El Salvador Mass Trials and Rule-of-Law Risk: What Global GCs Must Know About Contract Enforceability

Why El Salvador's Mass Trials Are a Contract Risk Event, Not Just a Human Rights Story

El Salvador's rule-of-law situation has moved beyond a human rights concern and into territory that general counsel and law firms must treat as a live contract risk. Since the start of 2026, Salvadoran courts have been conducting mass trials in which hundreds of defendants are convicted simultaneously, with Human Rights Watch noting that proceedings rely on uncorroborated evidence and give defendants no meaningful opportunity to prepare a defence. For GCs with operations, suppliers, or counterparties in El Salvador, the question is no longer abstract: when a judicial system cannot guarantee basic procedural fairness, what does that mean for the enforceability of your contracts?

This article examines the legal and regulatory dimensions of the situation, identifies the contract provisions most exposed, and outlines the steps global legal teams should take now.

What the Human Rights Watch Report Actually Establishes

Human Rights Watch has formally condemned proceedings that convict large groups of defendants at a time under conditions that breach international fair trial standards. The organisation's Americas director, Juanita Goebertus, has characterised the trials as a systemic failure rather than isolated incidents. This matters legally because it goes to the institutional integrity of the Salvadoran court system as a whole, not merely to particular verdicts.

For contract law purposes, the significance is this: a jurisdiction in which courts routinely fail to apply procedural safeguards is a jurisdiction in which the rule of law, as a functional system, is impaired. Commercial contracts depend on courts being able to interpret and enforce agreements impartially. When that capacity is structurally compromised, every contract connected to that jurisdiction carries elevated risk.

Governing Law and Dispute Resolution Clauses Under Pressure

The most immediate contract review question for GCs is whether any existing agreements designate El Salvador as the governing law or the seat of arbitration or litigation. Contracts that submit disputes to Salvadoran courts are now exposed to a forum that international observers regard as procedurally unreliable.

Even contracts that do not name El Salvador as the governing law can be affected. If performance obligations require actions within El Salvador, such as supply chain activities, construction, or financial transactions, the practical enforceability of remedies depends on local court cooperation. An arbitral award obtained elsewhere may be difficult to enforce against Salvadoran assets if local courts decline to recognise it or apply selective enforcement standards.

GCs should audit their contract portfolios for three things: governing law clauses that specify El Salvador, jurisdiction and venue clauses that submit disputes to Salvadoran courts, and enforcement provisions that depend on Salvadoran judicial cooperation. Where these exist, the priority is to understand the renegotiation or amendment options available.

Force Majeure, Material Adverse Change and Rule-of-Law Triggers

A less obvious but equally important exposure sits in force majeure and material adverse change clauses. Most standard force majeure provisions list events such as war, natural disaster, and government action. Fewer explicitly address the breakdown of the rule of law or the loss of judicial due process as a triggering condition.

In jurisdictions experiencing genuine institutional deterioration, a well-drafted MAC clause can provide an exit or renegotiation right. GCs reviewing El Salvador-connected contracts should check whether their MAC definitions are broad enough to capture systemic judicial failure, or whether they are limited to narrower economic or financial changes. For new contracts, this is the moment to draft force majeure language that expressly references sustained failure of judicial due process as a qualifying event.

Human rights due diligence clauses, increasingly required under frameworks such as the EU Corporate Sustainability Due Diligence Directive, add another layer. Contracts with suppliers or partners operating in El Salvador may need to be reviewed for compliance with due diligence obligations, particularly where those partners are exposed to the justice system in ways that could implicate forced labour or arbitrary detention concerns.

Human Rights Due Diligence Obligations and Supplier Contracts

Global companies operating under mandatory human rights due diligence regimes must assess whether their El Salvador supply chains create legal exposure. The EU CSDDD, the UK Modern Slavery Act, and analogous frameworks in France and Germany require companies to identify and mitigate human rights risks in their value chains. A supplier whose workforce is vulnerable to arbitrary detention under a mass-trial system is a supplier that creates reportable risk.

This is not a theoretical concern. Where employees or contractors of a supplier are detained without proper process, operations can be disrupted and liability can follow. Supplier agreements should include contractual representations about compliance with internationally recognised human rights standards, audit rights, and termination triggers linked to sustained human rights violations.

Practical Steps for General Counsel and Law Firms Right Now

The following sequence of actions is appropriate for legal teams with El Salvador exposure.

First, conduct a targeted contract audit to identify all agreements with Salvadoran governing law, venue, or significant performance obligations within the country. Second, assess each contract's force majeure, MAC, and termination provisions against the current risk profile. Third, review supplier contracts for human rights due diligence adequacy and consider whether enhanced audit clauses or stepped termination rights are warranted. Fourth, monitor the situation through credible sources, including HRW, the UN Office of the High Commissioner for Human Rights, and the US State Department, for further deterioration or any legislative changes that affect commercial law. Fifth, engage local counsel with independence from the current political environment to advise on practical enforceability.

AI-powered contract lifecycle management platforms can accelerate this process by scanning existing contract repositories for governing law and dispute resolution clauses, flagging provisions that are most exposed, and generating redlined amendments aligned with a company's preferred standards across multiple jurisdictions simultaneously.