Mediation as an instrument to solve conflicts in compliance related issues and international contracts
9 abril 2025
- Mediación
- Arbitraje
- Litigios
Summary: Companies with international projection and global presence can count on mediation and its benefits in the different contexts of their business, both in the compliance of the code of conduct and internal rules as well as in the compliance of contracts and projects with third parties or public authorities. In the same way, it facilitates access to a saturated justice system, while at the same time improving the relationship between the parties, as they do not have to face the wear and tear of the judicial phase, which leads to emotional wear and tear.
I will focus on the intersection between compliance and mediation, as international corporations are increasingly interested in the potential of Mediation applied to compliance frameworks. Although there are a few important challenges that we need to mention, the benefits of international mediation are clear: costs savings, quick solutions and a good understanding between the parties. International mediation and compliance go hand in hand and, although they may not seem to have much in common, they complement each other. The purpose of this article is to illustrate with some practical examples the advantages of compliance mediation for small and medium-sized enterprises operating internationally, in order to demonstrate the potential that exists in this combination.
Mediation is a form of alternative dispute resolution (ADR) that involves the intervention of a neutral third party, known as the mediator, to help disputing parties reach a mutually acceptable agreement. Unlike litigation, which involves a judge making a binding decision, mediation allows the parties to control the outcome, facilitating a more collaborative and flexible approach to resolving disputes.
In the context of compliance issues and international contracts, mediation offers a unique advantage by addressing both legal and non-legal aspects of disputes, such as cultural differences, business practices, and organizational relationships. This flexibility is particularly important when dealing with international contracts, where cross-cultural understanding and respect for diverse legal systems are essential.
The key is still the same recipe as the initial negotiation of a contract. The parties objectively and in a neutral atmosphere and collaborative approach, find ‘solutions’ to their disagreements where both parties win. The so-called win-win is still the best scenario in which the parties should meet again in dispute resolution. I always insist on the word ‘reconnect’ because of its positive connotation in any relationship. Mediation allows the parties to negotiate a mutually acceptable outcome, preserving the relationship between them, with the additional value of cost and time efficiencies and confidentiality guaranteed throughout the process.
Mediation benefits compliance programmes in two keyways.
Resolving internal compliance issues
This is accomplished through facilitating communication and conflict resolution among employees, promoting a culture of dialogue, transparency and accountability. When a company uses mediation to resolve conflicts arising from internal compliance-related situations, it helps to prevent a conflict from escalating in proportions both in the form of legal action and disputes that may involve the public administration.
A clear example is conflicts related to the code of conduct, where disputes often arise at the HR level. Another example is that arising from conflicts of interest. In both cases the connection lies in the common goal of promoting ethical behaviour, improving communication and resolving conflicts in a way that helps the employee and the company to follow its internal rules and achieve the required standards.
Mediation opens a space for dialogue and amicable conflict resolution, facilitating employees’ professional and personal growth in a sustained way over time.
Another example can be conflicts related to cross-border labour issues applicable to the same company, whether private, non-governmental organisation or conflicts between private and public companies. The reasons for the conflict may be related to harassment issues or pay inequality issues. For example, the internal pay system within an international organisation should consider the following elements:
- Remuneration represents by far the most important and controversial element of the employment relationship and is of equal interest to the employer and the employee.
- The remuneration system should be based on and consistent with the principles of the organisation.
- The criteria for determining remuneration should be objective and measurable.
- The system should be equitable.
Conflicts often arise around these elements and companies should be transparent, through comprehensive policies, about their position on non-discrimination, harassment or inclusion of their employees within their organisation and the markets in which they operate.
Mediation can be a channel to help find solutions to equality and non-discrimination issues between employees within the same organisation. It also obliges companies to consider the standards of international legislation (e.g. CSRD) when implementing their policies. We are seeing that it is not a ‘nice to have’ but a ‘must have’.
Resolving disputes with external parties
Mediation can be used to enforce commercial contracts or in projects. It helps prevent disputes between companies or between companies and regulators, foster better relations, and ensure compliance standards are met without resorting to litigation. Mediation promotes cooperation between the parties and helps reduce the risk of future contractual violations.
A clear example of the benefits of the use of mediation in compliance arises in the international context where legal certainty is required for both parties, as well as fair and reasonable management of a long-term project. In some cases, there is a public-private element to the dispute as the public sector is involved (either in licensing issues or as a regulatory authority). This may create some confusion in the roles and rights of the parties, which makes perfect sense when the interests of the investor (private equity) and the community or private parties are very diverse.
For context, we might think of environmental, social and governance issues that are receiving serious attention from governments and regulators, given the impact on the planet and the people within the communities where they live. Mediation offers a way to resolve these conflicts by facilitating open communication between the parties involved. For instance, if a company is accused of breaching a country’s environmental regulations, mediation can provide a platform for the company and regulatory authorities to discuss the issues, share concerns, and negotiate a solution that satisfies both parties. Instead of pursuing punitive measures or resorting to lengthy legal battles, mediation can help parties find common ground and craft a solution that supports compliance while preserving business relationships.
A concrete example is mining activities, which contribute greatly to the involvement of foreign entities in resource-rich countries, involving, on a large scale, both foreign and domestic interests, and potentially resulting in pollution and damage to the environment. In addition, there are various problems, especially the use of land for mining activities, which causes friction between mining companies, communities and local governments where mining activities take place. Since these projects take place over a long period of time and involve various interests of both private and public actors as well as communities, mediation is undoubtedly a good way to prevent disputes during the whole process of project development and implementation, offering in conflict situations not only a quick solution for both parties but also a fair and reasonable management of a project in the long term.
Another tool, with elements of mediation, which is recommended for the successful completion of large projects, as for instance construction projects, are Dispute Boards, a panel of one to three members with extensive experience in the field of the contract, who accompany the execution of the contract until the work is completed on time and on budget. This method is not a pure and simple mediation, although it resembles it, because the Dispute Boards, in particular the so-called DAAB (Dispute Avoidance and Adjudication Board), permanently seek to avoid conflict and, if it arises, to encourage the parties to find a solution or to make it binding. I will go into more detail on this subject in another article.
