In brief: key legal issues for project finance transactions in Dominican Republic

Government authorities

What are the relevant government agencies or departments with authority over projects in the typical project sectors? What is the nature and extent of their authority? What is the history of state ownership in these sectors?

The relevant government agencies or departments with authority over projects in the typical project sectors are:

• oil and gas: the Ministry of Industry and Commerce regulates, supervises and controls the distribution, importation and commercialisation of oil and gas in the Dominican Republic; however, the Ministry of Energy and Mines regulates the exploration, exploitation, extraction and policies concerning these natural resources;
• mining: the Ministry of Energy and Mines is the governing body in charge of overseeing mining activities in the country and granting exploration, exploitation and extraction permits and concessions to private parties. The Ministry of the Environment and Natural Resources also grants environmental licences and permits to mining projects in the country;
• chemical refining is regulated by the Ministry of Public Health, the Ministry of Environment and Natural Resources, and the Ministry of Energy and Mines;
• water is regulated by the National Institute of Potable Water and Sewerage (INAPA), the General Directorate of Water Resources and each city’s local water and sewer system administrator;
• tourism and Real Estate development is regulated by the Ministry of Tourism, and the Ministry of Environmental and Natural Resources;
• free Zones are under the authority of the National Free Zones Council and Association of Free Zones (ADOZONA);
• the energy sector is regulated by the General Electricity Law 25-01 and the government entities in charge of regulating the sector are the Superintendence of Electricity, the National Energy Commission and the Dominican National Electrical Corporation (CDEEE), with the Ministry of the Environment and Natural Resources and the Ministry of Energy and Mines being involved in granting licences and permits to energy projects in the country;
• the transportation sector is divided into three subsectors:
  • ground transportation is regulated by the INTRANT (National Institute of Transit and Ground Transportation);
  • air transportation is regulated by the National Institution of Civil Aviation; and
  • maritime transportation, regulated by the Dominican Navy and the National Authority for Maritime Affairs;
• ports and public construction projects are under the authority of the Ministry of Public Works, the Dominican Port Authority and the Dominican Navy, with the Ministry of the Environment and Natural Resources also granting environmental licences and permits in this sector; and
• telecommunications: the Dominican Telecommunications Institute is in charge of telecommunication projects.

Legal issues of general application

What government approvals are required for typical project finance transactions? What fees and other charges apply?

Government approval of project finance transactions is only required in certain sectors, such as in free zones, telecommunications, energy, mining, and port concessions.

Must any of the financing or project documents be registered or filed with any government authority or otherwise comply with legal formalities to be valid or enforceable?

All security agreements must be executed or translated into Spanish, notarised, and registered. If executed abroad, agreements must be apostilled.

The financing agreement only needs to be translated if it will be enforced pursuant to local laws

How are international arbitration contractual provisions and awards recognised by local courts? Is the jurisdiction a member of the ICSID Convention or other prominent dispute resolution conventions? Are any types of disputes not arbitrable? Are any types of disputes subject to automatic domestic arbitration?

The Dominican Republic has been a member of the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards since 2001. Also, the country is a signatory since 2008 to the Inter-American Convention for International Commercial Arbitration. Local courts are bound to recognise arbitration agreements as well as the mandatory referral of disputes relating to these agreements to arbitration.

According to the arbitration law, Law 489-08, matters of public order cannot be judged in arbitration; neither can parties enter into arbitration matters that cannot be part of a private settlement, such as cases about family law (divorce, child support and alimony), foreclosure procedures, land litigation (related to the matters of the Land Law), criminal cases, etc.

According to Law 489-08, judicial enforcement of foreign arbitral awards is subject to a court order, called an exequatur, issued by local courts. The main requirements for the Dominican courts to grant an exequatur are that the legal requirements in the country of origin have been correctly applied and that the ruling has been authenticated, apostilled and has complied with the formalities required by the law of origin.

Which jurisdiction’s law typically governs project agreements? Which jurisdiction’s law typically governs financing agreements? Which matters are governed by domestic law?

As a result of the principle of contractual freedom, and according to Law 544-14, foreign law may be chosen as the applicable law to an agreement to the extent that such a choice of law is not contrary to public policy. New York law and the laws of England and Wales are frequently chosen for finance agreements.

As for matters governed by domestic law, securities involving real estate assets and movable assets collaterals located in the Dominican Republic are subject to Dominican law as a matter of public policy order, although overlying credits agreements can be subject to foreign law.

Is a submission to a foreign jurisdiction and a waiver of immunity effective and enforceable?

Yes. However, judgments from foreign jurisdictions are not enforceable in the country until the Civil and Commercial Chamber of the National District’s Court of First Instance authorises their validity and enforceability in the Dominican Republic via the exequatur previously.

Environmental, health and safety laws

What laws or regulations apply to typical project sectors? What regulatory bodies administer those laws?

Law stated date

Give the date on which the information above is accurate.

6 June 2020.