TSJM annuls award for breach of public order

TSJM anula laudo por vulneración del orden público

The Chamber has concluded that there has been a violation of public policy in its procedural aspect, as the additional evidence was not extemporaneous and should have been admitted in order to preserve the equality of arms between the parties.

Arbitration Proceedings and Additional Evidence

In the arbitration proceedings, the respondent-respondent proposed additional evidence after reviewing the content of the defence to the counterclaim. However, the Sole Arbitrator rejected this evidence as untimely. The arbitral award argued that “[t]he Respondent has not justified that the submission of this document could not have been made with the Statement of Defense and Counterclaim, rather than in the additional evidence“. According to the Rules (Art. 30), this step is reserved for evidence whose necessity arises after the opposing party’s pleading or due to its appearance after the initial submission of evidence.

The additional evidence submitted consisted of a document dated prior to the statement of defence and counterclaim.

Decision of the Board

The Chamber upheld the plea of nullity based on the infringement of public policy (Article 41(1)(f) LA):

  1. Ground of Production of Evidence: the Chamber stated that the production of evidence is based on the fact that the respondent-reconvener became aware of the base or primary non-performance not with the statement of claim, but with the answer to the counterclaim.
  2. Criticism of Concealment of Information: The Chamber criticised the plaintiff’s concealment of relevant information, which is crucial to determine whether there was a breach. The omission of this information, under the rules of good faith, made the Respondent fully aware of the reason for non-performance only when answering the counterclaim. Therefore, the additional evidence was consistent and appropriate.
  3. Importance of Documentary Evidence: The Chamber held that documentary evidence was essential to resolve the dispute, as was clear from the arbitrator’s reasoning.

In conclusion, the Court found that the documentary evidence should have been admitted, as it was not untimely. The inadmissibility of this evidence violated the provisions of Article 24.1 of the Arbitration Act, which stipulates that “The parties shall be treated equally and each party shall be given sufficient opportunity to assert its rights.” This constitutes a violation of procedural public policy.

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