Hereby, we can also mention internal control and auditability towards third parties, be they customers or suppliers. The EU directive (CSDDD) puts the emphasis on indirect suppliers in the supply chain. It is therefore important that when establishing a business or investment partnership, all parties involved have a similar level of compliance with standards. In this regard, framework compliance agreements, which are compliance agreements that regulate the compliance obligations of both parties’ subject to a service contract, are very common.
Aspects of compliance in such contracts may include, among others, anti-corruption policy, fee evasion, international sanctions, trainings, reporting requirements and ways to audit the compliance clauses agreed in the service contract, as well as the escalation clause to resolve disputes amicably, using the various existing ADR modes.
In the context of commercial contracts, mediation is used to resolve disputes related to non-performance, late deliveries, payment problems, interpretations of clauses or any other dispute arising from a commercial agreement, including any aspect of the compliance agreement as referred to above.
For an internationally developing company it would be advisable to promote mediation as the type of dispute resolution in conflicts with third parties. One way to promote mediation as an effective means of dispute resolution could be through a clause of voluntary submission to mediation in all transactions with third parties, followed by arbitration or submission to the courts of a certain jurisdiction, known as a tiered dispute resolution clause. These clauses provide for a gradual system of dispute resolution following various alternative methods of resolving disputes, usually culminating in arbitration if the outcome of the first alternative methods is unsuccessful.
The choice of conflict resolution through mediation is a ‘win-win solution’, whose confidentiality is guaranteed in the face of public attention. Based on these advantages, mediation is considered more suitable to be implemented (agreed, including with the escalation clause) in a contract.
Challenges of Mediation in International Contract Disputes
Despite its many advantages, mediation is not without its challenges. Some of the key obstacles include:
Lack of Enforcement Mechanisms: Mediation agreements are typically non-binding, meaning that parties are not legally required to adhere to the terms of the settlement. While mediation can result in a mutually agreed-upon solution, enforcing the agreement may require the parties to enter into further negotiations or even resort to litigation if one side fails to honour the agreement.
Cultural and Language Barriers: In international contract disputes, cultural differences and language barriers can complicate the mediation process. It is important to select mediators who have experience with cross-cultural communication and who understand the legal systems involved. Without such expertise, the mediation process may be ineffective.
Reluctance to Mediate: Some parties may be reluctant to mediate, especially if they perceive it as a sign of weakness or if they are unfamiliar with the process. This reluctance can be overcome with proper education and a clear understanding of the benefits of mediation.
Although we can say that there is a growth of mediation around the world and the level of satisfaction of the use of mediation is based on its core values, which are impartiality, confidentiality and self-determination, the promotion of the mediation is still an important challenge.
Conclusion
In the case of internal compliance, mediation usually takes a more reactive role, i.e. when the conflict has already surfaced within the company or organisation; whereas, in the case of third party compliance, mediation takes a preventive role, such as in the case of Dispute Boards, although it also helps to resolve a commercial conflict between parties who wish to continue to maintain a business relationship. In both cases the objective is the same, to try to find common ground between the interests of the parties in order to resolve or avoid a conflict that could lead the parties to a legal dispute.
As international trade continues to grow and the complexity of global regulations increases, businesses and organizations can benefit from adopting mediation as a strategic method for resolving conflicts. By fostering cooperation and understanding, mediation can help build stronger, more resilient business relationships and ensure long-term success in a global marketplace.
Companies need to adhere to their own compliance programmes, but also to the programme of their customers, suppliers or banks with whom they collaborate. Not only is there a need for expertise to know the legal framework applicable to the industry, but there is also a need for conflict resolution when conflicts arise or even to act pre-emptively. Legal battles are expensive, time-consuming and damaging to business relationships. Many jurisdictions and industries are already demanding an obligation for parties to exhaust alternative dispute resolution methods before moving to the litigation phase.
El arbitraje es un procedimiento para resolver los conflictos entre las partes que tiene gran éxito en el sistema legal anglosajón. Y bastante menos en nuestro país.
Tiene ventajas e inconvenientes; es más caro que los Tribunales, pero es mucho más rápido; y la velocidad es esencial para que la justicia sea tal.
Típicamente un arbitraje dura seis meses más un par de ellos para el nombramiento del árbitro; en total, en 8 meses puede estar definitivamente resuelto un conflicto, por importante y difícil que pueda ser.
Por comparar con los Tribunales, en España hoy debemos contar con unos 18 meses de media para tener sentencia en primera instancia y otro tanto para el recurso de apelación; sin contar con posible recurso ante el Tribunal Supremo.
La piedra angular sobre la que descansa el arbitraje es que el laudo del árbitro es final y definitivo y no admite revisión ni recurso; esta afirmación tiene determinadas excepciones fundamentalmente de carácter formal o procedimental: básicamente, la legalidad del convenio arbitral, la arbitrabilidad de la materia y la regularidad procedimental en el desarrollo del procedimiento arbitral. Estos vicios o defectos pueden ser atacados a través de un recurso de anulación del que si entiende la jurisdicción ordinaria.
Pero además de los posibles defectos “formales”, la acción de anulación del laudo puede apoyarse en la denuncia de una infracción del “orden público” que el Tribunal Constitucional ha definido y perfilado como “aquellos principios jurídicos públicos y privados, políticos, morales y económicos que son absolutamente obligatorios para la conservación de la sociedad en un pueblo y en una época determinada”.
Como esta definición de “orden público” es, indudablemente, amplia e inconcreta, el recurso a la vulneración del orden público como herramienta para declarar la nulidad de los laudos por la jurisdicción ordinaria, ha producido un efecto de “desbordamiento” que ha exigido, en palabras del Tribunal Constitucional “llevar a cabo una interpretación restrictiva del misma so pena de vulnerar la autonomía de la voluntad de las partes y su renuncia a la tutela jurisdiccional”.
Así lo ha proclamado dicho Tribunal en la muy importante sentencia de 15 de febrero pasado que motiva esta nota.
