How likely will an arbitration provision in an agreement be enforced by a court in Spain?

The enforcement of arbitration provisions in an agreement is principally based on the freedom of pact and autonomy of will. Freedom of pact among parties in contracts is acknowledge by the Spanish Civil Code in article 1255: (…) “The contracting parties may establish any covenants, clauses and conditions deemed convenient, provided that they are not contrary to the laws, to morals or to public policy.”

More specifically, under the Spanish Arbitration Act 60/2003 of December 23rd, as amended by Acts 5/2011 and 11/2011 of May 20th, 2011, domestic and international arbitration is admitted and enforceable by Spanish Courts.

The Arbitration Act is based on the UNCITRAL Model Law, although some changes were implemented in order to adapt it to the Spanish legal system.

Regarding the formal requirements of an arbitration agreement, the Arbitration Act follows Article 7 of the UNCITRAL Model Law and provides in Article 9.3 that the arbitration agreement should be in writing, in a document signed by the parties or in an exchange of letters, telegrams, telex, facsimile or any other means of telecommunications that provides a record of the agreement. This requirement is met when the arbitration agreement appears and is accessible for its subsequent consultation in an electronic, optical or any other format.

In regard to the material requirements of an arbitration agreement, Article 9.1 SAA establishes that it may exist in the form of a clause in a contract or in the form of a separate agreement, and it shall express the will of the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a specific legal relationship, whether contractual or non-contractual. Furthermore, Article 9.4 SAA provides that if the arbitration agreement is included in a standard form agreement, its validity and its interpretation shall be governed by the rules applicable to such contracts.

Spanish courts have generally displayed a pro-arbitration approach based on The Spanish Arbitration Act has adopted a position which favors the validity of arbitration clauses. Pursuant to Article 9 SAA, an arbitration clause will not be enforced if it does not reflect the unequivocal will of the parties to submit their disputes to arbitration. Furthermore, in the context of international arbitration, it suffices that the agreement meets the requirements set forth either under the law chosen by the parties to govern the arbitration clause, or under the substantive law, or under Spanish law.

However, under certain exceptional circumstances, stated in the Spanish Supreme Court decisions, those provisions may not be given effect by a court, when, in light of facts or events that occur after the effectiveness of an agreement, they decline in the interest of equity.

This is especially applicable to Consumer’s Law and Consumer transactions where specific regulation limits the possibilities to enforce arbitration clauses.

Finally, and as a last resort, there always will be a judicial review of arbitration decisions, through the action of annulment of the arbitration ruling. This judicial control is entrusted to the Superior Court of Justice (i.e. superior regional court); and the same is expected for exequatur of foreign arbitral rulings, except otherwise provided in international treaties or international rules.

Should you need any further assistance on the matter, please do not hesitate in contact our law offices in Madrid, Barcelona, Marbella, Gran Canaria or Mallorca.

Diego Zavala y Elena Bello Cárdenes – Dr. Frühbeck Abogados Gran Canaria