The Barcelona Court of Appeals recently issued a ruling in a case concerning an action to set aside an arbitral award issued by the Barcelona Court of Arbitration. The arguments of the annulment action were based on the Insolvency Act and the Civil Procedure Law
The recently passed Law 11/2011 has amended the Arbitration Law and has introduced, among other things, an obligation for arbitrators and arbitral institutions to take out an insurance policy in order to cover their potential liabilities. This update discusses the conflict between the Insurance Law and this new requirement for an obligatory insurance policy in connection with arbitrators' liability under Spanish law.
The Barcelona Court of Appeal has issued a ruling in a case concerning the evaluation of the validity of a submission to arbitration. It confirmed a lower court ruling that it is the arbitral tribunal itself which should decide whether it is competent, and its potential decision not to solve a certain dispute does not affect its competence to solve subsequent disputes between the parties.
This update looks at two key issues: the legal privilege and state secret exceptions to the general discovery obligation set down in the International Bar Association Rules on the Taking of Evidence in International Arbitration, and the creation of a specialist arbitration court in Madrid. It is hoped that the specialisation of courts will later be confirmed and extended to other major business locations.
Proposals in a draft amendment to the Arbitration Act include the reallocation of jurisdiction for the support of arbitral proceedings and an arbitration-friendly change on setting aside awards on public policy grounds. It also introduces a groundbreaking arbitration procedure for disputes within the public administration. Only a few issues have failed to attract the general approval of Spain's arbitration practitioners.
Madrid Court of First Instance 74 considered that the award in a recent case included declaratory relief, but not condemnatory relief. According to Article 521 of the Civil Procedure Law, declaratory and constitutive relief are unenforceable. Article 559.1.3 of the law also states that an award that includes no condemnatory relief is unenforceable. It therefore appears that in this case the award was unenforceable.
The Madrid Court of Arbitration has introduced substantial reforms to its arbitration rules. In 2003 the former Arbitration Law was repealed and a new law was passed. The United Nations Commission on International Trade Law Model Law was the primary inspiration for this new statute.
Under the New York Convention and Articles 955 to 958 of the Act on Civil Procedure, non-recognition of a foreign award cannot be sought unless the winning party has previously sought its recognition. This unfair situation must be addressed in order to avoid the possibility of a party finding itself defenceless under procedural law.
The Supreme Court has recently quashed two lower court decisions which dismissed an objection to jurisdiction on the grounds that the defendant, by answering the claim on the merits of the dispute and filing a counterclaim at the same time, had waived its arbitration rights.
Arbitration Agreements; Governing Legislation; Jurisdiction; Selection of Arbitral Tribunal; Procedural Rules; Preliminary Relief and Interim Measures; Evidentiary Matters; Making an Award; Appeals; Enforcement; Confidentiality; Damages, Interest and Costs; Investor State Arbitrations; Trends and Issues.
On March 22 2006 the Madrid Court of Appeal ruled that an arbitration award is not deemed to be issued until it has been written down and signed by the arbitrators. A mere vote on the outcome of the award cannot be deemed to constitute an award. The arbitrators are free to vote on the award as many times as they see fit and no principle of law obliges them to stick to their first decision.
The Supreme Court has ruled on a case concerning the scope of an arbitration agreement in a company's bylaws. The Supreme Court decided that a dispute between the company and a shareholder did not have to be resolved by arbitration because two agreements were in place: the company bylaws, which contained an arbitration agreement, and the founding contract, which did not.
Unlike its predecessor, the new Arbitration Act states that unless an agreement to the contrary has been reached by the parties, either of them is entitled to amend or add to its claim or defence while the arbitration is underway, provided that the arbitrators do not deem this non-admissible due to the delay in doing so.
The new Spanish Arbitration Act regulates the form of arbitration agreements pursuant to the United Nations Commission on International Trade Law Model Law. However, it departs from the Model Law by stating that the written form requirement is fulfilled when the arbitration agreement is recorded and remains available for further consultation in electronic form or equivalent.
Spain's new Arbitration Act is based on the United Nations Commission on International Trade Law Model Law, which balances the civil and common law arbitration traditions. Where the parties do not state whether the arbitration should be decided in law or according to the principles of what is right and good, the act provides that the issue must be decided in law.
The Spanish Supreme Court has revoked an earlier decision that allowed an arbitration case to be heard in Spain even though the relevant contract provided that contractual disputes would be heard in London. The Supreme Court held that nothing in Spanish law prevented the arguments from being submitted to a foreign arbitration panel.
The Supreme Court recently held that an arbitration clause accepted by an insured is enforceable against a subrogated insurance company. Among other things, the court ruled that the insurance company should not be allowed to invoke only those parts of the agreement which are advantageous to it.
The Supreme Court recently considered a situation where, despite an agreement between the parties to resolve contractual disputes through arbitration, the claimant chose to file a court action nonetheless. The court held that the defendant did not give tacit consent to the court's jurisdiction by filing a submission on the merits of the case.
The Supreme Court has held that an arbitration clause must establish a mechanism for resolving disputes independently of the courts, and show the conclusive will of the parties to submit to arbitration. In the case at hand, a reference in the arbitration clause to the jurisdiction of the Jerez courts showed that the parties had no such intent.
The Supreme Court recently looked to the construction of an arbitration clause to determine its jurisdiction over proceedings for non-performance of a contract. Because an architect was named as the arbitrator in the contract, the court found that the parties had agreed on arbitration to decide technical disputes only, rather than legal issues such as damages.