictated in the course of a legal process considered as principal trial, so that a certain right may be made effective in the case of litigation in which the existence and legitimacy of that right is recognised.

Pretrial proceedings are those measures that a party to a lawsuit requests from the court to facilitate a subsequent outcome.

The law does not regulate the power of the parties to request the early judgment of an issue. However, it is foreseen that the courts can resolve, at any time during the process, to terminate it in advance as long as it is resolved unanimously. This advanced resolution may be taken regarding all or part of the process.

The foregoing is an authority attributed both to courts of second instance and courts of cassation. Therefore, in no case could it be considered in courts of first instance.

Uruguayan regulations foresee the so-called prior exceptions that are motions that the defendant may raise in order for the court to dismiss the plaintiff's claim without having to continue with the process or analyse the substance of the matter. Some of the previous exceptions foreseen in our legal system, among others, include prescription, lapsing, res judicata, settlement, lack of jurisdiction and litis pendency.

The Uruguayan General Procedural Code foresees that third parties may participate in or be summoned to appear at a lawsuit where they may have some type of interest.

The following is a brief summary of the ways in which third parties can take part in judicial proceedings in Uruguay on a voluntary basis.

Joined Party Intervention

This is the possibility for any third party, that may have a substantial relationship with one of the parties, to the lawsuit, and who could be adversely affected if that party does not win, to join. Any person who could be affected by the judgment may also intervene in the process as an intervenor.

Cross Claimant Intervention

Whoever claims, in whole or in part, the subject or the right of the lawsuit, may intervene formulating his or her claim against the plaintiff and the defendant, so that in the same process he or she may be taken into consideration.

Only the court can resolve that a claimant should pay the costs of the procedure.

Each party must bear their own costs. In the event that a party to a lawsuit requests injunctive relief, the regulations foresee that those who request it must offer sufficient counter-guarantees in order to secure the damages that could result from the provision of the measure. The court may exempt petitioners from the counter-guarantee request if there are good grounds to do so.

The deadlines for the courts to issue resolutions are provided by law. Those resolutions that are of mere procedure must be resolved at the hearing or within 48 hours (depending on the case); deadlines for rendering judgment will be 15 days if they are interlocutory orders (that is, during the process) and 30 days if they are final judgments (that is, at the end of the trial).

A party may request that a measure be resolved urgently, it will be the court who determines whether or not such treatment has merit.

Discovery, as it is known in other jurisdictions, does not exist in Uruguay. Our regulation provides for pretrial proceedings and/or procedures prior to certain legal proceedings in civil matters.

Among others, the pretrial proceedings are: (i) verifying any default; (ii) obtaining necessary elements for the process, such as documents and accounting data; and (iii) providing injunctive relief or other guarantees related to the subsequent process, to anticipate the return of process that could be lost while waiting for another stage. In relation to the testimony of witnesses, it is allowed at this stage only in exceptional cases.

The consequences of non-compliance with pretrial proceedings will depend on what kind of diligence is involved. In some cases, such as failing to file a notice of payment to prove the debtor’s default, the result will be the impossibility of bring an action due to the lack of the necessary elements. Failure to comply with other pretrial proceedings, such as the return of process, may result in damage to the interested party without resulting in an impediment to initiating the judicial process.         

The party requesting pretrial proceedings must identify, among other issues, the specific purpose of the measure. It will be the court who will qualify the measure and order or reject its diligence.

Regarding the costs of the legal process, if the party against whom the measure was ordered opposes it with reckless malice that postpones unduly, and in a sustained manner, the fulfillment of the request, then that party must bear the costs and expenses of the lawsuit. Furthermore, if certain criteria are met, an individual can go to public defenders as well as to free legal offices committed to giving legal advice and legal representation, in order to protect and enforce the rights of the least privileged.

As long as the court admits and provides for a pretrial proceedings and/or prior procedures measures, it is possible to obtain from a third party the necessary elements to bring an action, such as documents, accounting data, public information, etc. In certain exceptional circumstances, a third party may testify as a witness in the pretrial proceedings.

As for the procedure to follow in these cases, it will depend on the pretrial proceedings and/or prior procedures applicable to the specific judicial proceedings in civil matters. In general terms, the party requesting the measure must declare the name and address of the party against whom the action will be promoted, the object of the process and the specific purpose of the measure. The court will qualify the measure, and order or reject its diligence. The procedure will order a subpoena against the party against whom the measure is requested, especially if it is a means of proof, unless this communication may frustrate the final purpose and effectiveness of the measure.

