First Relevant Reform of the Spanish Arbitration Act

Six years after the Spanish Arbitration Act entered into force, the first relevant amendment has recently been approved by the Parliament. Indeed, on May 21^st, the Spanish Official Gazette published Act 11/2001 for the reform of the Spanish Arbitration Act.

The two major aspects of the reform, which is already in force, are (i) courts competent for assistance and supervision of arbitration and (ii) arbitrability of company disputes.

As per the first issue, competence for appointment and removal of arbitrators, setting aside and recognition of awards has been allocated onto the Superior Courts of Justice of each “comunidad autónoma” (autonomous community). The competence for enforcement of awards, giving interim protection and judicial assistance in the taking of evidence is kept by the First Instance courts of each “partido judicial” (judicial district).

Company disputes are definitely considered to be arbitrable. To date, absent any regulation in the Arbitration Act, the arbitrability of company disputes (challenge of corporate agreements and other internal disagreements) had already been accepted in most of the cases. Now, according to the new wording of the Arbitration Act, if the shareholders of the company want to introduce an arbitration clause in the bylaws of the company, two thirds of the votes corresponding to the shares will be needed. However, ad hoc arbitration will not be allowed for company disputes. The clause will only be valid if the administration of the arbitration is entrusted to an institution.

Other relevant changes have also been approved. As far as arbitrators are concerned, an express prohibition has been set forth for mediators to act as arbitrators of the same dispute unless there is an express appointment by both parties. Additionally, in case of arbitrations to be decided in accordance with rules of law by one arbitrator, being a lawyer in exercise will no longer be a requirement to be met when the parties have not contracted this out.  Now, unless the arbitration clause or agreement provides for a specific circumstance of the arbitrator, any holder of a law degree (jurista) will be suitable as long as he meets the requirements of independence, impartiality and any other applicable to him.

As per the issuing of the award, the expiration of the time given to the arbitrators has been expressly rejected as a ground for setting it aside. This specific provision is absolutely without prejudice of any damages caused by the arbitrators to the parties due to the delay. Finally, possibility of rectification of the award for cases where the arbitrators have acted “extra petita” or have decided over non arbitrable matters has been added. The parties will be entitled to request a rectification of the award as a previous step to a potential application to set the award aside.

the Spanish National Committee of AFSIA is currently setting up its activities, and aims at creating a visible branch of AFSIA in Spain in the near future.