On January 1 2009 the Court of Arbitration of the Official Chamber of Commerce and Industry of Madrid ("Court of Arbitration of Madrid") published its new Statutes and Rules. Created in 1989 the Court of Arbitration of Madrid is one of Spain's leading arbitration institutions, dealing with more than a hundred disputes each year.

The reform is aimed at updating the existing procedures and encouraging the use of the Court of Arbitration of Madrid by fulfilling the needs of international businesses. In doing so the reform has taken into account the regulations issued by the United Nations Commission on International Trade Law (UNCITRAL), the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA). The drafting of the new Rules has been carried out by a team of experts, including the Spanish Arbitration Club (Club Español del Arbitraje, which brings together leading individuals from the Ibero-American arbitration world), arbitrators from the Court and also lawyers who specialise in arbitration. This team has not only assisted in drafting the New Rules, but has also been consulted on which aspects of the existing procedures it regards as most significant.

The foundations of the new Rules are that flexibility and choice of action of the parties involved are of paramount importance in arbitration proceedings. The Rules also respond to a number of practical issues that have arisen due to the growing intricacy and internationalisation of business, and which had not been resolved satisfactorily by law or by other arbitration rules.

The main developments and significant enhancements of the new Rules are as follows:

  • The parties are now free to choose the location, language, arbitration procedure and the arbitrators for the arbitration. If no choice is made, then by default the place of arbitration will be the city of Madrid and the language of arbitration will be Spanish. The parties may agree to modify the rules of procedure, but any such modifications must observe the Spanish Arbitration Act (Ley 60/2003) and must be expressed in writing.
  • If the Court of Arbitration of Madrid is not convinced of the existence of a clear prima facie arbitration agreement whereby resolution of the dispute is entrusted to the Court of Arbitration, it can notify the parties that the arbitration cannot proceed. The claimant can subsequently request that the Court completes the appointment of the arbitrators in order that they review this decision. However, if the decision of the arbitrators ratifies the view adopted by the Court, the claimant will bear the costs of the matter.
  • A number of improvements to the procedure concerning precautionary measures, evidence and the appearance of third parties have been introduced. There are also plans for an online system which can be used to submit documents for the arbitration electronically. Where documents are submitted electronically, paper copies will not be required.
  • The period for concluding international disputes by way of arbitration has been extended to six months, which runs from the date the statement of defence is submitted. However, by submitting to the new Rules, the parties give authority to the arbitrators to extend the time limit for making the award by a further two months, if it is necessary for the satisfactory conclusion of the case. The time limit for making the arbitration award may be also be extended by the agreement of all the parties.
  • As under the previous rules, all awards made remain private and confidential. However in circumstances where the Court believes an award is of interest for legal precedent purposes it may be made public, providing that the parties do not object its publication, and that all references to the names of the parties and other identifying information are removed.
  • With regards to costs, the principle followed by the new Rules is that they should be split in proportion to each party's relative success or failure in the case.
  • The costs of arbitration at the Court of Arbitration of Madrid have been revised to make them more competitive, and are now around 50% of what would be charged by the ICC for a similarly-sized arbitration.
  • The new Rules also provide a route for smaller claims (less than 100,000 Euros) to be fast-tracked.

The Court of Arbitration of Madrid is already one of the leading arbitration institutions in Spain. With these new Rules, The Chamber of Commerce and Industry hopes that the improvements will result in the Court becoming one of the key centres for both national and international arbitration. However, only time will tell whether the reforms have served their intended purpose.