Regulations in force provide for pretrial proceedings and/or prior procedures to certain legal proceedings.

Prior procedures are those that the regulations require in order to initiate a subsequent action; these may be judicial or extrajudicial. Failure to comply with prior procedures obliges the judge to suspend the subsequent action until the regulations are complied with. An example of the foregoing is the prior conciliation required before starting a civil process for damages, or the conciliation in the Ministry of Labour prior to initiating the trial before the competent Labour Court.

Regarding contentious administrative proceedings, the regulations bind the plaintiff to exhaust the administrative route prior to initiating a nullity action.

Compliance with prior procedures (whether judicial or extrajudicial) is a necessary condition to initiate the main or subsequent trial. Regarding the types of processes and their characteristics, see 5.4 Alternatives to Discovery Mechanisms.

As for the documents that the parties are required to disclose, in principle, any document required by the court must be disclosed.

The position that the defendant has to take in the face of prior procedures or pretrial proceedings will depend on the specific case, in any event the way in which he or she acts will be his or her own responsibility.

The Uruguayan legal system provides for pretrial proceedings, and/or prior procedures to certain legal procedures.

Professional secrecy in our country ensures confidentiality between those who appear before the court and the legal professional. It is not a mere discretion or partial silence, but total secrecy with respect to third parties about the agreements between them. Professional secrecy is an inalienable obligation of the acting professional even when disclosure could benefit others. Violating professional secrecy constitutes the crime provided for in Section 302 of the Criminal Code.

Recently, Law No. 19,574, which seeks to prevent money laundering, has added lawyers to the list of subjects required to report suspicious transactions. Although the obligation is restricted to a series of activities carried out on behalf of their clients, it indirectly erodes professional secrecy.

Finally, it should be emphasised that the regulations applicable to professional secrecy cover both external and in-house counsel.

In Uruguay there are different situations in which a party may refuse to disclose the contents of a document. Notwithstanding that each case must be analysed specifically, these are some examples. The obligation to keep banking secrecy has been in force in Uruguay at a general level since 1982, although it has been reduced through different regulations concerning tax administration.

With regard to personal data, regulations in force set forth certain restrictions for the transfer of data which, in principle, can only be communicated for the fulfillment of the purposes directly related to the legitimate interest of the issuer and the recipient and with the prior consent of the owner of the data.

Finally, confidentiality documents provide certain restrictions and limitations regarding their transfer to third parties in certain situations.

In our country, the regulations foresee that injunctive relief may be awarded by the courts in any legal process, both contentious and voluntary. They will also be awarded at any stage of the case and even as preliminary diligence. Injunctive relief is always at the request of the party, unless the law authorises it to be available ex officio and will also be awarded under the responsibility of the person requesting it.

Whoever requests the injunctive relief must prove before the judge:

  • fumus bonis iuris or likelihood of a good right, that is, the existence of a right that must be protected and that its existence can be summarily justified;
  • periculum in mora, which implies that there is a true and current danger creating a fear that the time taken by the main process will make illusory the judgment that recognises the right;
  • suitability of the injunctive relief to challenge the danger, the question lies in determining whether the requested injunctive relief is suitable, apt or appropriate to dispel that danger; and
  • counter-guarantee, which is the guarantee that must be offered and provided by the person requesting the measure in anticipation of the damages that may be derived from it.

Uruguayan regulations indicate that the judge will be the one who freely determines the injunctive relief that he or she deems essential, naming for example the prohibition to innovate, embargoes and seizures. The judge may order the measure that he or she deems pertinent, not being limited by a list of injunctions provided for in the law.

There is no injunctive relief in Uruguayan law that prevents the substantiation of two parallel processes, both in Uruguay and abroad.

The length of time taken for the approval of an injunctive relief varies substantially depending on the supporting evidence available to the party requesting it. Likewise, the time that the lawsuit will take will depend on the type and amount of counter-guarantees offered.

Lawsuits may last from 15 days to more than one year.

