First decisions of the Superior Courts of Justice after amendment of Spanish Arbitration Act | Practical Law

First decisions of the Superior Courts of Justice after amendment of Spanish Arbitration Act | Practical Law

Silvia Martínez (Associate), Hogan Lovells International LLP

First decisions of the Superior Courts of Justice after amendment of Spanish Arbitration Act

by Practical Law
Published on 15 Dec 2011Spain
Silvia Martínez (Associate), Hogan Lovells International LLP
A few months after the passing of the amendments to the Spanish Arbitration Act, the first published decisions of the Superior Courts of Justice (the new courts competent over arbitration issues) demonstrate a pro-arbitration approach and a strong knowledge of arbitration, and prove that the duration of judicial proceedings in support of arbitration is being reduced.
The amendments to the Spanish Arbitration Act 60/2003 introduced, among other things, a re-allocation of the judicial competences relating to arbitration (see Legal update, Amendments to Spanish Arbitration Act now passed). Applications to set aside an arbitral award, the appointment of arbitrators and the recognition of foreign arbitral awards are now all dealt with by the Superior Courts of Justice of the Spanish Autonomous Regions. The aim behind this amendment was to improve the coordination and specialisation of these competences, since there are only 17 courts of this kind in Spain. In addition, as these courts have a limited workload in civil and commercial matters, the amendments were also intended to reduce the duration of judicial proceedings in support of arbitration. The first decisions appear to fulfil these expectations.
The first decision published was issued by the Superior Court of Justice of Catalonia on 24 October 2011 (STSJ CAT 10797/2011). The claimant filed an action to set aside an award on 16 June 2011 (only six days after the amendment entered into force) on the ground that the tribunal exceeded its jurisdiction. According to the claimant, the arbitrator had exceeded the scope of the arbitration agreement by deciding not only on the release of the amounts retained as a guarantee under a construction contract but also on whether additional retentions were appropriate. The claimant further argued that, because the question of additional retentions was not part of the argument before the tribunal it had not produced evidence on that point. Therefore, a decision on this point amounted to a breach of due process.
The Superior Court of Justice rejected the request to set aside the award, concluding that the excess of jurisdiction ground has to be determined not by reference to the arbitration agreement alone but also to the parties' allegations during the proceedings. Therefore, the limits of the arbitrators' powers are defined by the parties' allegations, which may exceed the scope of the arbitration agreement. To this extent, and considering that it was effectively part of the argument before the tribunal, the court rejected the claimant's allegations of breach of due process, finding that the failure to produce evidence was, if anything, due to the negligence of the claimant itself. The court, therefore, upheld the award.
The second decision was issued by the Superior Court of Justice of Castilla y León on 25 October 2011 (STSJ CL 5389/2011). This decision related to a request to the court for the appointment of an arbitrator that was filed on 29 July 2011. The respondent had objected to the request on the ground that the arbitration agreement was not enforceable because, although it was included in the contract signed by the parties, the agreement was not included in the version of the contract that had been granted in public deed 30 days after signature.
The Superior Court of Justice dismissed the objection, concluding that the arbitration agreement was valid regardless of whether or not it was incorporated in the public deed. Further, the court stated that it was not reasonable to infer that the arbitration agreement was not meant to be valid after granting the public deed since it referred to all disputes arising out of the performance of the contract. The Superior Court of Justice then proceeded to deal with the appointment of the arbitrator, inviting the respondent to agree on any of the arbitrators proposed by the claimant or, in the absence of an agreement between the parties, ordered the secretary of the court to appoint one by drawing lots.
These two decisions do not develop Spanish arbitration case law, but they are evidence that the aims behind the amendments to the Spanish Arbitration Act are so far being met. The rulings show a strong knowledge of arbitration and a well-intended pro-arbitration approach. Above all, both decisions demonstrate that the duration of court proceedings can be reduced, as they were both issued within three to four months, which is a very reasonable time period, especially considering that August is a month of judicial vacation in Spain.