Spain issues New Arbitration Statute

In December 23, 2003, Spain issued a new Arbitration Act (Law 60/2003 on Arbitration). The new Act, based on the UNCITRAL Model Law, will come into force on March 26, 2004. It was published in the December 26 Spanish Official Gazette (http://www.boe.es/boe/dias/2003-12-26/pdfs/A46097-46109.pdf).

The Act was drafted by a commission comprising Professors Evelio Verdera y Tuells (Complutense University, Madrid), Manuel Olivencia (University of Sevilla) and Ignacio Díez-Picazo (Complutense University, Madrid), together with Fernando Mantilla-Serrano, partner at Shearman & Sterling LLP and member of the ICC International Court of Arbitration.

The new Act modernizes the arbitration regime in Spain and should serve to make Spain a choice place for international arbitration, particularly involving Latin American interests. A noteworthy innovation is the right to have an award enforced immediately, even when a petition to set aside the award has been filed before the national courts. Also, under the new law arbitrators are now authorized to grant interim measures, which are enforceable as awards.

In addition, the new Act makes important efforts to favor and preserve the arbitration agreement, stating that in international arbitrations, the agreement shall be deemed valid and the dispute arbitrable if the requirements for validity and arbitrability are met under any of three possible legal systems: (i) the law chosen by the parties to govern the arbitration agreement, (ii) the law applicable to the merits of the dispute or (iii) Spanish law. Likewise, states or state entities, as parties to international arbitration in Spain, are prohibited under the new Act from availing themselves of the privileges and immunities of their domestic law to escape their obligations under an arbitration agreement.

Finally, with the abrogation of the Spanish Arbitration Act of 1988, archaic features of the prior law disappear, such as the requirement that an award be registered before a notary public to be deemed valid. Also, the new Act eschews both the outdated dichotomy between so-called arbitration ?at law? and ?at equity? and the prior law?s default preference for ?equity? arbitration; under the new Act, and in accordance with international arbitration practice, arbitrators are only empowered to decide as amiables compositeurs if the parties expressly authorize them to do so.