This update addresses the most notable and relevant grounds, but the judgment deserves a complete and careful reading because of its clarity and highly sophisticated reasoning.

The plaintiff also raised a public policy objection. It argued that there was a violation of the principle of prejudicialidad penal (based on the general civil law principle of le criminal tient le civil en état, which provides for the suspension of civil proceedings when there are criminal proceedings on foot whose outcome may be decisive for the civil proceedings).

The Court of Appeal of Barcelona called into question the applicability of this principle to arbitration and, in particular, the effect of obliging an arbitral tribunal seated in Spain to stay arbitration proceedings. The court did not reach a conclusion on whether the violation of the prejudicialidad penal could imply a violation of public policy since it first determined that there was no evidence to prove that the plaintiff requested the stay during the arbitration proceedings, or that the outcome of the criminal proceedings would have been somehow decisive for the arbitration.

Finally, the plaintiff also argued that the arbitration rules applicable to the dispute only provided for ex aequo et bono arbitration (following the preference for this kind of arbitration shown by the previous arbitration act of 1988), whereas the award had been rendered in accordance with normal legal principles.

The Court of Appeal criticised the plaintiff for not identifying which ground for setting aside was to be applied to the analysis. According to the court, this failure was detrimental to the other party's right of defence and to the consistency of the judgment. Nevertheless, the court considered the argument and rejected it, on the basis that it did not fall within any ground for annulment and could not be understood to be contrary to public policy.

Three issues in the Court of Appeal's judgment are particularly noteworthy:

The effectiveness of arbitration clauses which submit to arbitration disputes about the interpretation of a contract is broadly interpreted by the Court of Appeal of Barcelona. This line of reasoning is welcome since other Spanish courts have previously adopted a stricter approach to these clauses (see Legal update, Be careful when drafting an arbitration clause: you may be limiting its scope).

Another issue worth mentioning is that the Court of Appeal concluded that a party that has commenced court proceedings (especially if the nature of the action is not strictly contractual), is not prevented from later initiating arbitration proceedings to decide different disputes. This reasoning could be extrapolated to a very interesting debate on whether a party who agreed to arbitrate can initiate an order for payment procedures (which allows creditors to recover their uncontested civil and commercial claims) without risking its right to refer to arbitration substantial disputes which actually justify the initiation of arbitration proceedings (which are indeed lengthy and expensive in comparison with the order for payment procedures).

Further, the Court of Appeal dealt with the applicability of the concept of prejudicialidad penal to arbitration. This question has been addressed by the Spanish courts (see Legal update, Court of Appeal of Madrid rules that award relying on allegedly forged documents cannot be set aside for breach of public policy), but there still does not seem to be a definitive answer to it. The position of the Court of Appeal of Barcelona seems to be against the conclusion that an arbitral tribunal seated in Spain is obliged to stay arbitration proceedings because of the existence of criminal proceedings, but again it does not reach its decision on it. Therefore, the question remains unanswered. Nonetheless, the reasoning of this judgment may give some relief to arbitrators faced with deciding whether to reject the stay at the risk of rendering an award which can be set aside.