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What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
Article 37 of the Arbitration Act sets out the formal requirements that an award must fulfil in order to be valid:
- It must be executed in writing and signed by the arbitrators.
- It must be reasoned, unless dictated with the parties’ consent.
- It must specify the date and place of issue.
- It must decide on costs and expenses in relation to the arbitration, respecting any agreements between the parties in this regard.
- It must be duly served on all parties to the arbitration.
Awards need not be reviewed by any other body.
Timeframe for delivery
Are there any time limits on delivery of the award?
Unless otherwise agreed by the parties, the arbitrators must issue their award within six months of the date on which the response to the claim was filed. However, if the arbitrators exceed this time limit, the award is still valid, without prejudice to the arbitrators’ liability.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
Spanish law does not provide for punitive damages. That said, if a contract makes provision for punitive damages, arbitrators may grant them if the conditions stipulated in the contract are met, carefully assessing their proportionality based on the principle of free will of the parties. However, the enforcement of these damages is complicated, as the award could be challenged based on various principles of public order.
Arbitrators may award interest. Under Spanish law, the parties may agree to apply compound interest.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Interim measures may be requested before the appropriate local court or the arbitral tribunal. All measures intended to secure the future enforcement of the award may be applied by any party to the arbitration, following Section 727 of the Civil Procedural Act.
Can interest be awarded?
At what rate?
Generally, the applicable interest rate will be agreed between the parties. If the parties have no agreement in this regard, the applicable interest rate will be the legal interest rate approved by the government each year. In the case of commercial receivables, the interest rate set out in Act 3/2004 may apply. This interest rate is equal to the interest rate applied by the European Central Bank to its most recent financing transactions, plus 7%.
Is the award final and binding?
Awards are final and binding and may be challenged only on the grounds set out in Article 41 of the Arbitration Act.
What if there are any mistakes?
Within 10 days of issue of the award, any of the parties may request the tribunal to correct mistakes. The tribunal may also correct any mistakes within 10 days of the date of the award.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
What is the procedure for challenging awards?
Any challenge against an award must be filed within two months of the date on which the award was issued. Challenges must be filed before the superior court of justice of the seat of arbitration. The applicant must provide all supporting documentation and propose any relevant means of evidence. The court will serve the challenge on the other party, which has 20 business days to oppose the challenge and provide documentation and relevant means of evidence. A hearing may take place if requested by the parties or if any admitted means of evidence must be executed before the court. After the hearing, or where no hearing takes place, the court will issue its judgment, which is final and cannot be appealed.
On what grounds can parties appeal an award?
Section 41 of the Arbitration Act sets out the grounds on which an award can be challenged, stating that an award may be set aside if the applicant can demonstrate that:
- the arbitration agreement does not exist or, if it does exist, is void;
- it was not notified about the appointment of the arbitrator or any order, or it was unable to exercise its rights;
- the arbitrators adjudicated on matters beyond the scope of their jurisdiction;
- the appointment of the arbitrators or the proceedings were in breach of the parties’ agreement, or – where no agreement exists or where such agreement is contrary to the Arbitration Act – the appointment or the proceedings were in breach of the Arbitration Act;
- the arbitrators decided on matters that are not arbitrable; or
- the award is contrary to public order.
What steps can be taken to enforce the award if there is a failure to comply?
The enforcement procedure varies depending on whether the award is domestic or foreign (an award issued outside Spain is considered a foreign award pursuant to Article 46 of the Arbitration Act).
Domestic awards may be enforced directly before the court of first instance of the place where the award was issued, following the procedure established in the Civil Procedure Act, which starts with an application filed by the party seeking to enforce the award.
Foreign awards are recognised pursuant to the New York Convention. Generally, the competent authority is the superior court of justice of the domicile or residence of the party against which recognition is sought or, on a subsidiary basis, of the place where the award will have effect.
Any enforcement petition must seek to comply fully with the decision set out in the award. The enforcement process will encompass any measures needed to grant full relief to the winning party.
Can awards be enforced in local courts?
Yes, as only local courts have competence to enforce awards.
How enforceable is the award internationally?
Any Spanish award must follow the New York Convention of 1958 to be enforced internationally.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Pursuant to Article 2.2 of the Arbitration Act, if the arbitration is international and one of the parties is a state, the state may not invoke a sovereign immunity defence to avoid the consequences of the arbitration agreement and, thus, of enforcement of any award issued thereunder.
Are there any other bases on which an award may be challenged, and if so, by what?
The grounds established under Article 41 of the Arbitration Act are numerus clausus (ie, a challenge may be based only on the causes established therein).
How enforceable are foreign arbitral awards in your jurisdiction?
Pursuant to the New York Convention, foreign awards are fully enforceable in Spain.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
This differs on a case-by-case basis. Some local courts have enforced awards set aside by in the seat of arbitration on an independent application of the New York Convention, while other local courts have denied enforcement based on the fact that the award was set aside by in the seat of arbitration. The matter is thus still open for debate.
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