Dominican Republic


In summary

This chapter discusses the challenges and updates in the application of the Dominican Republic restructuring and insolvency law, which came into force in February 2017. Over the past four and a half years that the law has been in force, the courts have developed criteria for topics that have caused doubts since the enactment of the law, such as the payment of officers’ fees and process expenses. The courts have also recently established criteria in relation to the conditions for the acceptance of restructuring requests of business groups and individuals, and have addressed contradictions between norms, such as Law No. 189-11 on trusts that incorporated an abbreviated foreclosure procedure, and provided more clarity on the effects of the law and the scope of the stay of proceedings conceived in it.


Discussion points

  • Criteria for payment and cap on officers’ fees
  • Distinction between officers’ fees and process expenses
  • Reorganisation of a business group
  • Limits of a merchant to seek reorganisation
  • Contradiction between norms solved by the court in relation to stay of proceedings and suspension of adjudication decision in foreclosure procedure
  • Exequatur procedure required for cross-border insolvency proceedings

Referenced in this article

  • Restructuring Law No. 141-15
  • Rules of application of Law No. 141-15 – Executive Decree No. 20-17
  • Reorganisation of Arconim Constructora, SA
  • Reorganisation of Transporte Duluc (Tradulca), SA; Servicios Petroleros, SA; and AMG, SA
  • Cross-border insolvency proceeding of TMS Dienstleistungs GmbH

Introduction

Restructuring Law No. 141-15 is the principal legislation that governs insolvencies and restructuring procedures in the Dominican Republic. The Law was enacted in August 2015, but came into effect on 7 February 2017, after an 18-month transitory period. Furthermore, the rules of application of Law No. 141-15 were signed into law by Decree No. 20-17 on 13 February 2017.

This means that the Dominican insolvency regulation has been in force for only four and a half years. Nevertheless, creditors and debtors are deciding to lean on the country’s reorganisation and bankruptcy statute to protect their credits or assets and claims have increased during the covid-19 pandemic.

To provide an illustration of the insolvency practice in the Dominican Republic to date, we will refer to the statistics provided by the courts on 6 September 2021, and the processes published by the reorganisation and liquidation courts on their website. Since the entry into force of the law in 2017:

  • 53 restructuring claims have been dismissed by the courts;
  • there are currently nine active cases;
  • there is only one judicial liquidation procedure that has successfully concluded after the execution of the liquidation plan (Trevigalante) where the authors were the attorneys of the debtors; and
  • only one company has obtained the approval of the reorganisation plan approved by the creditors and the court (Arconim), where the authors are the trustee and ancillary expert, respectively.

It is worth mentioning that during the covid-19 pandemic, from March 2020 to date, 21 restructuring requests and one foreign insolvency recognition request have been submitted to the courts.

Our firm is participating or has participated in seven of the nine active cases as per the local insolvency legislation. We have participated in the processes both as legal representatives of the debtors seeking reorganisation or liquidation and of the main creditors of the processes. Also, in two cases (involving Arconim and the business group formed by the entities Transporte Duluc (Tradulca), SA, Servicios Petroleros, SA and AMG, SA) one of the authors of this chapter (Fabio Guzmán-Saladín) acted as conciliator or trustee and the other (Pamela Benzán-Arbaje) as auxiliary expert. This chapter describes the main issues that we have experienced in our practice in this area during the past 18 months.

Officers’ fees

Criteria for payment of insolvency officers’ fees

In the Dominican legislation, creditors cannot request the involuntary liquidation of the debtor before attempting a reorganisation. On the contrary, debtors may initiate a voluntary liquidation and there are no material differences to proceedings opened involuntarily.

Nevertheless, even when this is a possibility, most cases prone to liquidation start with a reorganisation attempt from the debtor. This fact ultimately causes the court to appoint several officials, hence creating an important privileged credit caused by the fees of the officers involved. For instance, in some cases, the debtor requests a reorganisation, but the court designates a verifier before appointing a trustee and, upon the impossibility of a reorganisation, appoints a liquidator. This entails that a privileged credit for at least two different officers is automatically registered.

