SPAIN Law and Practice Contributed by: Pablo Silván and Fernando Manzanedo, Ramón y Cajal Abogados, S.L.P.
3. Substantive Protections and Breaches 3.1 Common Complaints
It is unlikely that this will happen. ISA typically fol- lows international rules (eg, ICSID and UNCITRAL), not domestic Spanish law. If Spanish law applies Article 15 of the Arbitration Act governs arbitrator appointment and if the parties’ method fails, either party may request the compe- tent court (Civil and Criminal Chamber of the Supe- rior Court of Justice) to appoint the arbitrator(s). The court ensures impartiality and independence, and its decision is final. In multi-party cases, the Spanish Arbitration Act does not have a specific provision for joint appointment by multiple claimants or respondents. But courts and institutions may apply equitable solutions (if multiple parties cannot agree on a joint arbitrator, the court may appoint all arbitrators to ensure neutrality). Arbi- tral institutions (eg, Madrid Court of Arbitration and the ICC) often have internal rules for multi-party appoint- ments (common list method or institutional appoint- Most ISA involving Spain are governed by interna- tional treaties (eg, BITs, and the ICSID Convention), which have their own mechanisms for arbitrator appointment. In those cases, Spanish courts do not intervene in the selection process, and their role is limited to recognition and enforcement of awards, or procedural support (eg, interim measures). ment if consensus fails). 4.3 Court Intervention Spanish courts have limited and highly circumscribed powers to intervene in the selection of arbitrators – and only if the arbitration is seated in Spain, and the parties have not agreed on a method for appointing arbitrators, or the agreed method provided for in the international rules fails or is obstructed. Spanish courts cannot intervene arbitrarily. Their powers are strictly procedural and limited to ensuring the appointment process is completed when the parties or institutions fail, verifying that arbitrators meet legal requirements (eg, independence or impartiality) and avoiding undue delay or obstruction of proceedings. Spanish courts cannot override party autonomy or institutional rules (eg, ICSID or UNCITRAL rules) in arbitrations not seated in Spain, unless enforcement
The most frequently cited complaints by investors (especially under the ECT because of Spain’s retroac- tive changes to its renewable energy incentive regime) are as follows. • FET standard (the most invoked standard, by far) and particularly the frustration of investors’ legiti- mate expectations by dismantling a stable regula- tory framework – notably the feed-in tariff system promised under Royal Decree 661/2007, and act- ing in a non-transparent and predictable manner. • Indirect expropriation (less successful, but still fre- quently raised), because of Spain’s regulatory roll- back that deprived investors of expected returns without formal nationalisation. Most tribunals have rejected expropriation claims, arguing that Spain’s actions were regulatory in nature and did not elimi- nate ownership rights. • Breach of contract/umbrella clause, when inves- tors had specific agreements or licences with the Spanish government. Some tribunals have treated regulatory decrees as general legislation, not bind- ing contracts, unless specific commitments were made.
4. The Arbitral Tribunal 4.1 Limits on Selection
ISA typically arises under BITs or multilateral agree- ments like the ICSID Convention or UNCITRAL Rules, rather than under Spain’s domestic Arbitration Act (Law 60/2003). So, the limits on party autonomy are shaped by international frameworks, not Spanish law. Many BITs and other agreements contain specific clauses on arbitrator qualifications, nationality, and
appointment procedures. 4.2 Default Procedures
Spain has default procedures for arbitrator appoint- ment under its Arbitration Act (Law 60/2003), which apply when the parties’ agreed method fails.
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