In cases where an injunctive relief is requested to tend to ensure the outcome of the main proceedings, the future enforcement of the judgment and also for cases where the litigation is decided provisionally or in advance pending a final judgment, the rule is to process that injunctive relief unilaterally and confidentially. That is, no notice is given to the counterparty until the injunction is awarded so that it will be decided without the presence of the counterparty.

On the other hand, when the measure that is requested is for evidence to be produced before trial, a preliminary investigation measure, the rule that applies is the other way round: the principle is that the injunction is awarded with notice to the counterparty.

The counter-guarantee is one of the requirements that the person requesting the injunctive relief must meet before the judge sustains their request. The counter-guarantee is the surety – personal or in rem guarantees – that must be offered and provided by the person requesting the measure in anticipation of the damages that may be derived from it for the respondent. Typically, money, bank guarantees or real estate are offered as counter-guarantee.

Except in really exceptional cases, the judges have the legal mandate to demand counter-guarantees before sustaining the requested measure. The Law foresees the exceptional case of there being well-founded reasons to exempt the petitioner from the counter-guarantee. In any case, the court must only allow the exemption on a well-founded resolution; the allegation or proof of solvency is not enough.

It is legally possible for a judge in Uruguay to award injunctive relief on assets that are not located in Uruguay. Logically, all requirements must be met for the injunctive relief to be issued and then a cumbersome procedure will begin to enforce that measure abroad.

The injunctive relief must be requested against the counterparty in the event that it is requested within the scope of an ongoing legal process, or against whoever the future defendant will be in the main trial. The injunctive relief will expire if the claim is not filed within thirty days of completion, the petitioner is then condemned to pay all the costs of the process and damages caused.

In cases where injunctive relief that tends to ensure the outcome of the main proceeding is requested, the rule is to process that injunctive relief unilaterally and confidentially. That is, the counterparty is not notified until the measure is awarded. In these cases, the injunctive relief is inexorably fulfilled before the affected party finds out about it, and so, in principle, the judicial decision could not be breached.

On the other hand, when the measure that is requested is for evidence to be produced before trial, a preliminary investigation measure, the rule that applies is the other way round: the principle is that the measure is awarded with notice to the counterparty. The non-appearance or non-compliance of the party against whom the measure is requested will allow the facts affirmed by the petitioner to be considered true, in all that it is not contradicted by the evidence of the main proceedings.

The procedural structure used in Uruguay is one of court hearings. It is not an oral procedure in its pure form, but it combines the virtues of written acts for the proposition of claims with the advantages of oral arguments for conciliation matters, correction of procedural defects and evidence. Therefore: the procedures related to motions, judgments and appeals are conducted in writing and the procedures related to conciliation, evidence, correction of procedural defects, etc are conducted orally. Witness statements and expert evidences are filled in a hearing, in the presence of the parties and the judge.

The judge becomes the true director of the process. The full validity of the principle of immediacy that constitutes one of the essential pillars of the civil process is effectively ensured and the double instance is assured, in principle.

In relation to the extension of the hearings, the ones that usually take less time are the preliminary hearings. They take place after the parties submit their respective statement of claim and answer to complaint. Its content and fundamental objectives are to attempt the conciliation, the correction of procedural defects (resolution of previous exceptions, analysis of alleged procedural nullities, etc), and the fixation of the object of the process and of the evidence and determination of the means of proof to be filed.

In Uruguay, jury trials do not exist.

The standard is that the evidentiary phase is mainly reserved for the parties, except in some matters such as labour. In the writ of summons and answer to complaint the parties must enclose all the documentary evidence that they will try to assert. They must also indicate the name and address of the witnesses, as well as the other means of proof on which they intend to rely.

Subsequently, and in a single hearing, the judge decides which means of evidence he or she will admit and which ones he or she will not. In our country, the general rule is that evidentiary issues must be determined in a hearing. But in addition, it is important to take into account that evidence "belongs to the procedure". In accordance with the rules of evidentiary acquisition, at a certain time the means of proof is acquired for the procedure, so it cannot be unilaterally withdrawn by its proponent. Furthermore, Uruguayan regulations provide that the parties have the obligation to collaborate in presenting the evidence.

In Uruguay, the origin and admissibility of expert witness testimony is a subject widely debated, both in doctrine and in jurisprudence. This is because, while the witness must limit himself or herself to narrating what he or she saw without making value judgments, the expert has the task of ruling on the causes and effects of what has been observed, with the possibility of diagnosing and forecasting, thus fulfilling a critical function that is forbidden for the witness. Beyond the theoretical discussion, in practice most jurisprudence admits their testimony as long as certain requirements are met.