En estos últimos años el Tribunal Superior de Justicia de Madrid ha recurrido al argumento del “orden público” de manera extensiva y “desbordada” para anular laudos y “suplir al tribunal arbitral en su función de aplicar el derecho”, convirtiéndose en “una segunda instancia revisora de los hechos y derechos aplicados en el laudo, un mecanismo de control de la correcta aplicación de la jurisprudencia”.
Y esta interpretación del orden público expansiva y “desbordada” como herramienta para anular laudos por parte del TSJM se había convertido en un grave problema para la institución arbitral y para la confianza de los contratantes a la hora de incluir convenios arbitrales en sus contratos; el principio de que el laudo era la solución definitiva y final al conflicto que pretende resolver, salvo por infracciones procedimentales o infracción del orden publico limitado a aquellos casos en los que el laudo fuera arbitrario, ilógico, absurdo o irracional, quedaba en entredicho y suponía un elemento claramente disuasorio a la hora de que los contratantes decidieran resolver sus discrepancias por medio de arbitraje.
Pues bien, el Tribunal Constitucional de manera rotunda y explicita, repitiendo lo que ya adelantó en su sentencia de junio del año pasado, confirma que la necesidad de que el laudo no contravenga el orden público, no puede traer como consecuencia que el órgano judicial supla al árbitro en su función de aplicación del derecho, ni puede convertirse en una segunda instancia revisora de los hechos y de los fundamentos de derecho aplicados en el laudo ni un mecanismo de control de la correcta aplicación de la jurisprudencia.
Prima el principio de la autonomía de la voluntad de las partes; y ello significa que cuando existe sometimiento a arbitraje, las partes han convenido que debe ser a través de ese cauce como han de resolverse las controversias entre ellas, mediante la decisión del arbitro que solo podrá ser anulada a través de los estrictos cauces que la propia Ley de Arbitraje regula; insistimos, por razones procedimentales o por vulnerar el orden público en la interpretación restringida que explica la sentencia que comentamos; pero en ningún caso, a modo de una segunda instancia donde se re -evalúen de nuevo los hechos y los fundamentos de derecho aplicados.
En suma, el arbitraje español está de enhorabuena, y podrá recuperar el impulso que le hizo perder, en parte, la interpretación extensiva del orden público que defendían algunos Tribunales Superiores de Justicia. A partir de ahora los Tribunales no podrán soslayar la interpretación del Tribunal Constitucional que supone un soplo de aire fresco para el arbitraje español.
In an important and very reasoned judgment delivered by the Court of Cassation of France on September 30, 2020, relating to the enforceability of arbitration clauses in international consumer contracts, the Supreme Court judged that these clauses must be considered unfair and cannot be opposed to consumers.
The Supreme Court traditionally insisted on the priority given to the arbitrator to decide on his own jurisdiction, laid down in Article 1448 of the Code of Civil Procedure (principle known as «competence-competence», Jaguar, Civ. 1re, May 21, 1997, nos. 95-11.429 and 95-11.427).
The ECJ expressed its hostility towards such clauses when they are opposed to consumers. In Mostaza Claro (C-168/05), it referred to the internal laws of member states, while considering that the procedural modalities offered by states should not “make it impossible in practice or excessively difficult to exercise the rights conferred by public order to consumers (“Directive 93/13, concerning unfair terms in consumer contracts, must be interpreted as meaning that a national court seized of an action for annulment of an arbitration award must determine whether the arbitration agreement is void and annul that award where that agreement contains an unfair term, even though the consumer has not pleaded that invalidity in the course of the arbitration proceedings, but only in that of the action for annulment”).
It therefore referred to the national judge the right to implement its legislation on unfair terms, and therefore to decide, on a case-by-case basis, whether the arbitration clause should be considered unfair. This is what the Court of Cassation decided, ruling out the case-by-case method, and considering that in any event such a clause must be excluded in relations with consumers.
The Court of Cassation adopted the same solution in international employment contracts, where it traditionally considers that arbitration clauses contained in international employment contracts are enforceable against employee (Soc. 16 Feb. 1999, n ° 96-40.643).
The Supreme Court, although traditionally very favourable to arbitration, gradually builds up a set of specific exceptions to ensure the protection of the «weak» party.
Unfair commercial behaviours between professionals are sanctioned in Sections L442-1 and seq. of the French Commercial Code. French Courts tend to consider that those dispositions of the Commercial Code are mandatory, in particular Section L442-1, II of the Code on abrupt termination of commercial relationships. Based on this section, an operator can be held liable if he terminates a commercial relationship without respecting a prior notice which duration depends on the duration of the relationship.
Although this is considered to be a mandatory law, the French Supreme Court considers that it does not preclude to bring a dispute before foreign Courts in compliance with a jurisdiction clause (Civ.1, 8 July 2010, Doga, n°09-67013). Moreover, Courts have ruled for a long time now that arbitrators are entitled to apply national mandatory laws (Court of Appeal of Paris, 19 March 1993, Labinal, n°9221091). In the case Doga above quoted, the Court concluded that arbitrators are also entitled to apply Sections 442-1, II of the Commercial Code related to the conditions of termination of commercial relationship. Therefore, if a contract contains an arbitration clause, the judge is obliged to give priority to the arbitrators to decide on their own jurisdiction to decide on the case (principle « compétence-compétence ») in conformity with Section 1465 of the French Procedural Code. This solution was confirmed in a recent decision rendered on 5 September 2019 by the Court of Appeal of Paris in Charlivari v. Sté Equivalanza, n°17/03703.
It is noteworthy to underline that two sets of sanctions are considered under Sections 442-1 and seq. of the Commercial Code: the first sanction allows the victim of unfair practice to seek damages (for instance for abrupt termination of commercial relationship) against the author of unfair practices; the second sanction is decided by the public administration, under the authority of the Ministry of Economics : the Ministry is entitled to bring the case to Courts, which can then decide to fine the party who is liable of unfair practices (the fine can be up to 5% of the turnover made in France by the person liable or 5 Million EUR).
