The judgment of the Spanish Supreme Court concerned a claim for breach of duty against an arbitrator, arising out of an arbitration concerning the division of an inheritance. The arbitrator made an award ordering the sister to pay an amount to her brother. The sister considered that the arbitrator had made a mistake in his calculations and requested clarification of the award. The arbitrator refused the request. Neither sibling sought to set aside the award. However, the sister brought a claim for breach of duty against the arbitrator. Both the Court of First Instance and the Court of Appeal held that the arbitrator was not liable and the sister appealed to the Supreme Court.

The Supreme Court set out five requirements that must be met to establish a claim for arbitrator's liability:

In this case, the Supreme Court considered that the miscalculation of the value of a property was not a manifest breach of the arbitrator's obligations, especially in the context of an amicable arbitration such as this one. Further, the party had not applied to set aside the award, which precluded a claim against the arbitrator.

Although this arbitration was governed by the former Spanish Arbitration Act 1988 (SAA 1988), the Supreme Court clarified that its five-stage test also applied to arbitrations under the current Spanish Arbitration Act of 2003 (SAA 2003).

The SAA 1988 provided for arbitrators' liability in case of fraud or negligence, while the SAA 2003 simply refers to bad faith, recklessness or fraud. Some commentators have noted that the omission of the reference to negligence in the SAA 2003 might impede any liability claim based on negligence. The judgment of the Supreme Court confirms that the new wording of the SAA 2003 does not introduce such a radical change in the liability regime, as there were some judgments under the SAA 1988 dismissing liability claims on the basis that gross negligence (as opposed to just negligence) was required to held arbitrators liable.

The Supreme Court affirmed that the five-stage test for establishing arbitrators' liability applies equally to arbitrations under the SAA 1988 and the SAA 2003, providing a uniform standard for arbitrators' liability restricted to cases of fraud or gross-negligence.

This is good news for arbitrators, who will be able to decide with independence and impartiality without the fear of being flooded with liability claims, although not so good for parties who will find it very hard to succeed in claims against arbitrators.