What happens when an Arbitration Court is dissolved?
The case in question arose out of a contractual lease relationship, in which the arbitration clause indicated that any dispute was to be resolved before the Court of Economic Arbitration in Law and Equity, No. GUARANTEE NUM000, in accordance with the arbitration agreement. However, this court had been dissolved at the time of the claim. Faced with this situation, the claimants applied to the High Court of Justice of Madrid requesting the judicial appointment of an arbitrator, based on Article 15.3 of the Arbitration Act (LA) (‘[i]f it is not possible to appoint arbitrators through the procedure agreed by the parties, either party may request the competent court to appoint arbitrators or, where appropriate, to adopt the necessary measures for this purpose’).
Arbitration clause in lease contracts
The defendants did not appear in the proceedings and were declared in procedural default. The Chamber ruled in favour of the plaintiffs. The judgment reiterates the court’s position of guaranteeing access to arbitration, even in the face of obstacles such as the disappearance of the institution designated in the arbitration clause.
Key arguments of the Chamber
The Chamber, in its analysis, considered the following:
- The Chamber found that the Arbitration Court was dissolved with references to its Judgment of 4 February 2020. In that case, an action for annulment of the arbitral award was dismissed on the grounds that the arbitration was administered by an institution other than the one expressly designated – now dissolved – in the absence of opposition from the parties there and because it did not involve an invalidating error (the Chamber then stated that ‘that error does not vitiate the will to submit, first of all, because there is no opposition by the respondent to the fact itself of the submission to arbitration; Moreover, it cannot be considered that this error in the wording of the arbitration clause can be regarded as essential in the circumstances of the case (art. 1266 CC). 1266 CC), this will being ratified by the subsequent conduct of the parties: the plaintiff presenting its claim; the defendant not opposing what is stated therein and previously ratifying its will to submit to arbitration by virtue of an act of its own called to cause state”);
- The appropriateness, from a pro-arbitration approach, of the need to judicially appoint an arbitrator from the list of arbitrators of the Madrid Bar Association: ‘we consider it appropriate to appoint an arbitrator, who, in accordance with art. 15. 1 of the Arbitration Act, applicable to the present case – since nothing has been agreed in this respect -, must be a jurist, in the absence of any agreement to the contrary by the parties, and must act as such, and we consider that it is more appropriate for the case in question that the arbitrator should belong to the Court of Arbitration of the Bar Association of Madrid”).
Conclusions
The decision of the High Court of Justice of Madrid in this case sets a relevant precedent for the future of arbitration in Spain, reinforcing the idea that arbitration is a flexible mechanism that can be adapted to the changing circumstances of the legal context. Even with the disappearance of an Arbitration Court, parties can be confident that their disputes will be resolved in accordance with their agreements, thanks to the tools provided by the Arbitration Law.
The judicial appointment of an arbitrator is not an obstacle, but a solution to guarantee the continuity and effectiveness of the arbitral process, protecting the rights of the parties and ensuring that disputes are resolved in a fair and equitable manner. Ayuela Jiménez remains committed to arbitration as one of the most efficient and specialised mechanisms for dispute resolution, and this judgment reinforces the importance of having a robust legal framework to support this type of procedure.