Therefore, one single matter can give rise to two procedures at the same time, the first one initiated by the victim and the second one at the request of the Ministry of Economics (Section L442-4 of the Code). In a case Apple v. Ministre de l’Economie, the Supreme Court (Civ.1, 6 juillet 2016, n° 15-21811) considered that the action of the Ministry of Economics cannot be decided by arbitrators, even if the contract contains an arbitration clause, because of the specificity of this action, which is not based on the contract by itself but on powers that the Ministry draws from the law.
Therefore, a clear distinction must be made between the two procedures: one is subject to the application of the dispute resolution clause (either national Courts, even foreign, or arbitration tribunals), when damages are sought from the author of unfair practices, including abrupt termination; the other one can be brought only before French national Courts, and the dispute resolution clause has no effect, in cases which are brought by the Ministry of Economics for administrative sanctions against the same author.
El procedimiento arbitral en España se caracteriza, y constituye una de sus grandes ventajas, por la dificultad de anular o revocar judicialmente el laudo; las partes saben que el laudo que se dicte es en la mayoría de los casos firme y definitivo y pone punto final al conflicto.
El art. 41 de la Ley de Arbitraje únicamente permite la anulación del laudo por razones de forma (inexistencia o invalidez del convenio arbitral, falta de notificación a alguna de las partes sobre la designación del árbitro o de las actuaciones arbitrales, indebida designación de los árbitros o que los árbitros hayan resuelto sobre materias que no eran o no podían ser objeto de arbitraje por imperio de la ley). Y adicionalmente el laudo también es anulable cuando es contrario al “orden público”.
Que cosa sea el “orden público” como para dar lugar, en caso de vulneración, a la anulación del laudo, es cuestión que de siempre ha sido controvertida y debatida; ya en la Convención de Nueva York de 1958 se alude el “orden público” como causa de denegación del reconocimiento de laudos extranjeros. Como recuerda el Tribunal Constitucional (“TC”) en la sentencia que comentamos, citando su propia jurisprudencia, “el orden público material es el conjunto de principios jurídicos públicos y privados, políticos, morales y económicos que son absolutamente obligatorios para la conservación de la sociedad en un pueblo y en una época determinada y el orden público procesal se configura como el conjunto de formalidades y principios necesarios de nuestro ordenamiento jurídico procesal y solo el arbitraje que contradiga alguno o algunos de tales principios podrá ser tachado de nulo por vulneración del orden público”.
A título de ejemplo, durante 2018 se presentaron 38 demandas de anulación de laudos ante los Tribunales Superiores de Justicia (“TSJ”) de los que 31 se fundamentaban en vulneración del orden público; resultaron estimadas 8 de las demandas (21%), 5 por vulneración del orden público y 3 por invalidez del convenio arbitral.
El TSJ de Madrid ha venido manteniendo en los últimos tiempos una interpretación muy “expansiva” del orden público, lo que ha generado dudas y temores en las instituciones y Cortes Arbitrales, por el efecto disuasorio que dicha posición podría tener a la hora de elegir Madrid como sede de arbitrajes, nacionales o internacionales.
Y en la línea interpretativa a la que nos referimos, el TSJ de Madrid ha mantenido el siguiente y sorprendente criterio: dictado un laudo e interpuesta demanda de anulación por una de las partes, los litigantes alcanzaron un acuerdo extrajudicial y solicitaron conjuntamente el archivo de la demanda de anulación; es decir, ambos daban el laudo por bueno y definitivo; el TSJ rechazó la petición y siguió adelante hasta dictar sentencia anulando el laudo, argumentando que como la demanda de anulación se basaba en la infracción del orden público, entonces ya la materia no era disponible por las partes y no era, en opinión del Tribunal, susceptible de transacción o renuncia.
No era esta la primera vez que el TSJ adoptaba esta postura: impetrada la anulación de un laudo por ser contrario al “orden público”, las partes ya no tenían la posibilidad de transar y renunciar a la demanda de anulación.
Por primera vez el asunto ha llegado al Tribunal Constitucional (TC): en un reciente fallo del 15 de junio de 2020, el TC ha sido claro y rotundo; recuerda en su sentencia que el proceso civil se fundamenta en el principio de “disposición de las partes para regular sus intereses privados, es decir, para iniciar la actividad jurisdiccional, determinar el objeto del proceso y ponerle fin cuando estimen conveniente”. Es lo que llamamos “justicia rogada”; y este principio aplica no solo a los procedimientos civiles ante los tribunales ordinarios sino también a los procedimientos arbitrales; asimismo afirma la sentencia que el arbitraje está configurado por la Ley como un mecanismo heterónomo de resolución de conflictos al que es consustancial la mínima intervención de los órganos judiciales a favor de la autonomía de la voluntad.
Y concluye sentando que la acción de anulación debe ser entendida como un proceso de control externo sobre el laudo que no permite una decisión sobre el fondo de la decisión de los árbitros, al estar tasadas las causas, lo que justifica que “el control de los laudos tenga carácter limitado y solo pueda obtenerse la anulación del laudo en casos excepcionales”.
En suma, entiende y proclama el TC que es contrario al derecho a la tutela judicial efectiva que protege el art. 24 de la Constitución la negativa del Tribunal a reconocer la virtualidad de un acuerdo alcanzado entre los litigantes con fundamento en el poder dispositivo de las partes sin que medie norma prohibitiva que así lo autorice e imponiendo una decisión que subvierte el principio dispositivo o de “justicia rogada” que inspira el proceso civil; por lo que concede el amparo solicitado y ordena retrotraer las actuaciones al momento anterior al auto que denegó virtualidad a la solicitud conjunta de archivo para que el TSJ dicte otra resolución acompasada al criterio del TC.
En suma, no podrá ya nunca más el TSJM impedir a los litigantes transar y poner fin a una demanda de anulación de laudo (como ocurre pacífica y habitualmente con los recursos de apelación o de casación) y además deberá tomar en consideración en adelante la interpretación restrictiva del concepto de orden público que ha establecido el TC en esta importante sentencia. En efecto, el arbitraje español sale muy reforzado con esta sentencia del TC.
