Ecuador-UAE Investment Treaty Blocked by Constitutional Court — Must Go Through Congress

The Ruling

Ecuador's Constitutional Court ruled unanimously on March 9, 2026 (source) that President Noboa's Bilateral Investment Treaty (BIT) with the United Arab Emirates cannot be fast-tracked by executive decree and must receive National Assembly approval.

The vote was 9-0 — no dissent.

Why It Was Blocked

The treaty includes investor-state dispute settlement (ISDS) provisions — mechanisms that allow foreign investors to sue Ecuador in international arbitration tribunals rather than domestic courts.

Ecuador's constitution explicitly addresses this:

• Article 422 prohibits treaties that cede sovereign jurisdiction to international arbitration bodies in contractual or commercial disputes with the state
• Article 419(7) requires legislative approval for any treaty that establishes dispute resolution mechanisms culminating in international arbitration
• Ecuadorian voters reaffirmed the ISDS prohibition in an April 2024 referendum after Noboa proposed repealing it (source)

The Backstory

President Noboa issued Executive Decree No. 294 on January 28, 2026 while abroad, authorizing Ecuador's ambassador to sign an "errata sheet" correcting what the government described as "formal and translation errors" in the treaty. Critics argued this was an attempt to modify the treaty's substance without congressional review.

What This Means for Expats

• If you have business interests involving UAE investment in Ecuador, the treaty's investor protections are on hold. The National Assembly must now debate and vote on it — timeline uncertain given the divided legislature
• The broader signal: Ecuador's constitutional framework continues to limit executive power on international investment agreements. This affects not just the UAE treaty but any future BIT negotiations
• For real estate investors: bilateral investment treaties provide protections for foreign investors against expropriation and discriminatory treatment. Without the UAE BIT in force, investments from UAE-based entities in Ecuador lack those treaty-level protections
• Ecuador's investment climate remains a work in progress. The mining reform law, the US trade deal, and the UAE BIT are all pieces of a larger puzzle that the Noboa administration is assembling — but constitutional and legislative constraints slow the process

Sources: Columbia CCSI, Kluwer Arbitration Blog, Primicias