What Constitutes the Motivation of an Arbitral Award?
An arbitral award must meet certain internal requirements, one of which is the duty of motivation. This entails the arbitrators’ obligation to present the reasons and grounds underpinning their decision, thereby enabling the parties to understand the essential criteria guiding the resolution of the dispute.
However, the motivation of an award does not necessitate an exhaustive or detailed argumentation on all debated aspects. It suffices that the award contains the elements and reasoning that allow comprehension of the ratio decidendi. In equity arbitration, the duty of motivation is manifested more flexibly than in law-based arbitration. Arbitrators, when deciding ex aequo et bono, may dispense with legal norms and base their decision on considerations of justice or equity, taking into account the specific circumstances of the case.zahoribo.com
That said, the absence of motivation, or merely apparent motivation, could lead to the annulment of the award for violation of public policy. However, mere insufficiency or lack of persuasiveness in the motivation does not suffice for such annulment.
Judgment 11/2025 of the High Court of Justice of Madrid, 19 March
The dispute arises from a consumer claim against a decoration and renovation company, submitted to equity arbitration, stemming from the hiring of the latter for a kitchen renovation.
The award partially upheld the consumer’s claims, finding that the company did not complete all contracted work and that there were defects resulting from its execution, assessing the damages at €700.00. This amount was offset against the price owed by the consumer, resulting in a balance of €1,000.00 in favour of the company. The award also stated that it would not address the claim for moral damages, considering it outside the scope of the Consumer Arbitration System and, in any case, not duly substantiated, leaving the judicial route open. A request for clarification/correction of the award was also dismissed.
The consumer filed an action for annulment of the award on two grounds:
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That the award addressed issues not submitted to the arbitrators’ competence (Article 41.1(c) of the Arbitration Act), as it allegedly assessed the cost of repairing defects without determining the authorship of the damages, which was not in dispute since the company had acknowledged responsibility. Therefore, it is argued that the award is null for having resolved aspects not requested (ultra petita).
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That the award contravenes public policy (Article 41.1(f) of the Arbitration Act), as it was issued with ultra petita incongruity and without analysing the submitted documentation, leading to illogical and arbitrary conclusions, such as exonerating the company from liability for parquet defects. Additionally, a lack of motivation is alleged, with reasoning deemed non-existent and figures lacking clear justification. It is also claimed that the award accepted invoices presented by the company despite being contested by the claimant and never previously communicated or approved, without supporting documents.
Reasoning of the High Court of Justice
In the majority decision, the Court dismissed the annulment action, noting that “a mere reading of the Award reveals that there is motivation, which, from the perspective of the external examination this Court must conduct, appears sparse yet sufficient, as it cannot be deemed non-existent or vacuous, indicating the documents examined—the only type of evidence proposed and practised—and providing an equity-based response to the issues raised by the parties, reflected in the operative part of the final Award.” It is also stated that “while the claimant’s position, demanding greater motivation, may not be unfounded,” it is cautioned that “in equity arbitration, where the motivation is inherently more lenient—though not non-existent—this Court cannot supplant the arbitral tribunal’s decision-making function, as if it were a second instance.”
However, there is a dissenting opinion (Judge Santos Vijande) asserting a “blatant and unquestionable” lack of motivation; the mere reading of the Award, without any speculation, clearly shows that it contains no reasoning whatsoever, not even succinctly, explaining the assessment of the evidence and the rationale behind the indemnity conclusions drawn. This alone should have led to the annulment of the Award. Regarding the duty of motivation and its control in the annulment of an arbitral award:
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It is affirmed that “the constitutional jurisprudence cited by the majority decision not only authorises but categorically obliges this Court to scrutinise such aspects,” which, in the dissenting judge’s view, the majority decision fails to do.
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This control is exemplified by questioning: “What more external control of motivation is there than verifying that motivation does not exist, that not even succinctly are the parties given reasons for the decision adopted?”
Conclusions
This case illustrates that the delineation of the duty to motivate an award, following the ruling of the Constitutional Court in Judgment 146/2024 of 2 December 2024, continues to generate division within the High Court of Justice of Madrid, even in equity arbitrations where the fulfilment of this duty is more flexible.