Are arbitration and jurisdiction clauses contained in insurance contracts enforceable against a third party which is acting directly against the insurer in third party liability insurances?
Such direct action is admitted by French law in liability insurances, as defined in article 124-3 of the Insurance Code.
In just a few months two radically different approaches have been taken by the French Cour de cassation (Civ.1, 19 December 2018, n°17-28.951) and the ECJ in Assens Havn v. Navigator Management UK Ltd (13 July 2017, C-368/16) and KABEG v. MMA IARD (20 July 2017, C-340/16).
The case submitted to the Cour de cassation represented a third party exercising a direct right of action before French Courts against the insurer of a floating barge which had caused him a damage. The Supreme Court accepted that the insurer could validly oppose the arbitration clause, which was in the policy against the third party, and therefore judged that French Court had no jurisdiction to decide on the case. The Supreme Court applied the well-established principle of Compétence-Compétence – materialized in article 1448 of the French Code de Procédure Civile – to stay the case, considering that the arbitration clause could not be set aside. The Court therefore judged that the applicability of the arbitration clause should be determined by the arbitrators by priority.
A year before, the ECJ had ruled in the opposite direction in a case where a jurisdiction clause was applicable in the insurance policy. In Assens Havn v. Navigator Management UK Ltd, the ECJ stated that the clause could not be opposed to the third party acting directly against the insurer. According to the Court, the insurers’ liability towards the insured has a contractual nature when based on the policy, whereas it is extra-contractual when the liability is based on a direct action from a third party. In a previous ruling the Court had considered (Sté financière et industrielle du Peloux (12 May 2005, C-112/03) that the jurisdiction clause cannot be opposed to the beneficiary of an insurance policy if he is not the policyholder (for instance in a collective insurance).
One sees a clear difference in treatment between arbitration clause and jurisdiction clause when it comes to deciding on their opposability to the victim exercising a direct action against the insurer.
Article 2061 paragraph 2 of the Civil Code states that an arbitration cannot be opposed to a party which has not contracted for the purpose of its business activity. The French Cour de cassation grounded its decision on the fact that the clauses of the main contract could be opposed to the third party. If the latter was entitled to apply the insurance contract, it was therefore entitled to invoke article 2061 paragraph 2 of the Civil Code.
On 29 March 2019 new amendments to the federal law “On arbitration in the Russian Federation” entered into force. This law regulates the order of establishment and activities of arbitration courts and permanently acting arbitration institutions (PAAI) in Russia and applies to resolution of both international and local disputes by arbitration in Russia.
The key amendments relate to granting of rights to foreign arbitration centers to perform functions of PAAIs in Russia. Earlier such rights were granted by the government, but as from 29 March 2019 such functions were transferred to the Ministry of Justice. Ministry of Justice grants the rights to perform functions of PAAIs in Russia to foreign arbitration centers based on recommendations received from the Council on improvement of arbitrations.
As of 31 March 2019, there are only 4 (four) PAAIs authorized to administer disputes by arbitration in Russia and all of them are Russian organizations. In accordance with the latest news the Hong Kong International Arbitration Center (HKIAC) is the first international arbitration center that has recently received a recommendation from the Council on improvement of arbitrations to establish PAAI in Russia and has been approved by the Ministry of Justice to establish PAAI in Russia. In accordance with the law an arbitration center is included in the list of PAAIs in Russia within 15 days from the date of approval by the Council, i.e. by the end of April 2019 HKIAC could become the first international arbitration center authorized to administer international disputes in Russia.
Another issue that should be carefully considered by choosing an arbitration center relate to resolution of disputes between companies established in Russia (local disputes) by international arbitration centers not included in the list of PAAIs in Russia and not authorized to consider local disputes in Russia.
Though there is no direct prohibition established by the Russian law to settle disputes between Russian companies by foreign arbitration centers with the seat of arbitration outside of Russia, the possibility of referral of local disputes to foreign arbitration centers is still questionable. In one of the court decisions that caused disputes in legal community (case# А40-219464/16-52-430) the Russian court of first instance ruled that resolution of local disputes by the foreign arbitration institutions violates public policy in Russia. Notwithstanding the fact that such ruling was dismissed by the higher court instance the risk that the Russian courts might deny recognition of awards of foreign arbitration institutions not included in the list of PAAIs in Russia and not authorized to consider local disputes in Russia cannot be excluded.
Therefore, in situations when the disputes arise between companies established in Russia it would be reasonable to choose arbitration institution included in the list of PAAIs in Russia and authorized to administer local disputes in Russia or, alternatively, agree on resolution of disputes by the Russian commercial courts.
Takeaways
- if you agree in international contracts that the seat of arbitration is in Russia, it would be reasonable to choose the arbitration center included in the list of PAAIs in Russia and authorized to resolve international disputes in Russia.
- If you agree in local contracts to resolve disputes by arbitration, it would be reasonable to choose the arbitration center included in the list of PAAIs in Russia and authorized to resolve local disputes in Russia.
Arbitration is a well-known system for dispute resolutions, and works as an alternative to judicial procedures. Parties are free to choose this system and to submit their conflicts to specific arbitrators or institutions.
It is usually considered that arbitration is a good way to solve conflicts but preferable to those arisen between big corporations or involving important amounts of money. Although this assumption is generally accepted, there is an alternative for distribution disputes suitable for smaller companies and cases with lower amounts claimed.
And here is the essential question: why a manufacturer/franchisor or a distributor/agent/franchisee should choose a specialized arbitration for their agreements instead of a more general one or, even, a judicial procedure? The answer seems clear: an arbitrator with knowledge not only in procedural questions but in substantive matters will be able to better understand the conflict between the parties and, therefore, to grant a better award. Take into account that, for instance in my Country, Spain, a Judge of First instance can deal in the same day with a distribution contract, a construction case, a conflict between heirs, and a discussion in a community of owners. All of this requires the analysis of different facts and completely different legislations and it is true that specific commercial problems do not usually have judges experts in international trading. But, how to choose a good specialized arbitrator? And, how to choose the arbitral procedure and the institution in terms of organization, neutrality, costs and time?
