Countries › Paraguay › Guide › 14. Disputes › Mediation and conciliation in Paraguay: voluntary mediation under Ley 1879/2002 and court approved settlements

Mediation and conciliation in Paraguay: voluntary mediation under Ley 1879/2002 and court approved settlements

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Last verified: 2026-10-28 · Status: Stable

Mediation in Paraguay is voluntary and remains governed by articles 53 to 67 of Ley 1879/2002, the only part of that law that survived the 2025 arbitration reform. Any settleable contractual or legal matter can be mediated before or during a lawsuit; a signed mediation record binds the parties and becomes res judicata once approved by the competent judge. Mediation is confidential, mediators cannot later act as arbitrators, witnesses or counsel, and settlements reached before a judge or an arbitral tribunal also have res judicata effect.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation published for Wednesday 28 October 2026. Conversions are for orientation only.

Key facts

Mediation statute	Ley 1879/2002 art. 53 to 67 (arbitration parts repealed by Ley 7561/2025) Ley 1879/2002; Ley 7561/2025 art. 71, as of 2026-10-28 · in force
Pre suit mediation mandatory in commercial cases	No, voluntary Ley 1879/2002 art. 53, as of 2026-10-28 · in force
Days for a centre to appoint a mediator and convene parties	5 business daysLey 1879/2002 art. 59, as of 2026-10-28 · in force
Mediated settlement effect	Binding on signature; res judicata on court approval Ley 1879/2002 art. 61, as of 2026-10-28 · in force
Mediation confidential	Yes Ley 1879/2002 art. 57, as of 2026-10-28 · in force
BCP reference rate used for conversions	5868.31 PYG per USDBCP planilla 28 October 2026, as of 2026-10-28 · in force

The rule

1. What can be mediated and when. Mediation is a voluntary mechanism in which the parties settle their differences themselves with the help of a neutral, qualified mediator. Any matter arising from or linked to a contractual or other legal relationship may be mediated if it can be settled, conciliated or arbitrated. Mediation may take place at any time before a claim is filed or at any stage of a case before a final judgment. A written report by the mediator or mediation centre that the parties attended at least one session has the same legal effects as the conciliation hearing provided in procedural rules. Parties apply jointly or separately in writing to the mediator or centre they choose; unless agreed otherwise the centre appoints the mediator and convenes the parties within 5 business days of the request.
Cost to do it: Centre and mediator fees are set by each centre; the law fixes none.
Example: Two shareholders of a Paraguayan S.A. in a dividend dispute file a joint request with a mediation centre; the centre appoints a mediator and calls them within 5 business days. / A US$200,000 (PYG 1,173,662,000) supply dispute already in court can be mediated at any stage before final judgment.Ley Nº 1879/2002, De Arbitraje y Mediación (mediation chapter kept in force by Ley 7561/2025), Art. 53, 54, 55, 56, 58 and 59, 2002-04-24 official text · verified 2026-10-28

2. Effect of a mediated settlement. The mediation agreement binds the parties once they and the mediator sign the mediation record, and has res judicata effect once approved by the competent judge; if a case is pending, the judge of that case approves it and the approval ends the case. Partial agreements leave the rest for the court. Mediation ends with a signed agreement, a record that no agreement was possible, or a centre certificate that a party failed to attend. Centres keep a register of records and issue authenticated copies.
Cost to do it: Court approval is needed for res judicata effect; counsel time for the approval filing.
Example: A distributor and supplier settle a PYG 1,173,662,000 claim in mediation; once the civil judge approves the record, it can be enforced like a judgment. / If only US$150,000 of a US$200,000 claim is settled, the remaining US$50,000 goes back to court.Ley Nº 1879/2002, De Arbitraje y Mediación, Art. 61, 62 and 64, 2002-04-24 official text · verified 2026-10-28

3. Confidentiality and mediator independence. Mediation is confidential, proposals do not affect later litigation, and the mediator cannot be called as a witness between the same parties or on the same subject. A mediator is barred from acting in any related court or arbitral case as arbitrator, witness, expert, adviser or representative. Mediators must be of recognized integrity, trained in a course given by a mediation centre, disclose circumstances that could raise doubts about impartiality, and can be challenged within 3 days of learning of the appointment.
Cost to do it: No statutory fee; training requirement for mediators.
Example: A mediator who helped two parties in a failed mediation cannot be appointed arbitrator in their later arbitration. / Settlement offers of US$100,000 made in mediation cannot be used as evidence in the later US$200,000 lawsuit.Ley Nº 1879/2002, De Arbitraje y Mediación, Art. 57, 65, 66 and 67, 2002-04-24 official text · verified 2026-10-28

4. Settlements in court and in arbitration. Conciliation agreements made before a judge and approved have res judicata effect and are enforced under the judgment enforcement procedure; a settlement presented to the judge is approved if it meets the legal requirements of a valid settlement. In arbitration, if the parties settle the tribunal ends the case and, if both ask and it does not object, records the settlement as an award with the same effect as any award; settlements approved by an arbitral tribunal are res judicata.
Cost to do it: An award on agreed terms is enforceable in Paraguay and, under the New York Convention, abroad.
Example: Parties to a Paraguayan seated arbitration settle at PYG 586,831,000 and ask the tribunal for a consent award, enforceable without recognition in Paraguay. / A US$100,000 consent award rendered in Asunción can be enforced in other New York Convention states.Ley Nº 1337/1988, Código Procesal Civil; Ley Nº 7561/2025, De Arbitraje, CPC art. 170 and 171; Ley 7561 art. 45, 1988-10-20 official text · verified 2026-10-28

Route	Effect	Source
Mediation record signed	Binding contract	Ley 1879 art. 61
Mediation record approved by judge	Res judicata; ends pending case	Ley 1879 art. 61
Conciliation before a judge, approved	Res judicata; enforced as a judgment	CPC art. 170
Consent award in arbitration	Same as any award	Ley 7561 art. 45

Ways to settle and their legal effect

Worked example

A Paraguayan franchisee and a foreign franchisor dispute PYG 1,173,662,000 (US$200,000) in royalties. Before suing, they mediate at a centre of their choice; the centre appoints a mediator within 5 business days. They settle at PYG 880,246,500 (US$150,000), sign the mediation record and have it approved by the civil judge, making it res judicata and enforceable if the franchisee misses a payment.

Step by step

Add a mediation step to dispute clauses, with a time limit, before arbitration or litigation.
Choose a centre and check its fee schedule.
Sign the mediation record with the mediator and file it for court approval to obtain res judicata effect.
If the case is in arbitration, ask the tribunal for a consent award (Ley 7561 art. 45).

Common traps

Without court approval, a mediated settlement is only a contract, not res judicata (Ley 1879 art. 61).
Mediation does not by itself interrupt limitation under the Civil Code list; protect the claim by acknowledgment or filing (Civil Code art. 647).
Ley 1879/2002 is now only a mediation law; its arbitration articles were repealed by Ley 7561/2025.

Sources

← Limitation periods in Paraguay: civil, commercial, labour and tax claims, and how to stop the clockClaims against the State in Paraguay: administrative appeals, the Tribunal de Cuentas and arbitration of public contracts →

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