Regardless, even when the credit for the fees of the officers is considered privileged, and thus is of higher priority for collection and payment only preceded by labour liabilities, most professionals listed as potential officers for reorganisation and liquidation proceedings are very disappointed in how some courts are treating the payment of their fees and expenses. Some even asked to be removed from the lists of available candidates.

Originally, the problem resided in the fact that most courts did not allow for advance payments of officers’ fees and expenses, and so all the officers involved in a reorganisation or liquidation procedure had to bear all of the expenses incurred, including the fees for bailiffs required for subpoenas, expendable materials, fuel, travel expenses and so on, and fees for their auxiliaries and the hours incurred by them in the insolvency work, without having any certainty as to if, or when, they will get paid. The scenario started to change for the trustees and liquidators after several requests of advance partial payment of fees from officers under very different circumstances were accepted by the courts by applying a purposive approach when interpreting the law. In that sense, the courts established that an advance payment based on a provisional estimation of trustee fees is possible even when the law provides that the trustee fees are determined when the restructuring plan is homologated or when the restructuring plan is terminated. The court understood that the fact that the fees cannot be liquidated in advance does not prohibit the court from making an advance payment, on a provisional basis, considering the range indicated in the law for the payment of the trustee fees which must be calculated and fixed considering 1 to 3 per cent of the total assets of the debtor.[1], [2]

However, there was still an underlying problem for the payment of the verifiers’ fees. To analyse this situation is important to understand the role of the verifier in a restructuring procedure. Our local law establishes that the verifier is the person designated by the court to verify, dictate and inform the court of the financial situation of the debtor following the initial request for restructuring. Its designation is not mandatory, as the law establishes that whenever the court is provided with sufficient documents or information to evidence the imminent or actual insolvency and financial situation of the debtor, it can skip the designation of the verifier and directly appoint a trustee to commence the negotiation and conciliation phase of the process. Conversely, whenever these elements are not provided to the court with the initial request, the report of this officer confirming the financial situation of the debtor and the viability of a restructuring procedure is a precondition for a restructuring request to be approved.

The law establishes that a provisional estimation of the verifiers’ fees must be performed by the court when appointing the verifier, while the final liquidation of the verifiers’ fees is performed once its work is completed and a decision on the original request is rendered by the court. As to the moment of payment of the verifiers’ fees, the law is not clear because it only indicates that all officers’ fees have a privilege for payment and must be paid before any other debt, except labour debts; however, it does not specifically establish when they must be paid. Considering that the verifier is the first officer to be designated and the law is not clear, in practice their fees were being paid late in the process after the liquidation or restructuring plan was approved and executed. This situation was causing all verifiers to reject their designation and even ask for their removal from the officers list.

To remedy this, the court developed the criteria that the verifiers’ fees should be paid as soon as their participation in the process was concluded and following five days after the decision of the court on the admissibility or dismissal of the request was notified to the claimant. The court used comparable doctrine and jurisprudence, specifically from Spain, to indicate that the priority granted to the verifiers’ fees is based on the role they play in the process and for that they must be paid outside the restructuring or liquidation procedure per se, before the distribution and payment is performed within the execution of a restructuring or liquidation procedure. This was an accurate decision, since it guaranteed the continuing participation of the verifiers in these procedures.

Criteria on cap on officers’ fees

Another situation that has recently arisen regarding officers’ fees is the interpretation performed by the courts in relation to the cap on the officers’ fees. The law and articles of application of the law are very clear in this aspect as they establish a minimum and maximum that must be respected in all cases, as well as the base to determine the fees – it considers the value of the assets of the debtor or the assets restructured or liquidated, as well as the complexity of the case, the special responsibilities of the officers in the case, and the effectiveness and quality of the work performed by the officer.

