International Arbitration Report Madrid Update: Adoption Of Interim Measures By The Arbitrators by Calvin Hamilton� and Eva M. Vázquez
Monereo, Meyer & Marinel-lo Madrid, Spain
A commentary article reprinted from the May 2007 issue of Mealey’s International Arbitration Report
MEALEY’S International Arbitration Report
Vol. 22, #5 May 2007
Commentary Madrid Update: Adoption Of Interim Measures By The Arbitrators By Calvin A. Hamilton and Eva M. Vázquez
[Editor’s Note: Calvin A. Hamilton is a partner with the firm Monereo, Meyer & Marinel-lo, Madrid and heads the arbitration department. He is admitted to the New York and the Madrid Bar. Eva M. Vázquez is an associate with the firm and practices in the arbitration department. She is admitted to the Madrid Bar. Copyright 2007 by the authors. Replies to this commentary are welcome.] This commentary addresses the efforts to enforce interim measures through a recording at the Spanish Property Registry encumber the disposition and conveyance of two registered real estate properties. The measures were adopted as part of an arbitral award in order to safeguard the rights of one of the parties to the dispute so as to assure the satisfactory transfer of title to the properties subject to those conditions fixed in the Award. The Spanish Property Registry (“the Registry”) declined to enforce the interim measures, discerning that the measures adopted in the Award can only be enforced by a judicial order. The appropriate appeal to the Registry’s decision was filed in response to the Registry’s decision and which was resolved in the Resolution subject of our commentary( 1). The Appeal was limited to determining weather the interim measure adopted by the arbitrators requires judicial assistance for its enforcement. The General Registry and Notary Directorate (“DGRN”) offers the following analysis: interim
measures are part of the legal process established to ensure the efficiency of judicial tutorship over prescribed judgements or, as in this case, over final arbitral decisions that put an end to controversies. Given that the purpose of the interim measure is to serve as a guarantee for performance (restitutio in integrum), measures can be adopted and maintained in effect, not only before the commencement of the arbitration proceedings or at the commencement, but during the proceedings or at their conclusion, until the judgement is enforced, unless the measures were requested outside the time limit. Accordingly, nothing shall impede any of the parties to the arbitration agreement, either before, during or after the arbitration proceedings, from either petitioning a court to adopt interim measures, or granting such a petition, or from petitioning the arbitration tribunal, which has the power to adopt such measures not only during the arbitration procedure, but in the arbitration award that concludes the arbitration, as a measure aimed at assuring the fulfilment of the award. In the matter subject of the Resolution, the arbitrators handed down an Award which included the time limit and conditions under which the title to real property should be conveyed, in addition to the consequences for failure to meet said time limit and conditions. The Award also provided for the adoption of interim measures consisting of an annotation at the Registry against the properties so as to prevent conveyance of the same in preservation of the rights of one of the parties to the controversy. The measures would remain in effect until the contract obligations are fulfilled or the established terms and conditions are met.
MEALEY’S International Arbitration Report
Vol. 22, #5 May 2007
Upon determination that the measure adopted in the Award is of an interim or guarantee nature, the DGRN decided whether judicial assistance was necessary in order to enforce the measure through a recording with the Registry. The Spanish Civil Procedure Law (the “SCPL”) provides for the adoption of interim measures in arbitration evincing one of the many instances where the ordinary jurisdiction aides the arbitration process(2). In consonance, the new Arbitration Law (the “Act”) reserves jurisdiction for the enforcement of interim measures to judicial authorities, not only in Article 11, where power over said measures is bestowed upon the judiciary, either alternative or concurrently with those of the actual arbitration, but also in Article 23 which recognizes the power of the arbitrators (unless otherwise agreed by the parties) to adopt interim measures necessary in respect of the subject matter of the dispute(3). The recital to the Act states in pertinent part in reference to Artice 23 “. . . needless to say, the arbitral tribunal lacks executive power, with the result that recourse would have to be had to the courts for enforcement of interim measures. . . . Yet if, in the context of such conservatory activity, a distinction can be drawn between the declaratory and the executive sides, the Act acknowledges the arbitrators right to the former, save where otherwise agreed by the parties. This rule neither abolishes nor restricts the possibility, envisaged under Articles 8 and 11 of this Act and Articles 722 and 724 of the Civil Procedure Act, whereby the interested party may apply to court for the issue of interim measures. Arbitral and judicial powers in conservatory matters are alternative and concurrent, subject in all cases to the workings of the principle of good faith(4). In the context of the enforcement of interim measures, such as filing an attachment prohibiting free disposition of real property, the Spanish Mortgage Law (the “SML”) provides for the possibility of bringing suit in an ordinary action for the performance of any obligation, through an Order consistent with the
SML regulating the seizure, or forbiddance against the alienation, of real property(5). Regulations to develop the SML contain rules for all annotations performed by virtue of a judicial decision, which involves the presentation of the decision with a request for an annotation to the Registry including the date of the decision and, where applicable, whether the judgement is final(6). Conclusion
Taking all of this into account, it can be concluded that the assistance of the judge or court of competent jurisdiction will be necessary to enforce the recording of interim measures adopted by the arbitrators. The Act bestows authority on the arbitrators, to adopt interim measures where necessary. However, the Act is silent as to the scope of this authority. In light of the holding of the DGRN, the arbitral tribunal is vested with the power to adopt interim measures while recourse would have to be had to the courts for the enforcement of the said measures.
The General Registry and Notary Directorate Resolution February 20, 2006 (RJ 2006/934).
Articles 722 & 724 of the Spanish Civil Procedure Act.
Spanish Arbitration Act 60/2003 of December 23, 2003.
Section V of the Recital to the Arbitration Act.
Article 42.4 of the Spanish Mortgage Act.
Article 765 of the Regulations to the Mortgage Act. n
Arbitration and the Fisc: NAFTA’s ‘Tax Veto’ by William W. (Rusty) Park Professor of Law at Boston University Vice President, London Court of International Arbitration Arbitrator, Claims Resolution Tribunal for Dormant Accounts in Switzerland
A case of note reprinted from the May 2001 issue of Mealey's International Arbitration Report.
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