Supreme Court of Justice sets new criterion on contractual simulation 

The First Chamber of the Supreme Court of Justice (SCJ) revised its position on contractual simulation, ruling that when one of the parties to a contract claims that the agreement is uncertain, the primary evidence of this type of dispute is the counterstatement. 

The Judgment SCJ-PS-23-1546 dated The July 28 ruling of the aforementioned Chamber explains that, as a general rule, such evidence must be submitted in writing and not through witnesses. 

The legal principle abandoned by the Civil and Commercial Chamber of the Supreme Court of Justice held that, with regard to proof of simulation, case law has relaxed the strict requirements of Article 1341 of the Civil Code (regarding testimonial evidence), allowing both the parties and third parties to prove its existence through various means. 

“In this regard, legal doctrine holds that a sham contract or simulated agreement must be established in accordance with the ordinary rules governing the proof of legal acts, which implies that, if the apparent contract has been made in writing, the existence of the secret act must also be proven by written evidence, since the aim is to prove something beyond or contrary to what is established in the written document,” the ruling states. 

The Civil Chamber of the SCJ held that the court had misapplied the law by basing its decision on testimonial evidence, without adhering to the strict standard of proof established in Article 1341 of the Civil Code or duly justifying that this constituted an exception permitted by law, as well as by declaring the contract at issue in the lawsuit null and void, without recognizing in its operative portion the legal validity of the loan agreement, which, in its view, reflected the true intent of the parties. 

Based on the arguments set forth, the First Chamber of the Supreme Court of Justice, acting as a court of cassation, upheld the annulment of the contested judgment, that is, Civil Judgment No. 627-2022-SSEN-0061 rendered by the Court of Appeals of the Judicial Department of Puerto Plata, limiting the scope of the remand to the specified area so that the answer may be reconsidered. .  

For the full text of the ruling issued by Judges Pilar Jiménez Ortiz (presiding), Justiniano Montero Montero, Samuel Arias Arzeno, and Napoleón Estévez Lavandier, please click on the following link:

The First Chamber of the Supreme Court of Justice (SCJ) revised its position on contractual simulation, ruling that when one of the parties to a contract claims that the agreement is uncertain, the primary evidence of this type of dispute is the counterstatement. 

Judgment No. SCJ-PS-23-1546 dated The July 28, 2023, ruling of the aforementioned Chamber explains that, as a general rule, such evidence must be submitted in writing and not through witnesses. 

The legal precedent abandoned by the Civil and Commercial Chamber of the Supreme Court of Justice held that, with regard to proof of simulation, case law has relaxed the strict requirements of Article 1341 of the Civil Code (regarding testimonial evidence), allowing both the parties and third parties to prove its existence through various means. 

“In this regard, legal doctrine holds that a sham contract or simulated agreement must be established in accordance with the ordinary rules governing the proof of legal acts, which implies that, if the apparent contract has been made in writing, the existence of the secret act must also be proven by written evidence, since the goal is to prove beyond or contrary to what is established in the written document,” the ruling states. 

The Civil Chamber of the SCJ held that the court had misapplied the law by basing its decision on testimonial evidence, without adhering to the strict standard of proof established in Article 1341 of the Civil Code or duly justifying that this constituted an exception permitted by law, as well as by declaring the contract at issue in the lawsuit null and void, without recognizing in its operative portion the legal validity of the loan agreement, which, in its view, reflected the true intent of the parties. 

Based on the arguments set forth, the First Chamber of the Supreme Court of Justice, acting as a court of cassation, upheld the annulment of the contested judgment, that is, Civil Judgment No. 627-2022-SSEN-0061 issued by the Court of Appeals of the Judicial Department of Puerto Plata, limiting the scope of the remand to the specific matters set forth so that the answer may be reconsidered.  

For the full text of the ruling issued by Judges Pilar Jiménez Ortiz (presiding), Justiniano Montero Montero, Samuel Arias Arzeno, and Napoleón Estévez Lavandier, please click on the following link: https://poderjudicial.gob.do/wp-content/uploads/2023/11/SCJ-PS-23-1546.pdf 

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