For example, in the case of trustees, the law and articles of application indicate that the fees for the negotiation and conciliation phase will be determined based on the assets estimated by the court, in a proportion no less than 1 per cent and no greater than 3 per cent, and it adds that in no case may the fee be less than 25,000 Dominican pesos or more than 6 per cent of the total registered or recognised debt.

Despite the above, in Arconim, the court liquidated the fees of the trustee below the 1 per cent of the assets of the company claiming that there is a contradiction in the law when it refers on the one hand to the minimum being 1 per cent and on the other hand to a minimum fee of 25,000 Dominican pesos. Following this reasoning and applying the reasonability principle and considering the purpose of the law which is to maximise the assets of the debtor to guarantee that it continues its operation and can pay all its creditors, the court understood that the minimum fee is actually 25,000 Dominican pesos and that understanding otherwise would result in an extraordinary and exorbitant fee that could affect the financial situation of the debtor greatly. We understand this decision was very unfortunate and that the court performed an irrational and unjustified interpretation of a law that is very clear when it established that the trustee fees should be determined between 1 and 3 per cent of the assets of the debtor and only when that amount is less than 25,000 Dominican pesos should this be considered the minimum.

Also, in this case the court did not consider the complexity of the case (with over 1,000 creditors and many real estate trusts involved, and whose conciliation phase took almost two years with many creditors’ claims within the process); the efficiency of the trustee (who helped obtain the approval of the first restructuring plan in the Dominican Republic); and the responsibilities of the trustee (who has been the financial administrator of the company since October 2019). Considering all of this, the trustee appealed the decision and is awaiting a decision from the Court of Appeals.

Distinction between officers’ fees and expenses

Another situation that has now become a problem in these proceedings is the distinction made by the law between officers’ fees and expenses of the procedure. In that sense, to provide context, it is important to understand that article 67 of the articles of application of Law No. 141-15 establishes that within five days of the acceptance of a reorganisation request the debtor must deposit at the court the amount provisionally estimated by the court to cover the expenses of the procedure, which cannot be more than 0.5 per cent of the registered credits or the credits reported by the debtor on its request. The situation is that in most cases the 0.5 per cent is an important amount that is usually more than five to 15 times what is actually required to cover the expenses of the court and the publication fees; thus, requiring such a large amount from a company in financial distress and for it just to be sitting in an account with no purpose could affect greatly the viability of the process and directly impact the cash flow of the company unnecessarily. For this reason, this has been one of the main points of discussions between the attorneys and companies interested in reorganisation procedures, as well as within the general legal community since the entry into force of the law.

In some cases, officers and debtors have asked the court to fraction the payment of these fees or even use it to advance officers’ fees and expenses. We have seen a development in the criteria developed by the courts in this regard. Originally, the reasoning of the Court of Santo Domingo, National District, was to request upon the acceptance of the reorganisation the payment of the full 0.5 per cent to the debtors; however, now it is asking only for a proportion of this amount. On another hand, the Santiago Court originally adopted a more flexible and purposive approach interpreting the law based on its principles and objectives, which in this case are to set the necessary legal scenarios to allow the distressed companies to continue to operate while trying to restructure their debts and operations.

Following this interpretation, in the Arconim case, originally when accepting the restructuring request the Santiago Court, instead of asking upfront for the full 0.5 per cent referred to by the law, opted to make provisional estimations of these costs and fees based on the costs involved in each phase of the process and then making payment requests from time to time to the company in reorganisation. This has allowed the company to keep the necessary capital and cash flow to continue its ordinary operations and payment to its essential suppliers. However, after approving the restructuring plan and liquidating the fees of the trustee and the verifier, the court demanded the payment of the remaining costs to complete the 0.5 per cent mandated by law separately, instead of including the fees of both officers in the calculation to establish the total costs for the procedure. This imposes a great burden and even an impasse for companies seeking reorganisation, considering that they are already facing problems of liquidity and cessation of payments. Following this reasoning, Arconim filed a partial appeal against the decision that homologated the restructuring plan specifically to revoke the request of the court to complete the payment of the 0.5 per cent in addition to the trustee fees. This appeal is pending decision.

