Litigation & ADR annual report
New investment could lead to greater use of
arbitration
Arbitration could increase as new companies and joint ventures – involving local businesses and
international partners – are established in Spain
Alternative dispute resolution is not
used frequently in Spain, at least in
the commercial field, where firms are
much more likely to enter into litigation,
according to Javier Mendieta, a partner
at CMS Albiñana & Suárez de Lezo in
Madrid.
Among clients´ reservations about
alternative dispute resolution, are –
with regard to arbitration, for example
– the extent of the independence and
impartiality of the arbitrator, as well as
the likelihood of being able to predict
what the outcome of an arbitration
will be. However, on the positive
side, arbitrators are often extremely
knowledgeable about the matters subject
to the arbitration, which is not necessarily
the case with judges in courts.
With regard to arbitration, despite
the fact the Spanish arbitration law –
enacted in 2003, amended in 2009 and
2011 and aimed at allowing Spain to
become a centre for dispute resolution
between Latin America and Europe –
is technically good and provides for
flexibility, Mendieta says he has noticed
a decrease in its use, particularly in the
case of domestic disputes.
This is because clients do not
perceive arbitration as being faster
or cheaper than litigation in Spain,
even though the judicial process has
become more expensive in recent years,
according to Mendieta. The legal right
to provisionally enforce a first instance
judgment, subject to appeal, without
the need for posting a bond, has in
most cases reduced the attractiveness
of an award rendered in an arbitration
procedure due to the impossibility to file
an appeal against it.
be opportunities for more legal work
in instances of arbitration involving a
private company and a foreign public
company or government as arbitration
clauses may be inserted into contracts
regarding investment.
Mendieta – who specialises in
litigation, pre-litigation and arbitration
in civil