The IDArb was created in 2016 by the International Distribution Institute (www.idiproject.com) in collaboration with the Chambre de Commerce d’Industries et de Services de Genève (CCIG www.ccig.ch) and the Swiss Chambers’ Arbitration Institution (SCAI www.swissarbitration.org) and offers to the distribution sector (distribution, agency, franchising, selective distribution) a specialized, expedited and affordable arbitration procedure, not only for big international corporations but also for smaller cases. In fact, the expedited procedure is particularly foreseen for amounts below one million CHF (approx. 880.000 €).
The objectives and main characteristics of IDArb which make it suitable for all the distribution disputes are:
- A list of specialized arbitrators experts in this particular field is available for ad hoc or institutional arbitration and IDArb is able to assist the parties to choose one of them.
Specialized arbitrators from different countries and legal cultures have been appointed by a Selecting Committee reviewing their experience in one or more fields of distribution law. Therefore, parties can trust that the arbitrator will have concrete skills in the business with an in-depth understanding of the disputed issues. This is not a general knowledge on commercial law, but a concrete one on distribution, expressly verified by the Committee. Parties can even examine some examples of cases in which every arbitrator has been involved in.
- In order to maintain its high quality, the IDArb organizes training seminars for its appointed arbitrators. In these seminars, they are able to discuss about the general management of the arbitration, the procedural aspects and how to solve possible incidents in collaboration with the Institutions and their Rules. This will make all the proceedings more manageable and the possible difficulties more easily solved. Last seminar took place in Geneva in November 8, 2018 and participants have discussed, amongst other subjects, on evidences, witnesses and document production.
- The expedited arbitration procedure permits the parties to have a tailored procedure managed by SCAI under the Swiss Rules of International Arbitration, specially adapted for small disputes in the field of distribution.
- Time is also an essential element: the award in the expedited procedure will be issued in a maximum term of six months (only exceptional circumstances permit the Court to extend such time-limit), and, if parties agree, it can be decided only on documentary evidence.
- Costs are reasonable and known in advance.
- And, as final but important remark, IDArb has also adopted some recommendations where, upon request of the parties, mediation is favoured, the arbitrator my consider giving a preliminary non-binding and provisional assessment of the dispute and should have a pro-active position in order to facilitate an amicable settlement.
To have further information about the clause to use in the contracts, the list of specialized arbitrators, their skills, experience and complete CV, and the recommendations for expedited arbitration, you can follow the link: https://www.idiproject.com/content/idarb-idi-arbitration-project
Los Medios Adecuados de Solución de Controversias como requisito previo al litigio en España
- Litigios
- Mediación
-
España
Bélgica 
EEUU 
Ukraine: new hope for the creditors as the debtors’ concern grows
- Bancario
- Derecho Concursal
-
Ucrania
France | Arbitration clauses in international contracts with consumers are not enforceable
- Arbitraje
- Contratos
-
Francia
The incorporation of limited liability companies in The Netherlands and in Spain
- Derecho Societario
-
Países Bajos -
España
Contacta con Sonia
España – Revisión de laudos arbitrales y orden público
17 marzo 2021
-
España
- Arbitraje
Summary: Companies with international projection and global presence can count on mediation and its benefits in the different contexts of their business, both in the compliance of the code of conduct and internal rules as well as in the compliance of contracts and projects with third parties or public authorities. In the same way, it facilitates access to a saturated justice system, while at the same time improving the relationship between the parties, as they do not have to face the wear and tear of the judicial phase, which leads to emotional wear and tear.
I will focus on the intersection between compliance and mediation, as international corporations are increasingly interested in the potential of Mediation applied to compliance frameworks. Although there are a few important challenges that we need to mention, the benefits of international mediation are clear: costs savings, quick solutions and a good understanding between the parties. International mediation and compliance go hand in hand and, although they may not seem to have much in common, they complement each other. The purpose of this article is to illustrate with some practical examples the advantages of compliance mediation for small and medium-sized enterprises operating internationally, in order to demonstrate the potential that exists in this combination.
Mediation is a form of alternative dispute resolution (ADR) that involves the intervention of a neutral third party, known as the mediator, to help disputing parties reach a mutually acceptable agreement. Unlike litigation, which involves a judge making a binding decision, mediation allows the parties to control the outcome, facilitating a more collaborative and flexible approach to resolving disputes.
In the context of compliance issues and international contracts, mediation offers a unique advantage by addressing both legal and non-legal aspects of disputes, such as cultural differences, business practices, and organizational relationships. This flexibility is particularly important when dealing with international contracts, where cross-cultural understanding and respect for diverse legal systems are essential.
The key is still the same recipe as the initial negotiation of a contract. The parties objectively and in a neutral atmosphere and collaborative approach, find ‘solutions’ to their disagreements where both parties win. The so-called win-win is still the best scenario in which the parties should meet again in dispute resolution. I always insist on the word ‘reconnect’ because of its positive connotation in any relationship. Mediation allows the parties to negotiate a mutually acceptable outcome, preserving the relationship between them, with the additional value of cost and time efficiencies and confidentiality guaranteed throughout the process.
Mediation benefits compliance programmes in two keyways.
Resolving internal compliance issues
This is accomplished through facilitating communication and conflict resolution among employees, promoting a culture of dialogue, transparency and accountability. When a company uses mediation to resolve conflicts arising from internal compliance-related situations, it helps to prevent a conflict from escalating in proportions both in the form of legal action and disputes that may involve the public administration.
A clear example is conflicts related to the code of conduct, where disputes often arise at the HR level. Another example is that arising from conflicts of interest. In both cases the connection lies in the common goal of promoting ethical behaviour, improving communication and resolving conflicts in a way that helps the employee and the company to follow its internal rules and achieve the required standards.
Mediation opens a space for dialogue and amicable conflict resolution, facilitating employees’ professional and personal growth in a sustained way over time.