In our opinion, whenever there are sufficient funds and assets to cover the expenses of the process and the officers’ fees, the court should allow for a fractioned payment to cover immediate and mandatory expenses. Also, we understand that whenever there is a particular situation in a case that leads the court to deem it necessary to ask for the full 0.5 per cent at the commencement of the proceeding, the court should use some of that amount to cover a proportion of the officers’ fees to alleviate the burden on the debtor and justify the requirement of such an important amount.

Another complaint regarding this matter is that the court does not provide reports on how the funds are being used despite requests made to that effect by the debtor and the creditors (as in the Pawa case) and, unfortunately, the law does not establish anything in that regard.

The Pawa case is the only one we know of where the court delivered to the liquidator the remaining funds of the 0.5 per cent paid by Pawa at the beginning of the process to cover the costs of the procedure. In this case, another situation arose since the decision that appointed the liquidator was revoked by the Court of Appeal and recently a new liquidator has been designated. The law does not determine whether the revoked officer must transfer to the new appointed officer the funds and documents it has received, so the court in this case will have to establish if, how and when those funds are going to be transferred, as well as the requirement to request a report from the previous liquidator to audit the administration and use of said funds.

Furthermore, after its revocation, the revoked liquidator requested authorisation from the court to use the funds under its administration to make some payments to cover the expenses and fees incurred until its revocation; however, the request was declared inadmissible by the court, since it was submitted by the liquidator after it had been revoked. We understand that even though the bottom line of the decision was correct, since it could not allow such payments without any proper audit and report, and without making a final determination of the liquidator fees, it should have at least tried to address the underlying problems of the situation: that a person who no longer served as liquidator still held custody of the documents, funds and assets of the debtor.

Reorganisation of a business group

A very important milestone for the development of the restructuring practice in the Dominican Republic has been the acceptance of the restructuring procedure of the business group composed of the entities Transporte Duluc (Tradulca), SA; Servicios Petroleros, SA; and AMG, SA. This process is the first of its kind. It is important to note that this is not regulated by the Dominican restructuring law and the court recurred to the interpretation of the law and the application of principles and foreign doctrine and jurisprudence to motivate its decision.

The court considered the three entities an economic group due to the fact that they have common shareholders and managers, have intercompany transactions and operations, and their operations are strictly linked among one another in such a way that they basically depend on each other to operate.

Limits of a merchant to seek reorganisation

Unlike the US Bankruptcy Code, where Chapter 12 allows any individual to benefit from an insolvency proceeding, in the Dominican Republic, the law establishes that for a person to be able to seek a reorganisation request it must be considered a merchant, meaning that it must carry out acts of commerce and make it their usual profession.

The managers of the entities Transporte Duluc (Tradulca), SA; Servicios Petroleros, SA; and AMG, SA filed a request for their own reorganisation which was rejected after considering that they did not meet the criteria to be considered as merchants to ask for their restructuring. In that sense, the court established that there are three elements to be considered when assessing whether a person is a merchant or not: (i) that it carries out acts of commerce; (ii) that this is its principal economic activity; and (iii) that it acts in its own name and without attachment to any other person or company.

Also, the court considered the provisions of the General Law on Companies and Individual Enterprises No. 479-08, which stipulates that the anonymous incorporations will be managed by a board of administrators, whose administrators will be considered as merchants.

