Foreign entrepreneurs who have legal problems with their business partners in Spain or with other foreign companies with offices in this country may solve them through arbitration procedures instead of going in court for a litigation.
Those who are interested in arbitration should know a few details about this procedure which is regulated by the Arbitration Act no. 60/2003 that was amended by the Acts no. 5/2011 and no. 11/2011.
Both local and international arbitration procedures are regulated by these laws and there are also the provisions of the international treaties signed by Spainwhich complete the Spanish rules. Our lawyers in Spain can provide you with legal support and advice in arbitration cases.
|Definition of arbitration in Spain
Arbitration is the legal procedure through which two parties try to reach an agreement for a given matter, with the assistance of an arbitrator.
Law regulating arbitration
The Arbitration Act no. 60/2003
UNCITRAL Model applied in Spain (yes/no)
|To whom is the arbitration law applied
Domestic and foreign individuals/companies
|Provisions of the arbitration agreement
– the will of the parties to submit to the established resolution;
– the names and the signatures of the parties;
– the main issue that is resolved through arbitration;
– the validity of the agreement;
– the obligations of each party.
|International law recognized for arbitration in Spain
– the Geneva Convention on the Contract for the International Carriage of Goods by Road 1956;
– the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958;
– the Geneva Convention 1961 on International Commercial Arbitration
|Where arbitration is held in Spain
– the Spanish Court of Arbitration;
– the Civil and Trade Court of Arbitration;
– the Madrid Court of Arbitration
|The average duration of an arbitration case
|One year and a half
1 year or 5 years, depending on the type of arbitration
|When the arbitration is recommended
|In both public and private matters, typically for minor disputes
|Minimum number of arbitrators appointed for a case
|Basic requirements imposed to arbitrators
– be impartial and independent;
– have the necessary qualifications;
– submit a declaration of availability when accepting an appointment for a case
|Removal of arbitrators allowed (yes/no)
|Legal grounds to remove an arbitrator
The law on arbitration in Spain stipulates the removal grounds under the Article 18 of the Arbitration Act (for example, the parties question the person's impartiality).
|Requirements when there are more arbitrators
|When there are more than 3 arbitrators, one of them has to be specialized in the respective field that is addressed by the parties.
The use of arbitration in Spain
The UNCITRAL Model Law is used for the Arbitration Act which came into force in 2004. The arbitration has been used to a greater extent in the last few years due to the international companies that have chosen this method instead of litigation.
According to the Arbitration Act, the parties are free to choose the number of arbitrators and the only condition is that the number should be uneven.
In Spain, numerous domestic companies prefer to go in court and more foreign firms decide to choose arbitration which is seen as more efficient and flexible.
The parties that prefer arbitration trust this method because the arbitrators are considered to be better professionals and more specialized in this field than the judges.
The arbitration is a faster method for closing a dispute, but one of the disadvantages is that a party who is not satisfied by the final decision doesn’t have the right to appeal. Another disadvantage could be the expenses that can be high in case of a complex and international case.
What are the main rules of the Arbitration Act in Spain?
Article 1 of the Arbitration Act states that the law applies to both domestic and foreign cases that originated in Spain. Article 8 mentions the courts that can be involved in dealing with arbitration in Spain.
Article 9 refers to the arbitration agreement, while Article 11 mentions the rights and the obligations of the parties once the agreement is signed; our law firm in Spaincan provide more information.
What other rules of law apply for arbitration in Spain?
Besides the rules of law our team of lawyers in Spainhas presented, arbitration can also fall under the provisions of other acts. For international matters, the following will apply:
- the Geneva Convention on the Contract for the International Carriage of Goods by Road 1956;
- the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958;
- the above mentioned is also known as the New York Convention, which is signed by more than 100 countries;
- the Geneva Convention 1961 on International Commercial Arbitration.
The institutions that handle the arbitration procedures in Spain
The Court of Arbitration of the Official Chamber of Commerce of Madrid is in charge with the domestic disputes that are handled also by the Civil and Commercial Court of Arbitration and the Barcelona Arbitral Tribunal.
The international arbitration cases take place at the International Court of Arbitration of the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA).
An arbitration may generally last one to one and a half years according to its complexity, but in certain cases, it may end after two or two and a half years.
