Latvia’s arbitration reform has introduced important legal safeguards, but questions remain about the consistent application of the reformed framework and the effectiveness of its implementation. FICIL calls for a review of the existing oversight framework for arbitration institutions, consistent judicial application of the new rules and systematic monitoring of the reform’s practical impact.
A predictable and effective system for resolving commercial disputes is an important part of the business environment on which investors rely. Arbitration can offer businesses flexibility and an alternative to proceedings before state courts, but its value depends on the quality of proceedings, impartiality, clear procedural safeguards and confidence that disputes will be resolved reliably.
The amendments to Latvia’s arbitration framework, which entered into force on 4 July 2024, introduced important changes, including a mechanism for setting aside domestic arbitral awards. The amendments followed the Constitutional Court’s judgment of 23 February 2023 concerning the right to a fair trial.[1] However, the reform’s effectiveness depends on consistent application of the new rules, compliance with professional standards and the ability to identify and address implementation gaps.
Inconsistent application of the new framework can undermine legal certainty
Recent legal analysis of Latvia’s reformed arbitration framework has examined the practical application of the statutory grounds for setting aside arbitral awards and identified questions concerning their interpretation and consistent application.[2][3] The analysis highlights the importance of developing a coherent body of judicial practice that clarifies how the new provisions should be applied.
Court oversight must provide effective protection where fundamental procedural safeguards have not been respected, while remaining within the limits established by law and avoiding a review of the merits of arbitral awards. A clear and consistent approach is essential to maintaining the distinction between legitimate judicial oversight and a reassessment of the substance of an arbitral dispute.
Greater accessibility of anonymised court decisions, opportunities for judges to exchange experience and targeted professional development could support more consistent interpretation of the reformed framework. These measures would also help businesses and legal practitioners better understand the applicable standards, anticipate potential legal risks and make informed decisions about using arbitration to resolve commercial disputes.
Stronger Oversight and Systematic Monitoring Are Needed to Build Business Confidence
Business confidence in arbitration depends on the quality, impartiality and reliability of the institutions administering proceedings. Insufficient oversight or inconsistent professional standards may undermine confidence in arbitration as a means of resolving commercial disputes. Effective oversight, clear professional standards and transparent accountability are essential to maintaining credibility. Systematic monitoring of the reform would help identify implementation gaps, assess whether safeguards work in practice and determine where further action is needed.
“Predictable dispute resolution is important to investors. Stronger oversight and evaluation of the reform’s practical impact would help businesses assess legal risks and support confidence in arbitration as an alternative to state courts”, says Daiga Ziviņa, the Leader of FICIL Court Efficiency & Digitalisation subgroup.
FICIL Calls for Stronger Oversight and Greater Accountability
The Foreign Investors Council in Latvia (FICIL) calls on the responsible institutions to focus on three priorities:
- Review the effectiveness of existing framework for arbitration institutionsby assessing whether the existing statutory requirements, monitoring powers and enforcement mechanisms are sufficient, and identifying where regulatory changes may be needed.
- Promote consistent judicial application of the reformed frameworkby improving access to anonymised court decisions and supporting professional exchange on the interpretation of the statutory grounds for setting aside arbitral awards.
- Evaluate the practical impact of the reformby identifying recurring implementation issues, assessing whether the new safeguards work as intended and determining where further guidance or legislative amendments are needed.
The success of arbitration reform should be measured by whether the system works reliably in practice and earns the confidence of businesses. Effective oversight, consistent legal standards and systematic monitoring are essential to establishing arbitration as a credible mechanism for resolving commercial disputes and strengthening investment protection in Latvia.
Sources:
[1] Constitutional Court of Latvia, Judgment of 23 February 2023 in Case No. 2022-03-01, https://www.satversmestiesa.lv/lv/ierosinatas-un-izskatitas-lietas/lieta-nr-2022-03-01. See also: Law of 20 June 2024, Amendments to the Civil Procedure Law, Latvijas Vēstnesis, No. 119, 20 June 2024, https://www.vestnesis.lv/op/2024/119.4. The amendments to the Arbitration Law and the Civil Procedure Law entered into force on 4 July 2024.
[2] Egija Rubene, “Šķīrējtiesas spriedumu atcelšanas institūts Latvijā: pieredze un nākotnes perspektīvas”, Jurista Vārds, 21 October 2025, No. 42 (1412): https://juristavards.lv/zurnals/287307-skirejtiesas-spriedumu-atcelsanas-instituts-latvija-pieredze-un-nakotnes-perspektivas/
[3] Krista Caune and Elvita Rizena, “Šķīrējtiesu regulējums pēc reformas: tiesu prakses izvērtējums”, Jurista Vārds, 8 September 2026, No. 9 (1427): https://juristavards.lv/zurnals/287929-skirejtiesu-regulejums-pec-reformas-tiesu-prakses-izvertejums/