Considering this, and the fact that the companies where the claimants served as managers were anonymous incorporations, the court stipulated that their merchant qualification was unquestionable; however, the court indicated that in addition to the above-mentioned, the doctrine recognises that for a person to be legally considered as a merchant, the legal effects of the activities carried out by them should directly affect their heritage, which did not apply in this case because the documents provided by the claimants to support their merchant condition were: (i) loan agreements that were either signed by the claimants in their personal capacity but used for the operations of the companies that were currently undergoing restructuring or where the claimants signed as guarantors of the obligations assumed by the companies; and (ii) a services agreement between the president of the companies and the company to render services for the compliance of the transport agreements signed with their clients.

In relation to the loan agreements, the court set two important precedents: (i) unlike some other jurisdictions such as Argentina, where the guarantors can seek their own restructuring to avoid their guarantee being executed, in the Dominican Republic the guarantors benefit from the stay of proceedings of the law and cannot seek their own reorganisation to simply avoid the execution of their guarantee once the stay of proceedings is lifted; and (ii) if the loans are requested and used for the operations of the companies that are already in restructuring proceedings, thus are attached to such companies, it is understood that they were not obtained by the debtor in the ordinary course of business for their own commercial activities, but rather for the company they manage; hence, cannot be considered as acts of commerce to be considered as a merchant.

On the other hand, in relation to the services agreement, the court indicated that the services were ordinary obligations that any administrator or president of a company would have and for which they should not receive additional compensation. On the contrary, such an agreement would be considered prejudicial to the interests of the companies. Also, the court noted that the claimant did not provide any proof that such agreement was approved by the shareholders of the company as required by law.

Based on this, the court understood that it was not demonstrated that the claimants carried out acts of commerce in their own name, for their own heritage and without attachment to the companies they administered. Furthermore, the court indicated that since those companies were already in a restructuring proceeding, they could not open a new and separate proceeding for their shareholders and administrators when the assets and obligations involved in the latter were already covered in the main proceeding of the companies.

Contradiction between norms solved by the court

In relation to stay of proceedings

In the restructuring proceeding of the entities of the business group composed by the entities Transporte Duluc (Tradulca), SA; Servicios Petroleros, SA; and AMG, SA, one of the debtors of the company executed a pledge over two of the trucks of the company after the commencement of the restructuring proceeding. The trustee in this case filed a claim for the reincorporation of such trucks to the mass of creditors, which was rejected by the court because the execution was performed before the decision was subjected to the publicity measures stipulated in the law: publication for three consecutive days in a national newspaper and on the web page of the court and the Chamber of Commerce.

In that regard, there is certain contradiction between the law and the articles of application of the law. On the one hand, article 54 of Law No. 141-15 states that the restructuring request produces on its own a stay in proceedings that affects all judicial, administrative or arbitral proceedings that affect the assets of the debtor, any enforcement or eviction procedures regarding the debtor’s movable and immovable property, calculation of interest under loans and other credit documents, among others, are suspended until the reorganisation plan is approved or the judicial liquidation is ordered. This stay of proceedings will stand during all the negotiation and conciliation process and will be overturned with the approval of the reorganisation plan or with the judgment that orders the initiation of the judicial liquidation process. On the other hand, article 72 of the articles of application of the law clarifies that the suspensive effects contemplated in the article 54 of Law No. 141-15 will begin to apply from the publication of the resolution of acceptance of the restructuring request.

Since the law is considered a superior norm in relation to its articles of application, there was a lot of confusion as to which provision would be applicable and this was the first scenario where a court addressed this issue. It established that, according to the international accepted doctrine and jurisprudence in the matter, the provisions of the articles of application are the ones to be taken into consideration when determining the exact moment of application of the stay of the proceedings. It also added that the publication of the decision is made once the appointed officer accepts its mandate and, since in this case the execution of the pledge was completed on the same day the trustee accepted its appointment and 16 days before the decision was published in the local newspaper, the stay of the proceedings was not applicable and therefore the trucks could not be reincorporated to the mass.