Another example can be conflicts related to cross-border labour issues applicable to the same company, whether private, non-governmental organisation or conflicts between private and public companies. The reasons for the conflict may be related to harassment issues or pay inequality issues. For example, the internal pay system within an international organisation should consider the following elements:
- Remuneration represents by far the most important and controversial element of the employment relationship and is of equal interest to the employer and the employee.
- The remuneration system should be based on and consistent with the principles of the organisation.
- The criteria for determining remuneration should be objective and measurable.
- The system should be equitable.
Conflicts often arise around these elements and companies should be transparent, through comprehensive policies, about their position on non-discrimination, harassment or inclusion of their employees within their organisation and the markets in which they operate.
Mediation can be a channel to help find solutions to equality and non-discrimination issues between employees within the same organisation. It also obliges companies to consider the standards of international legislation (e.g. CSRD) when implementing their policies. We are seeing that it is not a ‘nice to have’ but a ‘must have’.
Resolving disputes with external parties
Mediation can be used to enforce commercial contracts or in projects. It helps prevent disputes between companies or between companies and regulators, foster better relations, and ensure compliance standards are met without resorting to litigation. Mediation promotes cooperation between the parties and helps reduce the risk of future contractual violations.
A clear example of the benefits of the use of mediation in compliance arises in the international context where legal certainty is required for both parties, as well as fair and reasonable management of a long-term project. In some cases, there is a public-private element to the dispute as the public sector is involved (either in licensing issues or as a regulatory authority). This may create some confusion in the roles and rights of the parties, which makes perfect sense when the interests of the investor (private equity) and the community or private parties are very diverse.
For context, we might think of environmental, social and governance issues that are receiving serious attention from governments and regulators, given the impact on the planet and the people within the communities where they live. Mediation offers a way to resolve these conflicts by facilitating open communication between the parties involved. For instance, if a company is accused of breaching a country’s environmental regulations, mediation can provide a platform for the company and regulatory authorities to discuss the issues, share concerns, and negotiate a solution that satisfies both parties. Instead of pursuing punitive measures or resorting to lengthy legal battles, mediation can help parties find common ground and craft a solution that supports compliance while preserving business relationships.
A concrete example is mining activities, which contribute greatly to the involvement of foreign entities in resource-rich countries, involving, on a large scale, both foreign and domestic interests, and potentially resulting in pollution and damage to the environment. In addition, there are various problems, especially the use of land for mining activities, which causes friction between mining companies, communities and local governments where mining activities take place. Since these projects take place over a long period of time and involve various interests of both private and public actors as well as communities, mediation is undoubtedly a good way to prevent disputes during the whole process of project development and implementation, offering in conflict situations not only a quick solution for both parties but also a fair and reasonable management of a project in the long term.
Another tool, with elements of mediation, which is recommended for the successful completion of large projects, as for instance construction projects, are Dispute Boards, a panel of one to three members with extensive experience in the field of the contract, who accompany the execution of the contract until the work is completed on time and on budget. This method is not a pure and simple mediation, although it resembles it, because the Dispute Boards, in particular the so-called DAAB (Dispute Avoidance and Adjudication Board), permanently seek to avoid conflict and, if it arises, to encourage the parties to find a solution or to make it binding. I will go into more detail on this subject in another article.
Hereby, we can also mention internal control and auditability towards third parties, be they customers or suppliers. The EU directive (CSDDD) puts the emphasis on indirect suppliers in the supply chain. It is therefore important that when establishing a business or investment partnership, all parties involved have a similar level of compliance with standards. In this regard, framework compliance agreements, which are compliance agreements that regulate the compliance obligations of both parties’ subject to a service contract, are very common.
Aspects of compliance in such contracts may include, among others, anti-corruption policy, fee evasion, international sanctions, trainings, reporting requirements and ways to audit the compliance clauses agreed in the service contract, as well as the escalation clause to resolve disputes amicably, using the various existing ADR modes.
In the context of commercial contracts, mediation is used to resolve disputes related to non-performance, late deliveries, payment problems, interpretations of clauses or any other dispute arising from a commercial agreement, including any aspect of the compliance agreement as referred to above.
For an internationally developing company it would be advisable to promote mediation as the type of dispute resolution in conflicts with third parties. One way to promote mediation as an effective means of dispute resolution could be through a clause of voluntary submission to mediation in all transactions with third parties, followed by arbitration or submission to the courts of a certain jurisdiction, known as a tiered dispute resolution clause. These clauses provide for a gradual system of dispute resolution following various alternative methods of resolving disputes, usually culminating in arbitration if the outcome of the first alternative methods is unsuccessful.
The choice of conflict resolution through mediation is a ‘win-win solution’, whose confidentiality is guaranteed in the face of public attention. Based on these advantages, mediation is considered more suitable to be implemented (agreed, including with the escalation clause) in a contract.
Challenges of Mediation in International Contract Disputes
Despite its many advantages, mediation is not without its challenges. Some of the key obstacles include:
Lack of Enforcement Mechanisms: Mediation agreements are typically non-binding, meaning that parties are not legally required to adhere to the terms of the settlement. While mediation can result in a mutually agreed-upon solution, enforcing the agreement may require the parties to enter into further negotiations or even resort to litigation if one side fails to honour the agreement.
Cultural and Language Barriers: In international contract disputes, cultural differences and language barriers can complicate the mediation process. It is important to select mediators who have experience with cross-cultural communication and who understand the legal systems involved. Without such expertise, the mediation process may be ineffective.
Reluctance to Mediate: Some parties may be reluctant to mediate, especially if they perceive it as a sign of weakness or if they are unfamiliar with the process. This reluctance can be overcome with proper education and a clear understanding of the benefits of mediation.
Although we can say that there is a growth of mediation around the world and the level of satisfaction of the use of mediation is based on its core values, which are impartiality, confidentiality and self-determination, the promotion of the mediation is still an important challenge.
