The Spanish Arbitration Act contains only six grounds of challenge for setting aside an award:
The Courts have interpreted these grounds for challenge very narrowly. With respect to the ambit and scope of “public order” in Article 41(1)(f), before this decision, the Courts had consistently held that an award cannot be challenged on its merits (law and fact) and that the Courts do not have the authority to sit in appeal and review the award to correct deficiencies in the same.
The Court has, however, reversed this position with its recently published decision in the dispute between Repos I Repàs, S.L., a Spanish company and Banco Bilbao Vizcaya Argentaria, S.S., a Spanish Bank.
This decision has created a lot of apprehension regarding Madrid, Spain, as a seat for arbitration. Since this decision, the Court has rendered two more judgements (unpublished as of now) setting aside an arbitral award after conducting a review of the merits of the case. It could be argued that the approach of the Spanish Courts has been influenced by the financial crisis and social pressure vis-à-vis banking disputes but the judgement of the Court does undoubtedly impact every future arbitration taking place in Spain.
 REPOS I REPÀS, S.L. v. BANCO BILBAO VIZCAYA ARGENTARIA, S.A. Sentencia Nº 13/2015
By : Adv. Niharika Dhall
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