Spain's New Arbitration Law: A Model of Clarity

By Cremades, Bernardo M. | Dispute Resolution Journal, May-July 2011 | Go to article overview

Spain's New Arbitration Law: A Model of Clarity


Cremades, Bernardo M., Dispute Resolution Journal


Significant changes in the law by Spain's foremost expert on arbitration.

Spain's new arbitration law became effective on June 10, 2011, having been approved by Spain's Parliament on May 12, 2011, and ratified by King Juan Carlos I prior to publication on May 21 in Spain's Boletin Oficial del Estad.

This is the third modification of Spain's arbitration regime. The first two modifications, in 1988 and again in 2003, substantially changed the arbitration statute, introducing into the Spanish legal system many of the general principles embodied in the 1985 UNCITRAL [United Nations Com mission on International Trade Law] Model International Commer cial Arbitration. Since then, this Model Law has undergone a revision and arbitration in Spain has developed considerably, revealing the need for reforms in certain areas. The problems that most needed addressing were:

* Conflicting jurisprudence be tween the Courts of First Instance (Juzgados de Primera Instancia), which had jurisdiction over proceedings to recognize and enforce foreign arbitral awards (exequatur), and the Regional Courts of Justice, which had jurisdiction over the annulment of arbitration awards (i.e., set-aside proceedings), as well as conflicting decisions within the departments of the Re gional Courts of Justice.

* The effectiveness of arbitration clauses in matters involving corporate shareholders, which Spain's case law has upheld but the 2003 reforms excluded from the reach of the arbitration law because Spain's legislature did not want to deal with it at the time.

* Spain's insolvency law, which rendered an arbitration agreement ineffective simply because a signatory company was declared bankrupt. This law frustrated the interests of national and international arbitration users that were parties to arbitration agreements with Spanish companies that had become insolvent.

Significant Changes in the Law

The main modifications made by the new arbitration law, the first three of which respond to the issues described above, are the following.

Uniformity. To achieve greater uniformity in decision making and reduce the work load of the Courts of First Instance, the new law removed the functions of providing judicial "support" for and "control" of arbitration from these courts and the Re gional Courts of Justice, and reassigned these functions to the 16 Superior Justice Courts (Tribunales Superiores de Justicia), one in each au ton omous region of the country. As a result, the Superior Justice Courts will become specialized in arbitration matters. They may be called upon in ad hoc arbitration proceedings to appoint an arbitrator if the parties cannot agree, decide a challenge to an arbitrator's appointment, or rule on annulment and exequatur proceedings.

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