Reform of arbitration law and government dispute resolution

Automatic summary, not yet reviewed

1. It changes which courts handle judicial tasks related to arbitration. Appointing and removing arbitrators, annulment of awards and recognition of foreign awards move to the Civil and Criminal Divisions of the Superior Courts of Justice (Tribunales Superiores de Justicia). Enforcement stays with the Courts of First Instance.
2. It clarifies arbitration in capital companies. Disputes within them can be submitted to arbitration, but adding an arbitration clause to the company bylaws requires the vote of at least two thirds of the capital, and challenging corporate resolutions requires an arbitral institution to administer the arbitration and appoint the arbitrators.
3. Procedural improvements: parties, witnesses, experts and third parties may use their own language; the award must be issued within six months, extendable by two more, and an award issued late remains valid without prejudice to the arbitrators' liability; every award must always state its reasons; and a new remedy allows correcting an award that ruled on matters not submitted to arbitration.
4. The award has res judicata effect from the start: it can be enforced even if annulment or review is sought. Annulment actions follow the rules for the verbal proceeding (juicio verbal) with special provisions.
5. It creates the Government's Delegated Commission for the Resolution of Administrative Disputes, which resolves relevant legal disputes between the State Administration and its public bodies. Its decisions are binding and cannot be appealed before the courts. A dispute is relevant, among other cases, when it involves at least €300,000.
6. Changes to other laws: anyone who proves they are party to an arbitration agreement can request interim relief before the arbitration starts; and in an insolvency proceeding, the declaration of insolvency does not by itself affect arbitration agreements, though the judge may suspend their effects if they harm the insolvency process.

Who it affects

• Companies and individuals who use arbitration to resolve disputes: They get new competent courts, clearer deadlines and rules, and awards are enforceable even if challenged.
• Shareholders and directors of capital companies: They can submit disputes to arbitration, but adding the clause to the bylaws requires a reinforced two-thirds majority.
• Arbitrators and arbitral institutions: They must take out civil liability insurance or equivalent guarantee, with exceptions for public entities.
• The Spanish State Administration and its public bodies: Their relevant internal disputes are resolved by the Government's Delegated Commission, without going to administrative or court channels.
• Companies in insolvency proceedings: Arbitration agreements remain in force, though the judge may suspend them if they harm the insolvency.

Words worth knowing

Arbitraje (arbitration)

A way to resolve a dispute outside the courts: one or more people (the arbitrators) decide, and their decision, the award, binds the parties.

Laudo (award)

The final decision issued by the arbitrators in an arbitration, similar to a court judgment.

Cosa juzgada (res judicata)

The effect by which a ruling can no longer be disputed again and must be complied with.

Exequátur

Judicial recognition that allows a foreign award or judgment to have effects in Spain.

Concurso de acreedores (insolvency proceeding)

A proceeding for a company or person that cannot pay its debts, in which a judge organizes payment to creditors.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries