Arbitration as an alternative dispute resolution method
Conflicts between natural or legal persons can be resolved through a negotiated solution between the parties (autocompositive method), such as mediation, in which The mediator is responsible for promoting proper communication between the parties so that they reach an agreement. In addition, this agreement may acquire the same value of executive title when it is elevated to a public deed.
On the other hand, conflicts can also be resolved in a heterocompositive way, through the intervention of a third party to whom they submit voluntarily or binding (arbitration and litigation) that imposes a solution.
Arbitration in Spain is configured as an alternative method of dispute resolution to the judicial process. Its popularity is increasing as time goes by due to the advantages it presents over other methods.
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First of all, the flexibility enjoyed by the arbitration procedure is one of the main reasons why companies choose this method of dispute resolution. conflicts. This flexibility translates into the possibility for the parties to choose between ad hoc arbitration, that is, by means of an arbitrator without an arbitral institution that administers the procedure, or by choosing an arbitral institution of their choice. (CAM, CIAM, ICC, LCIA…). In any case, there will be some rules that will govern the procedure, either those chosen by the parties (such as UNCITRAL Arbitration Rules) in an ad hoc arbitration, or those of the arbitral institution that parties have chosen. In addition, the parties may choose the place where the hearings take place. This clashes head-on with what happens in the judicial process, where the power of decision of the parties is limited or is sometimes non-existent.
Second, efficiency is another of the benefits of arbitration. While a judge in Spain in the commercial field usually takes 3 years on average to resolve a lawsuit, an arbitrator will issue an award normally between 1 and 6 months, depending on its complexity. However, the cost of arbitration is usually higher than that of the judicial process. For more information about the cost of arbitrations, in institutional arbitrations, you should visit the website of the arbitration institution that you want to choose and you can obtain an estimated budget (i.e. https://www.arbitramadrid.com/web/guest/calculador-de-costes)
On the other hand, the parties should think about the efficacy of the decision rendered. This aspect will have more or less relevance depending on the type of dispute.
- For issues of a national nature, both the arbitration award and the final judgment are easily enforceable. The only difference is that, in case of non-compliance by one of the parties, the award is subject to execution by the State (a court), while the final judgment may be delivered by the same court that judged the fact.< /li>
- Regarding the effectiveness of arbitral awards in the international arena, thanks to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), signed and ratified by 166 States, the recognition of awards foreigners is fast and efficient. On the other hand, for the recognition of foreign judgments, it will be necessary to comply with the provisions of Regulation (EU) No 1215/2012 of the Parliament and of the European Council of December 12, 2012 regarding judicial jurisdiction, recognition and enforcement of judicial decisions in civil and commercial matters (within the European Union), or to the specific agreement signed between Spain and the country where the sentence was issued or where it is to be executed, or failing that, by the rules of private international law Spanish.
Fourth, another big difference is the absence of a second instance in the arbitration procedure. This is because this method is configured to achieve higher efficiency and faster resolution to execute. Some arbitral institutions consider the possibility that the institution review the award at the request of a party to verify that the procedural guarantees have been fulfilled and that this award will not be subsequently annulled. However, said review should not be understood as a second instance. Finally, the award may be challenged by the courts of a State if it meets the requirements stipulated in its national legislation regarding the challenge of arbitral awards (few reasons assessed, such as that the resolution goes against public order, that a party has not had the opportunity to present his case and defend himself against his opponent…). In Spain, these reasons are specified in article 41 of Law 60/2003, of December 23, on Arbitration. The fact that there is only one hearing may cause the costs of the arbitration procedure to be lower than that of the judicial process.
Additionally, the arbitrator or arbitrators may be chosen by the parties, the arbitral institution and/or the court, in depending on the matter of arbitration, and the number of arbitrators stipulated (always an odd number: 1, 3 or 5). Additionally, this arbitrator chosen by the parties may be a lawyer specialized in the subject matter of the dispute, while the national judge is not always specialized in said controversy. On the other hand, the arbitration procedure is confidential, so the court will not give any type of information or publicity about what was processed.
Finally, note that not all matters in dispute may be subject to arbitration. However, as far as the employer or natural person is concerned, most commercial and civil contracts may be submitted to arbitration.
In short, the advantages of arbitration over the national judicial process are its flexibility and non-formalism, speed and agility, efficiency, the possibility of choosing a neutral forum, the specialization of the arbitrator and the confidentiality of the procedure.
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