Is there a limitation on arbitration in Spain?
Yes, the law stipulates limitation on arbitration proceedings, based on their type. Our law firm in Spain can offer an in-depth presentation and guidance, based on the particularities of your case.
At a national level, the limitations are established by the Civil Code. For commercial matters, the Civil Code, Article 1964 stipulates that the term for a contractual claim is of maximum 5 years.
Arbitration in Spain referring to tort liability is limited to a period of 1 year (according to the Civil Code, Article 1968.2).
Arbitration instead of public law in Spain
Arbitration in Spain is a suitable method in cases of non-contractual disputes, where the public law may be excluded. This can also help in the cases where there are minor disagreements for matters such as domain names disputes or customer claims.
In situations like these, the arbitrators can establish various solutions. For example, it is good to know that the arbitration in Spain can be used in cases of intellectual property unfair competition, or patents disputes of companies both local or foreign.
Besides that, the Arbitration Law in Spain can let space for maneuverability where the parties implied can solve the issues. Our attorneys in Spain can provide you with arbitration services instead of litigation which might be expensive and time-consuming.
What are the requirements for an arbitration agreement in Spain?
Arbitration in Spain is resolved through the arbitration agreement. The document must respect specific legal requirements, and our team of Spanish lawyers can present all such requirements.
The content and the form of this document is established by the UNCITRAL Model Law, Article 7 and the Arbitration Act 2003, Article 9.
According to these, the document has to be completed in writing, and must contain the signatures of the parties which agree on the terms of the document. This agreement can be signed as a separate document or it can be a part of contract.
Cooperation between judges and arbitrators in Spain
The same Arbitration Law in Spain agrees the collaboration between a judge and an arbitrator, where precautionary measures can be proposed for several types of disputes.
In case an arbitrator does not agree on a precautionary measure suggested by a magistrate, he/she can act in accordance with the Arbitration Law.
We remind that the arbitration in Spain offers flexibility compared to the judicial system in the country. Complete details in this matter can be offered by our Spanish lawyers.
What is the minimum number of required arbitrators?
As a rule, 1 arbitrator must be appointed for arbitration in Spain. However, according to the latest modifications of the law (Article 15.1 of the Arbitration Act 2003, amended in 2011), the arbitrator must comply with certain requirements.
Here, is it necessary to know that the appointed arbitrator must have a qualification in the legal field – he or she can be a lawyer in Spain, without necessary having to practice this profession.
This requirement is imposed when the arbitration in Spain is a domestic case. For cases where more arbitrators are appointed, such as 3 or 4, it is also necessary to have at least 1 arbitrator specialized in the legal field.
In arbitration cases, the parties involved are free to establish the necessary number of arbitrators. Please mind that this profession can be practiced by any person who qualifies under the provisions of the Article 13 of the Arbitration Act.
Can the parties remove arbitrators in Spain?
Yes, the parties involved in an arbitration case in Spain are entitled to remove an arbitrator based on specific legal grounds, that are regulated under the Article 18 of the Arbitration Act.
Any of the parties is entitled to request the removal of the arbitrator in a period of 15 days since the moment when the party has observed various actions that question the arbitrator’s impartiality.
If you need more details about the arbitration procedures in this country, you may contact our law firm in Spain. Do not hesitate to address to our team for any other legal issue where the assistance of a Spanish lawyer can be necessary.
Please contact our lawyers in Barcelona for additional information on the arbitration law and the arbitration procedures recognized in Spain. Outside of this, you are welcome to call our attorneys for any other legal issue.
Typically, foreigners address to us for information and legal representation on the steps imposed when starting a business, the business/investment visas that may be required, etc.
Foreigners also contact our team for legal matters related to the immigration law. Persons who arrive from other EU member states do not have to comply with any immigration formality upon arrival, but non-EU citizens must apply for visas suitable for their purpose of stay.
Our lawyers in Madrid can provide in-depth details on the visa system available here (visas for short and long-term stays).
Many clients are interested in obtaining legal services when purchasing a real estate property. For this, you can always rely on our real estate lawyers in Spain, who can assist you in drafting and signing sale-purchase agreements and who can conclude due diligence on your behalf.
Please mind that EU citizens can purchase properties here following the same rules available for Spanish nationals.