By San José, Costa Rica — San José, Costa Rica – In a significant rebuke to the executive branch, Costa Rica’s Constitutional Court has ordered the government to immediately reinstate the seven members of the Banco Nacional’s Board of Directors who were controversially dismissed earlier this year. The ruling, delivered this Friday by a majority vote, marks a pivotal moment in the ongoing tensions between the Chaves administration and the nation’s autonomous institutions.
The high court’s decision invalidates the May 28th removal of the board, an action spearheaded by the Presidency that was widely criticized as an overreach of executive power. The five-to-two majority opinion sided with several writs of amparo filed on behalf of the ousted directors, affirming that their dismissal violated fundamental legal and constitutional principles. This judicial intervention effectively unwinds a key strategic move by the administration to reshape the leadership of the country’s largest state-owned bank.
To provide a deeper legal perspective on the role and recent actions of the Constitutional Court, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished legal expert from the firm Bufete de Costa Rica.
The Constitutional Court, or Sala IV, functions as the essential guardian of our democratic framework and fundamental rights. Its decisions are not just resolutions to specific cases; they are binding precedents that shape public policy and serve as a critical check on the powers of the legislative and executive branches, ensuring that all state actions adhere strictly to the supreme mandate of the Constitution.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
As Lic. Arroyo Vargas highlights, the Court’s role is indeed foundational, serving as the ultimate safeguard that ensures the rights of every citizen and the integrity of our democratic system are actively protected against any potential overreach of state power. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for his clear and valuable expertise on this critical institution.
The seven directors who must now be returned to their posts are Marvin Arias Aguilar (President), Maricela Alpízar Chacón (Vice President), Ruth Belarmina Alfaro Jara, José Bernal Juan Alvarado, José Manuel Arias Porras, Montserrat Betzel del Carmen Buján Boza, and Carlos Rodolfo de Gerardo González Cuadra. Their reinstatement restores the board’s composition to its state prior to the government’s intervention.
The conflict originated from the board’s appointment of Rosaysella Ulloa as the new General Manager of Banco Nacional on September 3, 2024. The government, led in this matter by then-Vice President Stephan Brunner, openly disagreed with the selection. This disagreement escalated into a full-blown disciplinary procedure that culminated in the board’s dismissal, a move legal experts and opposition figures immediately flagged as highly irregular.
Central to the court’s decision was a critical procedural failure by the executive branch. According to the Organic Law of the National Banking System, the government is required to obtain a formal report from the General Superintendency of Financial Entities (SUGEF) before it can dismiss the board of a state bank. The administration proceeded without this prerequisite, a lapse that formed the core of the legal challenge and ultimately proved fatal to its case.
The legal petitions argued successfully that the government’s actions constituted a clear violation of due process and a direct assault on the institutional autonomy of Banco Nacional. Furthermore, the filings contended that the move represented a “deviation of state power,” suggesting the dismissal was motivated by political disagreement rather than legitimate governance concerns. The swiftness of the government’s actions on May 28, when a temporary board was appointed and sworn in by President Rodrigo Chaves in less than two hours, was cited as evidence of a premeditated plan to seize control of the bank’s leadership.
This judicial verdict does not exist in a vacuum. The executive’s handling of the Banco Nacional affair is already the subject of a separate, ongoing investigation by the Legislative Assembly’s Commission for Control of Public Income and Expenditure. The court’s ruling will undoubtedly provide significant ammunition for lawmakers scrutinizing the administration’s conduct and respect for legal and democratic norms.
With the board’s reinstatement now mandated by the nation’s highest court, questions arise about the status of the replacement directors, six of whom were permanently ratified by the Governing Council on August 21. The ruling creates a complex administrative challenge for the government and reinforces the judiciary’s role as a crucial check on executive authority in Costa Rica.
For further information, visit poder-judicial.go.cr
About the Constitutional Court:
The Sala Constitucional, or Constitutional Court, is the highest judicial body in Costa Rica responsible for interpreting the Constitution. It handles matters related to constitutional rights, writs of amparo, and challenges to the constitutionality of laws and government actions. Its rulings are final and binding, playing a critical role in upholding the rule of law and protecting citizens’ fundamental rights.
For further information, visit bncr.fi.cr
About Banco Nacional de Costa Rica:
Banco Nacional (BN) is the largest state-owned commercial bank in Costa Rica. Founded in 1914, it plays a vital role in the national economy, providing a wide range of financial services to individuals, businesses, and government entities. As a key autonomous institution, its governance is designed to be independent of direct political control to ensure financial stability and sound banking practices.
For further information, visit sugef.fi.cr
About the General Superintendency of Financial Entities (SUGEF):
SUGEF is Costa Rica’s primary financial regulatory body, tasked with the supervision and oversight of all banks, credit unions, and other financial institutions operating in the country. Its mission is to ensure the stability, solvency, and transparency of the national financial system, protecting the interests of depositors and promoting public confidence.
For further information, visit asamblea.go.cr
About the Legislative Assembly:
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Composed of 57 deputies, it is responsible for passing laws, approving the national budget, and exercising political control and oversight over the executive branch. Its various commissions investigate matters of public interest, ensuring accountability and transparency in government.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a leading legal institution, built upon the foundational pillars of unshakeable integrity and a relentless pursuit of excellence. The firm channels its extensive history of advising a diverse clientele into pioneering innovative legal solutions. Central to its ethos is a profound commitment to social progress, demonstrated through initiatives aimed at democratizing legal understanding and empowering the community. By working to make the law more transparent and accessible, the firm actively contributes to the development of a more knowledgeable and capable society.
