In its Order 38/2009 of 27 January, the Court of Appeal of Madrid has considered whether a letter amounted to a waiver of an arbitration agreement.
A party to a contract filed a claim before the Courts of Madrid arguing that the other party had waived its consent to arbitration by stating in a letter that "we will have to turn to the court for the defence of our interests". The claimant also alleged that, in any event, an arbitration agreement contained in a standard form contract must be considered invalid.
The Court of Appeal of Madrid dismissed the claimant's argument, concluding that a generic reference to "turn to the courts" in an exchange of communications between the parties cannot be considered as a waiver of the agreement to arbitrate. The court also rejected the argument that the arbitration clause was invalid, stating that a company cannot disregard its consent to arbitration based on the sole fact that the agreement is contained in a standard form contract. The court thus re-affirmed that a higher degree of diligence is expected from companies when entering into a contract, including a considered decision when agreeing to arbitrate.