The Constitution reinforces arbitration as a way to resolve conflicts | Economy

The Constitutional Court has decided to develop its doctrine in favor of arbitration and awards and has issued a sentence that reinforces this way of resolving conflicts. The ruling grants protection to a private company that denounced the violation of the right to effective judicial protection before the decision of the Superior Court of Justice of Madrid (TSJM) to annul an arbitration award that gave it reason in the dispute it had with another company , the latter of a public nature. The basic message that the Constitutional Court launches with its sentence consists of warning that judicial intervention in this type of matter should not have an expansive character.

The company that filed the appeal, Sogeosa, appealed to the guarantee court after the Madrid Supreme Court ruled in favor of the state-owned company Acuamed. Both parties had submitted to the prior arbitration procedure to settle the differences arising in the resolution of a contract related to a hydraulic work. In the aforementioned phase, Acuamed alleged the existence of a criminal case in progress in relation to the financing derived from various contracts, among which the one that was the subject of the arbitration award would be found.

In turn, the award issued, favorable to the company that appealed for protection, considered that the existence of said prior process did not require the suspension of the arbitration procedure, considering that the criminal proceedings indicated by Acuamed were not related to the execution of the contract. which was the subject of the arbitration. However, the Civil and Criminal Chamber of the Superior Court of Justice of Madrid annulled the award on the understanding that the lack of appreciation in the arbitration procedure of the alleged criminal preliminary ruling infringed public order, which, in accordance with the arbitration law, must be respected by arbitral awards.

The Constitutional Court, on the other hand, has come to restrict with its sentence that concept of public order as a generic reason to annul an award. The court of guarantees, in short, has estimated that the TSJ of Madrid carried out a control of the content of the award that exceeds what can be carried out by the courts. Therefore, the Constitutional annuls the judgment appealed against and order that a new one be issued that is respectful of the fundamental right violated, that is, that it does not question the initially agreed award for the aforementioned reason.

concurring vote

The ruling of the Constitutional Court – for which Judge Enrique Arnaldo was the rapporteur – considers that the resolution of the Superior Court of Madrid “does not comply with the external and limited judicial control that the judicial body must carry out on the reasons for the award, which which implies excluding from that control any substantive consideration of their reasoning”. He adds that the result of the judicial action is that “the decision of the arbitrators would have been replaced by that of the Civil and Criminal Chamber” of said TSJ.

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The judgment of the court of guarantees highlights that “the mere discrepancy, although frontal, with the arbitral decision cannot lead to annulment of the award”, since that “is only possible if the duty to motivate the award is violated or it is a decision irrational on the part of the person in charge of settling the dispute.” For the Constitutional Court, “this did not happen” in the resolved case, “because the award was sufficiently reasoned”.

The ruling of the Constitutional Court has a concurring vote -according to the substance, but with his own arguments- of the vice president of the court, Juan Antonio Xiol, who considers that an even more restrictive concept of public order should have been defended as a cause for annulment of an award. . Xiol affirms that “the concept of public order permanently threatens with an undue extension of arbitration control by the jurisdiction that would paradoxically lead to an effect contrary to the principle of public order on which arbitration is based, which is based on the autonomy of the will and has as a consequence respect for the principle of minimal judicial intervention”.