Trade and Commercial Law Assessment - Honduras - Economic ...

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TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS ♦ Suspending, for disciplinary reasons, and dismissing officials it appointed for misconduct or gross negligence in the performance of their duties. The Supreme Court also considers appeals from the cases heard in the first instance by the courts of appeal. b. Commercial Law and Procedure The civil procedure section of the 1906 Code of Procedure governs civil and commercial litigation, except in cases involving enforcement of pledges. The 1950 Commercial Code provides for enforcement through direct sale by a notary, sales agent, or two merchants, if the contracting parties have so agreed. The civil procedures portion of the Code of Procedures is said to be obsolete; and, of course, it is to be expected that any procedural code that it almost 100 years old would be obsolete in many respects. The reform desired by many involves not merely updating the existing model, but converting to a new approach. Specifically, this will involve a switch to an oral procedure. Latin American countries have traditionally followed the written procedure adopted from Spain. Honduras, however, has switched in criminal cases to an oral procedure. Part of the critique of the existing civil procedures involves advocacy of a similar move to an oral procedure in the expectation that this will speed the process. One way in which the current civil procedures are viewed as obsolete is its establishment of time limits that are routinely disregarded by the courts. The failure of judges to adhere to time limits, however, points less to a technical problem that can be solved by legislation than to more fundamental administrative problems in the judicial system. Arbitration 1. The Constitution Article 15 of the Honduran Constitution states, “Honduras proclaims as ineludible the validity and obligatory execution of arbitral and judicial awards of an international character.” Under Article 16, international treaties are part of domestic law without any implementing legislation. Article 137 of the Constitution provides “…an obligation to promote, organize and regulate conciliation and arbitration procedures for the peaceful settlement of labor disputes.” 2. Legislation A new law on arbitration, Decree No. 161-2000, was approved in 2000. This law is modeled on the law of Colombia. It provides for arbitration organized by arbitration centers. The law also authorizes chambers of commerce, professional associations, trade associations, and institutions of higher education to organize such centers. To date, only two centers have opened, one in Tegucigalpa and another in San Pedro Sula, both operated by the chamber of commerce. Notaries are also able to organize arbitrations on their own. VII-3
TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS C. IMPLEMENTING INSTITUTIONS A Report on the Honduran Judiciary issued in October 2003 by the International Commission of Jurists (ICJ) and the Centre for the Independence of Judges and Lawyers (CIUL) “…found that the most serious problem facing the Honduran judiciary and legal profession is their extreme politicization.” 82 That report did recognize that recent reforms had established new procedures for nominating judges and had lengthened the term of members of the Supreme Court to extend beyond that of a single administration. Those changes, however, do not address conditions that are inconsistent with judicial independence: (a) judges are elected by the legislative body, rather than being appointed by the executive power, subject to confirmation; (b) their appointment is for a term of years, rather than for life; and (c) the Supreme Court issues advisory opinions on pending legislation. The Supreme Court may be more insulated from political influence from Congress, because its longer, 7-year, term overlaps the 4-year terms of the President and the Congress. However, interviewees claim that a degree of political influence is perceived to be exerted on the judiciary. The Supreme Court has the power to appoint magistrates, judges, public prosecutors, and others. Article 319 (9) of the Constitution formally protects the independence of the lower court judges, specifically providing that they “may not be removed, suspended, transferred or retired except” for cause. However, in practice, judges are generally ordered to transfer to other positions following elections. Routinely, they resign rather than remove to another locale. D. SUPPORTING INSTITUTIONS Lawyers and Notaries The ICJ/CILJ report stated that politicization improperly influences the legal profession. That 2003 report, in fact, was issued by a fact-finding team responding to a confrontation that had occurred between the Colegio and the Supreme Court. In this conflict, members of the Colegio had called for the resignation of all members of the Supreme Court. The lawyers were demanding that the Supreme Court give up its powers to appoint notaries. In Honduras, the practice of law requires only graduation from an approved law school. To be a notary, a lawyer must pass an oral examination before members of the Supreme Court. Although there are approximately 10,000 lawyers in Honduras, there are only about 3,000 notaries. The complaint against the Supreme Court was that the notary examination was unfair and political. It was said that members of the Supreme Court were able to and did decide to admit or deny lawyers to the notary on a political basis. This politicization was facilitated by the face-to-face oral examination process, in which the judges could ask virtually any question related to the law. In this forum, the judges effectively could pass or fail candidates on an arbitrary basis. The notary profession is quite lucrative. According to Honduran attorneys interviewed for this assessment, the law requires the signature of a notary in many situations of questionable necessity. Notaries charge a percentage of the transaction amount. 82 http://www.icj.org/news.php3?id_article=3103&lang=en. Visited 9/17/04. VII-4
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