Even when we understand the ruling of the court to be logical, legal and well motivated, it is important that the courts abide by the time frame stipulated in the law for the publication of the decision that orders the commencement of the restructuring process, which is one business day after the acceptance of the appointment by the trustee, to avoid executions and foreclosures that could affect the mass, as in this case, where the decision was published eight business days after the acceptance by the trustee.

Suspension of adjudication decision in foreclosure procedure

Another topic that was unclear in the law was the application of the stay of proceedings in foreclosure procedures that commenced before the restructuring application was filed. A lot of questions have arisen in this regard since Law 189-11 for the development of the mortgage market and the creation of trusts in the Dominican Republic is a special statute which must comply with the rule of law principle, thus it cannot be waived by the parties. Law No. 189-11 conceives of an expedited procedure for foreclosure with very limited possibilities for appeal and incidents; the only recourse available against a real estate foreclosure decision is to submit a claim against it so it can be declared void. Furthermore, the wording of article 54 of Law No. 141-15 produced more uncertainty as it expressly excluded from the application of the stay of proceedings those processes where there is an adjudication judgment, if it does not apply the criteria for the nullity of transactions provided for in Law No. 141-15.

In the restructuring proceeding of the entities of the business group composed by Transporte Duluc (Tradulca), SA; Servicios Petroleros, SA; and AMG, SA, a foreclosure proceeding following No. Law 189-11 was initiated by the secured creditor before the commencement of the restructuring procedure. Even when the creditor was aware of the stay proceedings applicable pursuant to Law No. 141-15 it continued with the process until the public auction, resulting in the foreclosure of the real estate in favour of a third party. The trustee filed an urgent injunction claim to suspend the execution of such decision, which, after multiple inadmission requests filed by the secured creditor and the adjudicated party, was accepted by the court.

In its decision, the court established very important criteria in this regard. First, it established that the competent court to rule on a claim seeking the suspension of execution of the adjudication judgment that involves a property owned by a debtor in restructuring procedure is the Restructuring Court, which also has exclusive jurisdiction to rule not only the restructuring and liquidation procedures themselves, but also any judicial or extrajudicial action related to the debtor and his or her patrimony, including injunction and constitutional protection. Also, the court clearly established that since Law No. 141-15 came after the enactment of Law 189-11 it applied both the chronological and specialised parameters to decide the conflict of norms that arose in this case.

Finally, according to article 181 of Law No. 141-15, upon initiation of the liquidation procedure, and prior to admission of their claims, creditors with a special privilege of a lien or a mortgage, and the tax administration, may execute their individual rights if the liquidator fails to initiate the liquidation procedure within a period of 45 business days following the date of the judgment that establishes the definitive list of credits.

Recognition of foreign decision (exequatur) procedure required for cross-border insolvency proceedings

Title IV of Law No. 141-15 establishes the legal guidelines and procedures that rule over cooperation on international procedures in the Dominican Republic, which are based on the UNCITRAL Model Law. Even though Law No. 141-15 meets all the necessary requirements for an effective handling of cross-border insolvency cases because it includes a clear and fast process to obtain recognition of foreign insolvency procedures, authorises measures after the recognition of foreign insolvency procedures, allows access to the courts for foreign representatives, calls for collaboration and cooperation between the courts and foreign representatives in cases of multi-jurisdictional insolvency procedures, and does not discriminate between foreign and local creditors, the interpretations made by the local courts are affecting its application.

There are no foreign procedures recognised in the Dominican Republic yet. In 2020, the authors filed the first request of recognition of a foreign liquidation procedure before the local courts. Unfortunately, the court of first instance declared it inadmissible, indicating that the claimant should have completed a process to obtain the enforcement of the foreign judgment that declared open the liquidation process of the German company TMS Dienstleistungs GmbH through an exequatur process according to Law No. 544-14 on international private law.