The expert witness is, as it arises from the denomination itself, a witness, not just an expert. In that sense, he or she is subject to the statute of the witness; in particular, to the duty to appear, to declare and to tell the truth in the report or narration of the perceived facts.

On his or her own initiative, the judge can complement the evidence of the trial, through the measures to provide greater clarity, which he or she can use at any stage, until the conclusion of the case. But even in this case, the court is limited in many aspects. By this mechanism the court cannot replace the evidentiary inactivity of the parties, who have on their backs the burden of proving the facts they allege. The activity of the court is complementary, and not a substitute for the parties' activity (or lack of it).

Hearings in Uruguay are open to the public as all judicial proceedings are of a public nature, unless the reverse is expressly provided by law or if the court so decides for reasons of security, morality or personal protection of any of the parties. The law has confidentially protected certain proceedings, such as those where proceedings related to the identity of people or where there were minors involved.

The judge directs the processes and therefore has an active and key role. He or she has transcendent powers/duties to order the process and investigate the truth, within the framework of the facts alleged and disputed by the parties. The judge has a preponderant role as a director in the determination of the object of the process and of the evidence, in the determination of the evidence to be submitted and in its completion. The judge interrogates the witness before the lawyers do so, in almost all cases.

Regarding the rendering of final judgment, although theoretically it is possible for the judge to render it at the hearings when the evidence has been fully produced and the parties have stated their closing arguments, in practice the judges do so outside the hearings. That is, they take a few days to analyse in depth the allegations of the parties and the evidence submitted before rendering judgment.

In Uruguay, the timeframe for ordinary civil proceedings is very difficult to determine beforehand since it depends on the complexity of each case. For a start, ordinary civil proceedings can last from two to ten years.

In brief, the ordinary procedural structure is as follows. In the first place, an attempt for prior conciliation is made before the Justice of the Peace. Then, the plaintiff presents the written complaint along with the evidence. Subsequently, and within 30 days, the defendant responds in writing along with the relevant proof. Afterwards, the preliminary hearing is held whose content and fundamental objectives are to attempt the conciliation, correction of procedural defects (resolution of previous exceptions, analysis of alleged procedural nullities, etc), fixation of the object of the process and of the evidence and determination of the means of proof to be filed. Subsequently, the complementary hearing is held in which the evidence is completed and, at the end, the allegations of the parties are made. Finally, the judge renders final judgment. Eventually, there will be an appeal and an appeal on points of law.

The parties do not require the approval of the court to settle a lawsuit. However, it is usual that once the settlement agreements are signed, they are produced before the judge for approval purposes. Once approved by the judge, the agreed transaction is afforded the authority of res judicata and cannot be questioned in any way and the judgment becomes final by operation of the law.

The parties may jointly present the terms of the settlement before the judge of the case in a public and open way or, simply record that they have reached an agreement and, therefore, request that the process be terminated, remaining confidential on the specific terms of the settlement agreement.

Usually a confidentiality clause is added to the settlement document with relevant fines in the event of non-compliance.

A settlement agreement approved by the competent judge has the authority of res judicata and, consequently, is enforceable by the parties like any final judgment.

In order to render null and void a settlement agreement, the consent of the parties involved is required. Another way of leaving it without effect is demanding the termination of the agreement alleging breach of the other party or their failure to comply with a term or condition stipulated as a cancellation provision, or filing the limited exceptions provided for the execution procedures.

The awards available to a successful litigant will depend on what was requested in the process. For example, a court could corder compliance with an enforcement measure, the payment of an amount of money, the rescission of a contract, specific performance, etc.

Damages, both in relation to the type of damages claimed (property or moral damages), as well as the amount corresponding to each of them, must be calculated and credited by the plaintiff when filing the claim. If the defendant does not dispute the settlement presented by the plaintiff, the one filed by the plaintiff is considered as valid, unless otherwise stated.

If the alleged damages were questioned, throughout the lawsuit the evidence must be processed so that the court may finally resolve.

Different types of damage can be claimed. These include emerging damage, lost profits and moral damage. The latter, in principle, can only be claimed, according to majority jurisprudence, by natural persons, not by legal entities.

