There have been a number of notable arbitration related decisions in Spain in 2009 which highlight the pro-arbitration attitude of the Spanish courts.

Practitioners should be aware that parties to arbitration proceedings may find it very hard to succeed in liability claims against arbitrators. The exhaustive five-stage test, and the restriction on arbitrators' liability to cases of fraud or gross-negligence only, set out by the Supreme Court in its judgment of 22 June 2009 (no. 429/2009), will allow arbitrators to decide with independence and impartiality without the fear of being flooded with liability claims (see Legal update, Liability of arbitrators in Spain).

A recent decision of the Court of Appeal of Salamanca confirms that it is not acceptable for a company to deny its consent to arbitration on the basis that the arbitration agreement was contained in the general conditions of a standard form contract. Further, the company could not allege its own lack of due diligence when signing the contract (see Legal update, The agreement to arbitrate between companies: no matter how, no matter where).

In 2009, the Spanish courts have been quick to provide interim relief to parties in international arbitration proceedings, regardless of the fact that the seat of the arbitration is abroad or that arbitration proceedings had not been initiated yet (see Legal update, Spanish courts race to assist international arbitration tribunals with interim measures).

In summary, the Spanish courts have shown a supportive approach to arbitration in 2009 and an increasing understanding of the crucial role that arbitration plays as a dispute resolution mechanism.

On 1 January 2009, the new Rules of the Court of Arbitration of Madrid came into force (see Legal update, The new rules of the Court of Arbitration of Madrid start walking). The rules draw primarily on the rules of UNCITRAL, the ICC and the LCIA and are based on the principle that flexibility and freedom of action of the parties must govern arbitration proceedings. They also address certain procedural questions that had arisen as a result of the increasing complexity and internationalisation of business which had not previously been resolved by law or by other arbitration rules.

The rules, which have now been in force for nearly one year, have generally been welcomed by practitioners as they represent a decisive step towards modernity and internationalisation and an attempt to become a natural venue for disputes between Latin-American and European parties.

The Spain-Libya bilateral investment treaty (BIT), which contains a novel "environmental exemption" clause, came into force on 1 August 2009 (see Legal update, New BIT between Spain and Libya: promoting investments while protecting the environment). The BIT grants a broad range of protections for investment and investors. However, the most distinctive feature of the BIT is its commitment to a high degree of environmental protection. It provides that the state parties may adopt, maintain or enforce any measure aimed at improving the levels of environmental protection, without being restricted by the obligations contained in the BIT. This means that measures adopted to preserve the environment are exempted from the scope of protection of the BIT and will not generate any right to compensation.

The new environmental exception may give rise to problems if a state party seeks to disguise actions or regulations as environmental measures. Further issues may also arise as to who decides whether the exemption applies, or what level of protection is reasonable. Consequently, there could be a new wave of investment treaty arbitration cases where the issues to be decided relate to whether there is a genuine environmental policy behind a regulation or a particular action by a state, or whether there is an abuse by the state of the environmental exemption clause.