Civil and Commercial Litigation in Puerto Rico

We represent plaintiffs and defendants at trial and on appeal, in the federal and local courts, in arbitration, and before regulatory bodies, with the same preparation whether the matter is tried, mediated or settled.

Contract claims

Most commercial litigation starts with a contract that one side says was broken. We act for claimants and defendants in disputes over supply agreements, distribution and dealership arrangements, services contracts, leases, construction contracts and shareholder agreements.

The early questions are usually the same. What does the contract actually say, as against what the parties assumed. Whether there is a notice provision that has already bitten. Whether the loss can be proved. And whether the dispute is better resolved by negotiation than by a filing. We give a view on all four before costs start to build.

Commercial claims

Beyond the four corners of a contract, we litigate the broader run of commercial disputes: claims between business partners, disputes over the sale of a business, interference with commercial relationships, unfair competition, and claims arising from the collapse of a joint venture. We also act in collections, pursuing commercial debt through to enforcement rather than stopping at a judgment that is never paid.

Arbitration and alternative dispute resolution

Not every commercial dispute belongs in court, and many contracts take the choice away by requiring arbitration. We represent clients in arbitration and in other alternative dispute resolution forums, including mediation, and we bring the same preparation to those proceedings as to a trial. Where a contract is still being negotiated, we advise on whether an arbitration clause serves the client’s interests before it is signed rather than after a dispute arises.

Regulatory proceedings

We represent clients during hearings, investigations and enforcement proceedings before federal and local regulatory bodies. These matters follow their own procedure and their own timetables, and the record built at the administrative stage frequently determines what is available later on judicial review.

Government procurement and bid protests

A separate and specialized part of this practice is challenging the award of public contracts. If a government entity in Puerto Rico awards a bid to somebody else and you believe the process was wrong, you have a very short window to act, and the clock runs from the notice of award rather than from the day you learn the details.

This has its own page because the procedure and the deadlines deserve explaining properly. See government procurement: bid and award protests.

Appellate work

Our appellate practice combines thorough legal research with written and oral advocacy, at both the Puerto Rico Court of Appeals and the Supreme Court of Puerto Rico, as well as in the federal appellate system. An appeal is a different exercise from a trial, and it is usually won or lost on the record made below, which is a reason to involve appellate thinking earlier than most parties do.

Where your case will be heard

Commercial disputes in Puerto Rico are heard in the Court of First Instance, with appeals to the Court of Appeals and, where it takes the case, the Supreme Court of Puerto Rico. Disputes with a federal basis, or between parties from different jurisdictions above the threshold amount, may belong in the United States District Court for the District of Puerto Rico instead.

The choice is not always obvious and it is not always the claimant’s to make. It affects timetable, procedure and often outcome, which is why it is worth taking advice before filing rather than after.

Within the Commonwealth system the island is divided into thirteen judicial regions, each headed by a judicial centre. San Juan is the only one made up of a single municipality. The others gather several, and they do not follow the boundaries people expect: Guaynabo belongs to the Bayamón region, and Trujillo Alto to Carolina, even though both adjoin San Juan.

Our office is in Santurce and most of our litigation runs through the San Juan courts and the federal District Court, but we appear across the island. If you want to know which region and which Property Registry section cover your matter before you call anyone, see the areas we serve.

How long you have to sue

The deadline depends on how the claim is characterised, and the gap between the categories is wide enough to decide cases on its own.

• Four years for contract claims. Personal actions with no term fixed elsewhere, including claims for breach of contract, prescribe in four years (Article 1203 of the Civil Code of 2020).
• One year for tort claims. Extracontractual liability prescribes in one year, running from when you know both the harm and who caused it (Article 1204).
• Three years for distribution claims. Any action under Act 75 of 1964 prescribes in three years from the definitive termination of the distribution contract, or from the acts of impairment (Article 5, 10 L.P.R.A. § 278d).

Two things about this trip people up more than the periods themselves.

The 2020 Code shortened contract claims from fifteen years to four. Under the Civil Code of 1930 a personal action with no special term had fifteen years. The 2020 Code cut it to four. Where a period was already running when the new Code took effect it keeps the old duration, but if it is interrupted after that date the new duration applies (Article 1814). For older contracts that distinction is the whole case.

A demand letter does not always stop the clock. For ordinary civil claims it does: prescription is interrupted by suit, by an administrative or arbitral claim, by an extrajudicial claim from the creditor to the debtor, or by the debtor acknowledging the obligation, and the full period then starts again (Article 1197).

Act 75 claims are the exception, and it is an expensive one. Because the Supreme Court of Puerto Rico has held that Act 75 is mercantile in character, the Code of Commerce rules on interruption apply instead. Under those rules only a judicial claim, acknowledgement of the debt, or renewal of the instrument will interrupt. An extrajudicial demand does not interrupt the three-year term. A dealer who spends three years writing letters, and taking comfort from them, can arrive at court with nothing left.

Distribution and Act 75 claims

Act 75 of 1964 protects dealers and distributors in Puerto Rico against termination or impairment of the relationship without just cause, whatever the contract says about either party being free to walk away. The protection is a matter of public policy and cannot be waived, and the statute is to be read liberally in favour of whoever actually carries out the distribution, regardless of the corporate or contractual structures put around it.

We act on both sides. For dealers whose relationship has been terminated, narrowed, or quietly eroded through pricing, territory or supply, and for principals who need to end or restructure a distribution relationship without creating a claim. The three-year clock and the interruption rule above make early advice worth more here than in almost any other commercial dispute.

Litigation is not always the answer

We say this to clients more often than they expect. A commercial dispute is a business problem with a legal dimension, not the other way around. Sometimes the right advice is to settle early, to renegotiate, or to walk away from a claim that would cost more to win than it is worth. The firm was founded in part to give businesses large-firm litigation capability at cost-efficient rates, and that includes being honest about when not to litigate.

Common questions