Also, as an exception and for areas specifically provided by the legislator, such as labour law, punitive damages can be claimed, which the plaintiff receives according to a set rate.

The rule is that, in contractual responsibility actions, interest accrues from the notice of non-payment given by the plaintiff, while in extra-contractual responsibility actions, interest accrues from the moment the illicit act happens.

In order to apply default interest, it is necessary that it to have been expressly agreed upon, unlike for compensatory interest which can be applied as established by the regulations.

Once a favourable declarative judgment has been rendered, it must be enforced provided that the losing party did not comply voluntarily. The party that won the trial must formally request compliance with the payment order within three days' notice. In case of non-compliance by the notified party, the enforcement mechanisms of the judgment must be initiated before the court of competent jurisdiction. The final declaratory judgment may establish the payment of a due and payable amount, or not. In the second case, a procedure must be carried out aiming to establish the net amount to be paid, prior to the so-called collection proceedings, consisting of the seizure of the debtor's assets and their subsequent enforcement through public auction.

Foreign judgments have mandatory, probative and enforceable effects in Uruguay. They must be recognised in Uruguay without requiring the review of the substance of the matter they are dealing with. Only the review of compliance with the corresponding procedural acts is required. They must comply with the formal requirements of authenticity in the state of origin, and must be duly legalised and translated, as appropriate.

The Uruguayan courts will verify that the ruling judge had jurisdiction, that the defendant had been legally notified according to the laws of the state of origin, that an appropriate defence had been guaranteed, that the judgment has the authority of res judicata and that it does not contravene the principles of international public order of Uruguay.

The enforcement must be requested before the Uruguayan Supreme Court of Justice, which orders the summons of the counterparty and sends the file to the Court Prosecutor seeking his or her opinion, after which the court rules without the possibility of any appeal.

All court rulings may be reviewed, unless expressly provided otherwise. They can be challenged by the parties to the process, including third parties who intervene not as principal; they can also be contested by the successors and anyone who may be harmed by the effects of the judgment.

The remedies available in Uruguay are the actions for clarification, extension, reinstatement, appeal, appeal on points of law and review, as well as the complaint for denial of appeal and the petition for unconstitutionality.

Nullity incidental pleas, prior exceptions, opposition to the citation, as well as the so-called ordinary subsequent procedures in executory proceedings or trials are also considered to be challenging remedies.

Actions for clarification and extension are filed before the court that rendered the judgment within three days of that judgment and are resolved by the same court. Its purpose is for the court to clarify or supplement some point that the parties consider obscure or difficult to interpret.

The appeal for reinstatement is also resolved by the court that rendered the judgment, when it is an interlocutory order (not referring to the merits of the case) or processing resolution.

The appeal is the most important remedy as it involves the review of the judgment by a higher court, which may, if appropriate, amend, revoke or annul the judgment of first instance.

Last but not least, it is worth mentioning the appeal on points of law, which can only be lodged against second instance judgments if the first and second instance judgments are not coincident and the amount of the case exceeds 6,000 UR – a unit of measure, whose value is adjusted periodically according to the Average Wage Index (approximately USD150,000). This appeal is resolved by the Supreme Court of Justice, as well as the petition for unconstitutionality of the laws.

The appeal can be based on inadmissibility of merit or nullity for breach of legal requirements. It is lodged against final judgments of first instance and against interlocutory orders in support of the appeal for reinstatement. The appeal may have a suspensive, a non-suspensive or a deferred effect, depending on the case. The appeal of final judgment always has a suspensive effect. In other words, judgments of first instance are not enforceable until the pending appeal is resolved.

The appeal against a final judgment must be lodged, in writing, within 15 days after the notice. It is filed before the court that has rendered it. Then the court serves notice to the counterparty for a period of 15 days. The counterparty may answer the appeal and/or adhere to the appeal, in which case the adhesion is serviced to the other party to answer the adhesion to the appeal.

Groundless appeals are summarily rejected. In any other case, the Court of First Instance files the motion to the Court of Second Instance that receives the appeal, evaluates its admissibility and sends the file for study to each of the members of the court, and afterwards renders the judgment of second instance.

In the second instance it is possible to request the return of process only in case of supervening evidence or new facts.

