{"id":17054,"date":"2026-04-21T18:47:53","date_gmt":"2026-04-21T16:47:53","guid":{"rendered":"https:\/\/www.iisd.org\/itn\/?p=17054"},"modified":"2026-04-21T18:47:53","modified_gmt":"2026-04-21T16:47:53","slug":"ecuadors-constitutional-court-blocks-executive-fast-track-of-uae-bit-requiring-parliamentary-approval","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2026\/04\/21\/ecuadors-constitutional-court-blocks-executive-fast-track-of-uae-bit-requiring-parliamentary-approval\/","title":{"rendered":"Ecuador’s Constitutional Court Blocks Executive Fast-Track of UAE BIT, Requiring Parliamentary Approval"},"content":{"rendered":"

On March 9, 2026, Ecuador’s Constitutional Court<\/a> ruled that the UAE-Ecuador BIT<\/span>\u2014concluded by executive decree\u2014cannot be fast-tracked and requires National Assembly approval because it contains ISDS<\/span><\/span> clauses. The ruling follows<\/a> a 2024 national referendum in which Ecuadorian voters rejected a constitutional amendment to Article 422 that would have facilitated ISDS inclusion in Ecuador\u2019s treaties. In a follow-up substantive ruling<\/a> on March 30, 2026, the Court found the BIT\u2014which includes an ISDS provision\u2014broadly compatible with the Constitution, provided the ISDS provision is amended to expressly exclude contractual and commercial disputes from the scope of investor-state arbitration. Once that fix is made, the treaty returns for final constitutional sign-off before ratification proceeds. The Court expressly departed from its own 2023 precedent in the Costa Rica free trade agreement (FTA<\/span>) case. In that earlier ruling, investment disputes were treated as contractual in nature, leading the Court to conclude that ISDS conflicted with Article 422 of the Constitution, which prohibits Ecuador from submitting contractual or commercial disputes with private parties to international arbitration. In the new decision, the Court made a distinction between treaty-based claims and contractual claims. Claims arising from BIT standards such as fair and equitable treatment or expropriation derive from international obligations, not from contracts with investors. The practical implication is significant. By requiring only the exclusion of contractual and commercial disputes, the Court signals that treaty-based ISDS may be compatible with Article 422, provided it is carefully circumscribed. That interpretation narrows the constitutional barrier that had emerged after the Costa Rica decision. Two judges, Alejandra C\u00e1rdenas Reyes and Al\u00ed Lozada Prado, dissented, suggesting the shift within the Court was not without controversy. At the same time, Ecuador and the EU<\/span> started negotiations towards EU-Ecuador Sustainable Investment Facilitation Agreement<\/a>\u2013a new generation agreement that does not feature investment protection and ISDS.<\/p>\n