National Congress Passed Law No. 26,853 that Creates Courts of Cassation and Provides for New Appeal Remedies

On May 17, 2013, the same day as its publication in the Official Gazette, Law No. 26,853 (the “Law”) entered into force. Once the Courts of Cassation created by it are set up, it will immediately be applied to pending lawsuits.

This is the second law passed pertaining to the Judicial Reform pack submitted by the Executive Branch at the beginning of April of this year. The first bill approved was Law No. 26,854 which limits injunctions against the Government, and was commented in Marval News #127 (see New Law is Passed to Limit Injunctions against the Federal Government).

The Law establishes amendments to the National Civil and Commercial Procedural Code (the “CCPC”) and Decree Law No. 1285/1958 of Reorganization of the National Justice.

I. Main Provisions

Below is a brief account of the main provisions of the Law.

1. Establishment of the Courts of Cassation

The Law creates (i) the Federal Court of Cassation in Contentious Administrative Federal Matters, (ii) the Federal and National Court of Cassation on Labor and Social Security Matters; y (iii) the Federal and National Court of Cassation in Civil and Commercial Matters. All of these Courts will have their seat in the City of Buenos Aires.

The Courts of Cassation will decide on the appeal remedies of cassation, unconstitutionality, and revision filed against final judgments issued by National and Federal Courts of Appeal with jurisdiction on these subject matters.

The Courts will be comprised of seven members and will work divided into two tribunals of three members each. The role of chair will be exercised by the remaining member, chosen by his or her fellow judges. The chairman’s term of office will be two years.

A tribunal’s decisions will be issued by the absolute majority of the votes of judges which comprise it.

The judges will be appointed in accordance with the applicable regulations on the matter. However, the Law establishes that when considered necessary, abbreviated procedures for their appointment may be established. Until the Courts of Cassation’s judges are duly appointed, they will be temporarily comprised of substitute judges.

2. Cassation, Unconstitutionality and Revision Appeal Remedies

The Law amends Sections 288 to 301 of the CCPC, establishing the cassation, unconstitutionality, and revision appeal remedies described below, and abolishes Sections 302 (calling to “en banc” decision) and 303 (compulsoriness of “en banc” rulings) of the CCPC.

This appeal remedy may be filed against (i) final rulings or decisions equivalent to those issued by a Court of Appeals; (ii) resolutions that decide on the suspension of the effects of Government acts or other injunctions against public authorities; and (iii) decisions that dismiss contentious administrative petitions (“CCPC’s Section 288 Resolutions”).

The grounds for the appeal remedy shall be one of the following: (i) disregard or erroneous application or construction of substantive law; (ii) disregard of essential procedural formalities; (iii) unification of case law, when different precedents exist regarding substantially similar facts, grounds, and petitions; and (iv) arbitrariness.

It must be initiated with the court that issued the resolution that prompts it, within the following ten days of its service. The counterparty will then have ten days to respond.

Upon submission of the brief of response to the cassation appeal remedy, or once the term is expired, the court will grant leave to appeal or not. If the court grants it, the docket is submitted to the relevant Court of Cassation. Granting leave to appeal will suspend the execution of the challenged decision.

If the court does not grant leave to appeal, the petitioner may file a direct appeal (“queja”) to the relevant Court of Cassation, in accordance with the procedure established in Section 282 of the CCPC.

Once the docket is received by the Court of Cassation, and after the Public Prosecutor has reviewed it, the Court has to issue a final decision within the following eighty days. In the event the issue is objectively urgent, this term can be cut by half. Once this term has expired, the parties may file a petition of expedite procedure and the Court will have to issue a final decision within the following ten days.

If disregard of essential procedural formalities is upheld by the Court, it will vacate the judgment. The docket will be remanded to the corresponding lower court for further proceedings.

In all the other cases in which the Court admits the appeal remedy, it will quash the judgment and resolve the case in accordance with the law and legal case law it declares applicable.

The unconstitutionality appeal remedy can be filed against CCPC’s Section 288 Resolutions when (i) the constitutionality of a law or regulation that governs Argentine Constitutional matters is questioned and the ruling is contrary to the petitioner’s allegations; or (ii) the construction of one of the Argentine Constitution’s clauses is challenged and the judgment disregards the validity of the right or the guarantee in question.

The unconstitutionality appeal remedy will be conducted in accordance with the proceedings established for the cassation appeal remedy.

This appeal remedy may be filed against CCPC’s Section 288 Resolutions when issued as a consequence of malfeasance of office, bribe, violence, or fraud, held by an irreversible subsequent ruling.

It must be filed in writing with the corresponding Court of Cassation within the following thirty days that the party became aware of the fact or of the subsequent ruling, a copy of which has to be attached to the brief.

In no case will this appeal remedy be admitted three years after the issuance of the challenged ruling.

In general, the granting of leave to appeal in this case will not suspend the questioned judgment. However, if the party petitions it, -and in the light of the special circumstances of the case-, the intervening Court may order the suspension of the enforcement of the ruling. A prior bond for court costs and damages that can be caused by the suspension must be posted by the petitioner.

The Court of Cassation can declare the challenged ruling void, ordering a retrial, or it can directly pass final judgment on the merits.

The revision appeal remedy will be conducted in accordance with the proceedings established for the cassation appeal remedy, with the exception of the rules which are incompatible to its own specific regulation.

II. Final Comments

The Law creates the possibility of accessing a fourth procedural instance in lawsuits dealt by national and federal courts. It is our belief that this could mean a further extension of judicial procedures, already considered lengthy. On the other hand, the abbreviated procedures to appoint judges have already been publicly criticized, among other issues that could be considered controversial.

Lastly, it has been disclosed to the press that unconstitutionality actions against the Law will be filed. We will have to wait until these hypothetical actions are ruled on to have a better idea of this Law’s scope.