Corporate | Commercial
Romero Arteta Ponce- RAPLaw Firm Ecuador have more than sixty years of experience counselling our clients on the Ecuadorian codes and regulations applicable to the rights and relations of companies engaged in commerce, trade, or mercantile pursuits in Ecuador.
We have extensive expertise writing, reviewing and counselling in the area of national and international contract law.
Sample services in this area include distribution and supply agreements, as well as sale, purchase, leasing contracts, franchising, etc.
Our international trade law attorneys counsel and are experts in bills of lading, bills of exchange, international freight agreements, franchise agreements, joint ventures contracts, and documentary credits.
The most important factor for our Law Firm is to provide thoughtful legal services and surveys with the highest professionalism and care to our clients.
I. Presentation of our Law Firm activities
Serving a wide-range of international and domestic clients, the firm has overseen numerous important projects to Ecuador’s development. They have included amongst others, the supply of services for the construction of oil refineries, pipelines, hydroelectric power plants, telecommunications, cement plants, and the contribution in different privatization projects in the areas of cellular communications, public utilities, as well as exploration and exploitation of hydrocarbons legal advisory, such as:
- Quito and Guayaquil International Airports Construction Project.
- Advisory for the construction of the Cementos Selva Alegre’s facilities, actually Lafarge Cementos (UNACEM) from France.
- Representation of the banana exporting companies – Chiquita Brands.
- Hydrocarbons exploration and exploitation participation contracts for several blocks.
- Representation of Petroleum Services Contracts.
- Rebuild of the Trans-Ecuadorian pipeline – Morrizon Knudsen.
- Cell phone concession contract – IUSACEL-PORTA and other projects of interest, until they have transferred the rights of the concession to a third party.
- Representing the legal interest of the following airlines: Delta Airlines, Panagra, Eastern Airlines, Servivensa, Challenger Air Cargo, Martin Air.
- Handling of the legal matters of Toyota Ecuador and Toyota Tsusho.
- Handling of the legal operation of Lloyds Bank PLC, Wells Fargo.
- Handling in Ecuador of Reinsurance Cases such as: Aeca case; Cubana de Aviación case; Icaro (Barcelona) case, Million Air Case, Gonzalez Suarez Military Accident in Quito among others.
- Handling of Administrative Claims in different Public Institutions, including insurance cases.
- Handling of a large number of lawsuits representing foreign companies such as: Reanult; Toyota; Kia.
- Handling of an important number of Arbitration Cases, national and international such as: Ecuatoriana de Aviación vs Emsa Services, representing the Germany Company; Oiltrader vs Lafarge, representing the Frech Company among others.
- Handling commercial matters for Toyota, Toyota Tsusho, Kia Motors, etc.
It is also worth pointing out, in the public concession context, that Romero Arteta Ponce Abogados has ample expertise in Ecuador’s important national petroleum industry. Under the concession mechanism, the Ecuadorian Congress has passed legislation allowing the government to enter into concession/participation contracts with foreign petroleum companies.
Our firm has represented and counselled numerous companies in such agreements. Representative clients in this area include: Santa Fe Energy Resources Inc. (USA), Korea Petroleum Development Corporation (SOUTH KOREA), Petrobras (BRAZIL) and Triton Energy Company (USA), Suelopetrol.
Moreover, our Law Firm practices of course the Ecuadorian law in the following areas: tributary, aeronautical, telecommunications, mediation and arbitration, banking and insurance, franchising, business and commercial law, concessions, immigration, electronic commerce, employment law, trusts and probate law, international affairs, intellectual property, etc.
We also advise in different matters the following Embassies in Ecuador: US Embassy; Switzerland Embassy; French Embassy, Estonia Consulate among others.
DISTRIBUTOR OR DEALERS AGREEMENTS IN ECUADOR
- Protection Law for Foreign Representatives.
In 1976 Supreme Decree No. 1038-A was issued through which the Law for the Protection of Representatives, Agents and Distributors from Foreign Companies was passed, establishing a series of rules which protected concessionaries in the case of the termination of a commercial relationship.
