Mediation & arbitration
Cost and time-effective, many of our clients at Del Canto Chambers have chosen the route of mediation or arbitration to solve their legal disputes; either in Spain, or in the UK. There are of course key differences between both, so you really need to make sure before you decide on a particular course of action.
If your chosen legal representative has no recognised experience with Spanish courts, perhaps you should rethink and contact one of our specialists, who are fully aware of the differences across jurisdictions.
Why Choose Mediation and Arbitration?
In arbitration, parties in conflict recognise the authority of a third party, who will hear evidence and make a final decision. It is still relatively formal, usually led by senior professionals and facilitated by lawyers if parties agree. The final decision, depending on transnational treaties, could be legally binding in most countries across the world. Since the idea is to arrive at a rapid conclusion without going through court, arbitrations usually eschew out-of-court settlements: the aim is to submit to the arbitrator’s decision.
In mediation, on the other hand, certain formalities can be left aside. Professional mediators are seeking a settlement that is accepted by all parties. They pursue different avenues of action, such as facilitating communication, identifying key points in the dispute and dealing separately with the concerns of the parties. Actors who choose mediation should expect a lot of back-and-forth; but this is not necessarily negative. This is because, unlike arbitration, mediation seeks the closest thing to a win-win solution for all parties.
Now, there are obvious financial reasons to choose arbitration and mediation; either in Spain or the UK. There should be, obviously, a certain willingness to respect that some demands will not be met; that the other party has equal legitimacy to pursue their opinion; and that the third party is trustworthy. In this sense, while a British expat might mistrust a locally-based law firm, Del Canto Chambers has the advantage of being a Spanish firm with UK experience. As a result, these legal experts can inform you of the differences between both legal systems and the advantages of pursuing arbitration or mediation through each country’s legal system.
Are Arbitration and Mediation Respected in the Spanish Legal System?
While Spain had ratified international conventions in previous decades, it was not until 1988 when a specific legal regime was developed to generalise arbitration procedures. It was later updated in 2003 and amended in 2011. Their drafting has always followed United Nations standards on International Trade Law and aligned with other European and global jurisdictions. As a result, the nation’s legal system is perfectly capable of handling both domestic and international processes of arbitration.
This is even the case when arbitration or mediation are not explicitly mentioned in the text of the law. For instance, the Spanish Building Act does not include either of them as dispute resolution mechanisms. However, real estate, property and finance issues are regularly referred to a multiplicity of bodies in Spain in charge of arbitration and mediation. These include, for example, the Spanish Arbitration Court and the Civil and Commercial Arbitration Court of Madrid. On the whole, it is understood they take longer in reaching a decision; which can be a benefit for foreign corporations and citizens seeking justice in Spain.
In fact, recent surveys show that almost half of those companies seeking legal aid are more and more turning to a mixture of mediation and arbitration to solve disputes. Most of these are corporations with annual turnovers in the billions, mostly in Real Estate and Building disputes. This trend will be unaffected by Brexit, as the agreements described above are independent of EU law and regulations.
What Are Some Formal Requirements to Validate Arbitration and Mediation in Spain?
For arbitration and mediation outcomes to be legally binding in Spain, it is important to ensure that one is working with registered lawyers; like those at Del Canto Chambers. This is because, to begin with, there is no specific formatting set for documents. However, both parties must ensure there is a proper record of their negotiation and agreement to ensure that it can be enforced in the future. Agreeing to a certain style of contract beforehand can be a safe way of avoiding conflict.
It is also important for Spanish authorities to analyse the full extent of whatever is being disputed. They will be concerned, for example, if parties have not been careful in selecting disputes for arbitration: if they only pick a particular clause within a contract, they could request that it is the full contract instead that should be discussed through the arbitration procedures. They are also very reticent to open up the arbitration agreement to parties not originally included within it, as they are concerned this could alter the conditions under which the agreement was originally reached. All of these issues can be prevented with effective legal advice.
How do Arbitration and Mediation Procedures Work in Spain?
As in any other countries, the procedure itself is allowed to be flexible and defined by the parties. Location, timing, order of disputes… There is no specific way of arranging those. Parties will also be able to define the type of “evidence” that can be accepted, with arbitrators later providing a second opinion. The competent Court can also assist in taking and securing evidence. Despite this freedom to arrange it, it is in any case common for the latter to adhere to international rules on evidence and its presentation.
In fact, one key international trend is the tendency to shorten arbitration and mediation proceedings. The International Chamber of Commerce employs Expedited Procedure Rules, whereby smaller claims that do not exceed EUR 100,000 can use this simplified approach. With regard to the selection of arbitrators, usual rules apply: odd numbers, no set profession or background for all; but at least one jurist within the arbitration tribunal.
Of course, parties might disagree on who will arbitrate. If there is only one expected arbitrator, the court can make an appointment. If there are three, one party will pick one arbitrator and these two will pick a third one. A myriad of criteria is used to understand impartiality with regard to arbitrators. Nationality, background, occupation… As a result, it is advisable that you consult with legal experts like Del Canto Chambers before starting any process. This is because selected arbitrators can only be challenged and replaced within a set time frame and under very specific rules. Without professional advice, you could start your mediation or arbitration supervised by an unfair party!
Contact us regarding Mediation & Arbitration
The lawyers and advisors at Del Canto Chambers combine many years of experience and successful cases in Spain
To make a no-obligation enquiry, please call us on +34 91 080 08 85 or fill out the form below.