Spanish arbitration law, enshrined in Arbitration Law No. 60/2003 (Ley de Arbitraje), forms the basis for the out-of-court settlement of disputes between parties. In addition, the provisions of civil procedure law apply. In this blog post, we take a look at some important aspects of this arbitration law.
The rules of Spanish arbitration apply if the place of arbitration is in Spain (Art. 1 para. 1 Ley de Arbitraje). Some provisions may apply even if the place of arbitration is abroad (Art. 1 para. 2 Ley de Arbitraje).
The first step is to check whether an arbitration clause has been validly agreed. The validity requirements for arbitration clauses under Spanish law do not include any particularly strict formal requirements; for example, the written form is generally sufficient (Article 9.3 Ley de Arbitraje). This ensures particular flexibility when drafting and agreeing arbitration clauses. The model clauses provided by the various arbitration organizations can be used for this purpose.
Binding effect: Once an arbitration clause has been effectively agreed, it is generally binding on the parties. This means that recourse to the ordinary courts is barred insofar as the respective dispute is covered by the arbitration clause. This depends on the respective agreement between the parties.
Objection of lack of jurisdiction and time limits: A court that is seized despite an existing and effective arbitration agreement declares that it has no jurisdiction at the request of one of the parties (Art. 7 Ley de Arbitraje, Art. 39, 63, 65 of the Civil Procedure Act). The objection of lack of jurisdiction can be raised within 10 days.
Provisional and protective measures: Provisional and protective measures may be issued at the request of a party not only by the arbitral tribunal, but also - unless the parties have agreed otherwise - by the court where the award may be enforced (Art. 8 Ley de Arbitraje, Art. 724 Civil Procedure Act).
Decision of the arbitral tribunal: Pursuant to Art. 37 para. 1 Ley de Arbitraje, the arbitral tribunal shall decide by arbitral award (laudo). The arbitral tribunal shall not only decide on the substance of the case, but also on the costs in accordance with the arbitration agreement.
The written arbitration award has binding effect (Art. 43 Ley de Arbitraje). The parties can therefore only take limited action against it. The only possibility is an action for annulment (Art. 40 Ley de Arbitraje). The High Court of the Autonomous Community where the arbitration award was made is responsible for this (Art. 8 Para. 5 Ley de Arbitraje). The deadline for bringing an action for annulment is two months after the arbitration award has been served (Art. 41 Para. 4 Ley de Arbitraje).
An arbitral award may only be set aside in a few, exhaustively listed cases (Art. 41 (1) to (3) Ley de Arbitraje). Accordingly, a ground for setting aside exists if the party requesting the setting aside asserts and proves it,
- that the arbitration agreement does not exist or is invalid,
- that proper notice was not given of the appointment of the arbitrator or the arbitration,
- that arbitrators have ruled on issues that were not submitted to them
- that the appointment of the arbitrators/arbitration was not made in accordance with the agreement between the parties
- that the arbitrator has ruled on matters not subject to arbitration
- that the award is contrary to public policy
Enforcement: Enforcement of the arbitration award is carried out in accordance with Art. 44 Ley de Arbitraje under the enforcement rules (Art. 517 et seq. of the Spanish Civil Procedure Act). The arbitration award can be enforced even if an action for annulment is pending. However, it can be suspended against the provision of security (Art. 45 para. 1 Ley de Arbitraje).
Spanish arbitration law offers a well-structured framework for settling disputes outside of court and is therefore a viable alternative. The fact that arbitrators are appointed who are more specialized in certain areas of law and may therefore have greater expertise than the ordinary courts can be particularly advantageous. However, the costs incurred must also be taken into account, which are usually higher than the costs of ordinary court proceedings.
Author:
Dr. Dominic John Patrick Porta, LL.M.
Attorney at Law (Düsseldorf Bar Association n° 52954)
Abogado (ICAIB n° 6645)
dominic.porta@anwaltmallorca.eu
www.anwaltmallorca.eu
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