We submitted an appeal against the decision, which was also declared inadmissible. We then submitted a new request to the court for the recognition of the procedure where we explained that Title IV of Law No. 141-15 fully regulates the mechanisms, procedures and requirements necessary to ensure cooperation in international procedures for commercial restructuring and judicial liquidation, and nowhere in said title, or the rest of the law or the regulation makes any mention of the need to exhaust a prior exequatur procedure in international processes whose recognition is requested in the country.

On the contrary, article 205 of Law No. 141-15 establishes the requirements to submit a request for recognition made by a foreign representative, where it establishes that it must be submitted accompanied by the following:

i) A certificate issued by the foreign Court proving the existence of the foreign procedure and the appointment of the foreign representative; or, in the absence of proof of said accreditation, any other evidence admissible by the Court of the existence of the foreign procedure and the appointment of the foreign representative, to be presented later; ii) A statement in which the data of all open foreign proceedings with respect to the debtor of which the foreign representative is aware are duly indicated; and iii) indicate the domicile of the debtor for the purposes of summons.

Likewise, the article provides that all documents presented in a foreign language in support of an application for recognition must be accompanied by its official translation into Spanish and that the documents that are presented in support of the application for recognition are presumed to be authentic and they must comply with consular provisions or international treaties regarding the legality and acceptance of documents issued abroad – apostille or consular legislation. This requirement was fully complied with in the present case, and was even recognised by the court of first instance in the judgment in question, where it established:

. . . that said documents presented in support of the present request for judicial recognition of liquidation abroad, in principle they are presumed to be authentic, having complied with the apostille and being in accordance with the consular provisions or international treaties regarding the legality and acceptance of documents issued abroad, specifically with the Hague Convention of October 5, 1961.

Furthermore, as we established in our appeal, the request of a prior exequatur process for the recognition of a foreign procedure shows an erroneous interpretation and application of the law by the court and a lack of knowledge of the spirit and purpose of the special regulation in question, which seeks to be expedited and efficient. Furthermore, if we review the draft regulations for the application of Law No. 141-15, it is clearly confirmed that the intention of the legislator was to emulate and not alter the text or spirit of the UNCITRAL Model Law on Cross-Border Insolvency, which was the basis for Chapter IV of Law No. 141-15 that regulates the processes of international cooperation and whose article 15 was practically reproduced by article 205 of Law No. 141-15.

The guide for the incorporation into domestic law and interpretation of the UNCITRAL Model Law established that criteria based solely on the principle of international courtesy or exequatur do not provide the degree of reliability or predictability that can be expected from a special regime, such as the Model Law, in matters of judicial cooperation, recognition of foreign insolvency proceedings and access of foreign representatives to the courts.

Despite the above, the new request was preliminarily accepted, but conditioned to the exequatur procedure being completed before a definitive ruling on its acceptance could be rendered. Unfortunately, considering the client’s interest to expedite the recognition process, instead of appealing the decision we decided to submit the exequatur requests before the court. We are currently awaiting a decision.

We understand it is very unfortunate that the local courts are denaturalising this process by requiring an exequatur when the law expressly indicates the documents that are required for its acceptance. By doing so, the courts are affecting the effectiveness and viability of the cross-border insolvency proceedings.

In conclusion, there are multiple issues to be tended to by the insolvency courts of the Dominican Republic; however, considering the very limited period in which the law has been in effect, it is too soon to talk about established criteria for any specific problems that have arisen so far.


Notes

[1] Seventh Chamber of the Civil and Commercial Chamber of the Court of First instance of the Judicial Department of Santiago acting as Court of Restructuring and Liquidation of First instance. Order No. 975-2019-TREE-00004. File No. 975-2019-EREE-00001. 7 August 2019.

[2] Tenth Chamber of the Civil and Commercial Chamber of the Court of First instance of the Judicial Department of the National District acting as Court of Restructuring and Liquidation of First instance. Order No. 1532-2019-SAUT-00029. File No. 1532-2019-EREE-00005. 12 November 2019.

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