The appellate courts cannot modify the judgment to the detriment of the party that appealed except in case of adhesion to the judgment. Issues not filed at the trial court cannot be resolved. Yet, it falls to the appellate court to rule on interest, damages and other issues arising from events subsequent to the judgment of first instance. It can also resolve issues that were omitted in first instance judgments, even if they are not appealed.

Appellate courts cannot submit the admission of the appeal to the fulfillment of any type of condition except those provided by law.

Once the judgment of second instance is rendered, the appellate court does not impose its enforcement but returns the file to the Court of First Instance. The Court of First Instance is in charge of ordering compliance with the decision and carrying out, where appropriate, the process of enforcing the judgment.

The final judgment of each legal process has to provide for the payment of court fees, or costs and expenses; or declare that each party will be responsible for paying the costs and expenses it incurred throughout the process

Court fees are all taxes and fees of experts, depositaries, appraisers and other court assistants. Costs and expenses are all fees of attorneys and prosecutors.

In incidental actions, court fees and costs are imposed on the losing party.

At second instance, if it is a confirmatory judgment in all its parts, court fees and costs are imposed on the losing party, unless the court provides otherwise for a well-founded reason.

For the purpose of adjudicating on costs and expenses payment, the courts estimate whether the parties entered into litigation with any valid reason or – on the contrary – with haste, guilt or malice, thus deserving a recklessness note.

Interest may be requested on the payment of costs and expenses, accrued as from the final judgment that imposes them.

Mediation, conciliation and negotiation are the most common alternative dispute resolution (ADR) methods in Uruguay. Both the parties and their lawyers consider these methods of dispute resolution very favourably because of the time and money savings they entail.

Arbitration is increasingly being included as a dispute resolution method in contracts. Arbitration is considered preferable to judicial proceedings since, on the one hand, a resolution is reached in less time, and on the other hand, those who take the decisions are experts in the subject matter at issue. However, arbitration proceedings tend to be much more expensive than judicial processes.

According to our legal system, conciliation prior to court proceedings is mandatory except in cases provided by law. There are specialised courts in the matter.

For the plaintiff in a lawsuit, prior conciliation attendance is a requirement to begin the trial. In the case of the defendant, the absence at a prior conciliation stage is a simple presumption against him or her, that is, it is presumed that the plaintiff is right although it admits evidence to the contrary.

Prior conciliations are offered by the judicial branch. Having the same structure as the judicial branch, we can affirm that the procedure is organised and adequate.

The arbitration process is regulated in the General Procedural Code of Uruguay. In addition, the international treaties signed on the subject and the Civil Code appendix applies.

Subject matters on which the law does not allow the reaching of an agreement cannot be submitted to an arbitration process.

Arbitral awards cannot be challenged other than by nullity, which corresponds in the following circumstances:

  • for having been issued out of term;
  • for having been issued on uncommitted points;
  • for not having been issued on compromising points;
  • because the arbitrators have refused to receive any essential and determining evidence;
  • for delegating the conciliation provided as mandatory by the law;
  • because it is about issues on which agreement is not allowed; or
  • for violating the authority of res judicata issued from a judgment or arbitration award.

The court in which the case would have been heard, if the arbitration had not been agreed, is the one which will enforce the arbitration award. The procedure to be followed is the same as for judgment enforcement.

Enforcement of foreign arbitration awards will depend on what is established in the corresponding international treaties or the laws regarding the enforcement of foreign laws.

Pérez del Castillo & Asociados

Juncal 1327 18th floor
Ciudadela Building, of 1803 y 1804
Montevideo 11.000
Uruguay

(+598)29150743

(+598) 29150762

estudio@pdelc.com.uy https://www.pdelc.com.uy/
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Law and Practice

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Pérez del Castillo & Asociados is a boutique law firm composed of 20 staff members with the main office in downtown Montevideo, in front of the Plaza Independencia. The firm specialises in labour law, where its team excels in both consultancy and litigious labour matters; corporate and M&A, where it provides assistance in corporate matters and intervenes in the drafting and negotiation of commercial contracts, M&A and complex corporate matters; real estate, where it provides all kind of real estate services related to acquisitions, disposals and administration of movable and immovable property; and litigation. The firm's litigation team participates in complex civil and commercial litigation cases and, in the past few years, has participated in several dispute resolutions of great importance in the local market. It's main areas of expertise are corporate dispute resolutions, both private and judicial; bankruptcy procedures; and civil and administrative litigation.

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