These rules stated that in spite of the contract establishing clauses for which parties reserve the right to freely terminate the commercial relationship, neither party could terminate the contract without proving before a judge the existence of a “just cause” which would permit the aforementioned termination, also defining which causes are understood as just for such a purpose. If the just cause was not mediated, the conceding party had to pay the concessionary for damages and losses for which Decree 1038-A established some factors for calculating the payout amount. These factors included: the cost invested by the conceding party, the cost of goods acquired which could not be commercialized, the capital gain of the business, and the number of years the agent has been with them, etc.
Through Law No. 125 of Supreme Decree No. 1038-A, Decree No. 1038-A was reformed and interpreted in 1996 and a maximum limit for indemnities was established to be paid in accordance with Decree No. 1038-A, which could not exceed the result reached upon applying one of the two formulas established in Law No. 125.
Decree 1038 –A, (published on the Official Registry number 245, dated December 31, 1976) established the rules for executing agreements among Foreign and Ecuadorian companies. The aforementioned law also includes a section regarding the agreement’s termination and its corresponding indemnification; it only provided the unilateral termination of the “DA” if there was a fair cause duly proved before the corresponding judge; such causes should be originated by the concedent or grantor and are the following:
- The serious breach of contract performed by the concessionaire on regards to the obligations established in the Agreement or in the Law.
- Any action or omission performed by the concessionaire that might seriously affect the company’s interests (Motransa).
- The bankrupt or insolvency of the concessionaire.
- The liquidation or ending of the activities.
On September 19, 1997, Decree 1038–A was revoked, leaving the contracting parties free to establish the contractual conditions, as established in article three.
“Art. 3.- The private contractual relations between nationals and foreigners, shall be subject to the principle of autonomy of contractual will and freedom. Consequently, without prejudice of the dispositions set forth in the applicable Civil and Mercantile Legislation, it corresponds only to the contracting parties to anticipate the contractual conditions and the causes for termination of contracts, as well as the compensations, if applicable.”
The Civil Code on its article 8, number 18 establishes that for every contract executed it is understood the incorporation of the laws in force at the moment of its execution. Therefore, if the “DA” was executed while Decree 1038–A was in force, the other party could claim indemnification and compensations according to that law.
This repeal did not, however, void the rights and obligations established in the contracts, nor alter the judicial situation originating under the protection of said laws. In accordance with the stipulation in Article Three of the abovementioned Law, “private contractual relationships between national and foreign entities will be subject to the principles of autonomous will and contractual freedom.
Consequently, without detriment to applicable stipulations in the Civil Code, and Commercial Legislation, this corresponds only to the parties to a contract guided by the contract’s conditions and the reasons for the contract’s termination, as well as the severance agreement that would take place.
Our legislation states that all contracts incorporate “the laws in force at the time of signing”.
In Ecuador since October 2011 the Ecuadorian Congress issued a new Antitrust Law and the respective Regulations to the Law since April 2012.
Article 11 of the Law Prohibit Agreements and Practices between two or more economics operators related to the any commercial relationship which object or effect could to the possibility to limit the competence and that Article has more than 21 numerals that determinate when the conduct will prohibit.
Numeral 17 determinate that is prohibit between the parties in a commercial relation to establish the fix price to sell the products without a justification.
Numeral 19, determinate that establishing distributions agreements with exclusivity, clauses of non-competition or similar that will not have any justification will constitute agreements and practices against the law or prohibits.
II. Recommendations about us
Established in 1950, Romero Arteta Ponce is one of the oldest, most successful and important law firm in Ecuador.
It is ranked among the greatest and most prestigious firms in the country by Chamber & Partner; Latin Lawyer 250, The Legal 500; IFLR 1000.
The firm is recommended by Latin Lawyer: “A Who’s Who of Latin American Law Firms” after comprehensive research by this independent publication; Chamber & Partners; independent publication; IFLR 1000 “The Guide to the World´s Leading Financial Law Firms”, independents publications.
Our law firm has been honored with the distinction of being selected the Ecuadorian representative of “Meritas Law Firms Wordwide” www.meritas.com the second largest network of independent law firms in the world.
Additionally, Romero Arteta Ponce Abogados is listed in, amongst others, The American Bar, and the United States Embassy Legal Referral Directory.