Time is of the essence when arbitrating in Spain. The Spanish Arbitration Act 2003 sets a time limit of six months for arbitrators to decide disputes, subject to a discretionary extension of no more than two months. This time limit is applicable to all arbitration proceedings whose seat is in Spain. If the time limit expires without an award being issued, the proceedings and the office of the arbitrators automatically terminate. This rule constitutes a departure from the UNCITRAL Model Law and is seen by some practitioners as unhelpful to Spain’s ambition of attracting greater numbers of international arbitrations. This article analyses the legal effects of this rule, considering whether it is possible for parties to depart voluntarily from the rule, how the rule interacts with specific arbitration rules applicable to the dispute which contain different provisions or no provision at all regarding time limits, and what the legal consequences are for an award issued after the expiry of the time limit. The article finally discusses the impact the rule may have on Spain’s aspirations in the international arbitration market, considering whether it is a hindrance or whether it may in fact constitute a competitive advantage that enables Spain to promote itself as a jurisdiction where parties can arbitrate without unnecessary delay.
Iurgium [previously Spain Arbitration Review]