Conclusion
In the case of internal compliance, mediation usually takes a more reactive role, i.e. when the conflict has already surfaced within the company or organisation; whereas, in the case of third party compliance, mediation takes a preventive role, such as in the case of Dispute Boards, although it also helps to resolve a commercial conflict between parties who wish to continue to maintain a business relationship. In both cases the objective is the same, to try to find common ground between the interests of the parties in order to resolve or avoid a conflict that could lead the parties to a legal dispute.
As international trade continues to grow and the complexity of global regulations increases, businesses and organizations can benefit from adopting mediation as a strategic method for resolving conflicts. By fostering cooperation and understanding, mediation can help build stronger, more resilient business relationships and ensure long-term success in a global marketplace.
Companies need to adhere to their own compliance programmes, but also to the programme of their customers, suppliers or banks with whom they collaborate. Not only is there a need for expertise to know the legal framework applicable to the industry, but there is also a need for conflict resolution when conflicts arise or even to act pre-emptively. Legal battles are expensive, time-consuming and damaging to business relationships. Many jurisdictions and industries are already demanding an obligation for parties to exhaust alternative dispute resolution methods before moving to the litigation phase.
El arbitraje es un procedimiento para resolver los conflictos entre las partes que tiene gran éxito en el sistema legal anglosajón. Y bastante menos en nuestro país.
Tiene ventajas e inconvenientes; es más caro que los Tribunales, pero es mucho más rápido; y la velocidad es esencial para que la justicia sea tal.
Típicamente un arbitraje dura seis meses más un par de ellos para el nombramiento del árbitro; en total, en 8 meses puede estar definitivamente resuelto un conflicto, por importante y difícil que pueda ser.
Por comparar con los Tribunales, en España hoy debemos contar con unos 18 meses de media para tener sentencia en primera instancia y otro tanto para el recurso de apelación; sin contar con posible recurso ante el Tribunal Supremo.
La piedra angular sobre la que descansa el arbitraje es que el laudo del árbitro es final y definitivo y no admite revisión ni recurso; esta afirmación tiene determinadas excepciones fundamentalmente de carácter formal o procedimental: básicamente, la legalidad del convenio arbitral, la arbitrabilidad de la materia y la regularidad procedimental en el desarrollo del procedimiento arbitral. Estos vicios o defectos pueden ser atacados a través de un recurso de anulación del que si entiende la jurisdicción ordinaria.
Pero además de los posibles defectos “formales”, la acción de anulación del laudo puede apoyarse en la denuncia de una infracción del “orden público” que el Tribunal Constitucional ha definido y perfilado como “aquellos principios jurídicos públicos y privados, políticos, morales y económicos que son absolutamente obligatorios para la conservación de la sociedad en un pueblo y en una época determinada”.
Como esta definición de “orden público” es, indudablemente, amplia e inconcreta, el recurso a la vulneración del orden público como herramienta para declarar la nulidad de los laudos por la jurisdicción ordinaria, ha producido un efecto de “desbordamiento” que ha exigido, en palabras del Tribunal Constitucional “llevar a cabo una interpretación restrictiva del misma so pena de vulnerar la autonomía de la voluntad de las partes y su renuncia a la tutela jurisdiccional”.
Así lo ha proclamado dicho Tribunal en la muy importante sentencia de 15 de febrero pasado que motiva esta nota.
En estos últimos años el Tribunal Superior de Justicia de Madrid ha recurrido al argumento del “orden público” de manera extensiva y “desbordada” para anular laudos y “suplir al tribunal arbitral en su función de aplicar el derecho”, convirtiéndose en “una segunda instancia revisora de los hechos y derechos aplicados en el laudo, un mecanismo de control de la correcta aplicación de la jurisprudencia”.
Y esta interpretación del orden público expansiva y “desbordada” como herramienta para anular laudos por parte del TSJM se había convertido en un grave problema para la institución arbitral y para la confianza de los contratantes a la hora de incluir convenios arbitrales en sus contratos; el principio de que el laudo era la solución definitiva y final al conflicto que pretende resolver, salvo por infracciones procedimentales o infracción del orden publico limitado a aquellos casos en los que el laudo fuera arbitrario, ilógico, absurdo o irracional, quedaba en entredicho y suponía un elemento claramente disuasorio a la hora de que los contratantes decidieran resolver sus discrepancias por medio de arbitraje.
Pues bien, el Tribunal Constitucional de manera rotunda y explicita, repitiendo lo que ya adelantó en su sentencia de junio del año pasado, confirma que la necesidad de que el laudo no contravenga el orden público, no puede traer como consecuencia que el órgano judicial supla al árbitro en su función de aplicación del derecho, ni puede convertirse en una segunda instancia revisora de los hechos y de los fundamentos de derecho aplicados en el laudo ni un mecanismo de control de la correcta aplicación de la jurisprudencia.
Prima el principio de la autonomía de la voluntad de las partes; y ello significa que cuando existe sometimiento a arbitraje, las partes han convenido que debe ser a través de ese cauce como han de resolverse las controversias entre ellas, mediante la decisión del arbitro que solo podrá ser anulada a través de los estrictos cauces que la propia Ley de Arbitraje regula; insistimos, por razones procedimentales o por vulnerar el orden público en la interpretación restringida que explica la sentencia que comentamos; pero en ningún caso, a modo de una segunda instancia donde se re -evalúen de nuevo los hechos y los fundamentos de derecho aplicados.
En suma, el arbitraje español está de enhorabuena, y podrá recuperar el impulso que le hizo perder, en parte, la interpretación extensiva del orden público que defendían algunos Tribunales Superiores de Justicia. A partir de ahora los Tribunales no podrán soslayar la interpretación del Tribunal Constitucional que supone un soplo de aire fresco para el arbitraje español.
In an important and very reasoned judgment delivered by the Court of Cassation of France on September 30, 2020, relating to the enforceability of arbitration clauses in international consumer contracts, the Supreme Court judged that these clauses must be considered unfair and cannot be opposed to consumers.
The Supreme Court traditionally insisted on the priority given to the arbitrator to decide on his own jurisdiction, laid down in Article 1448 of the Code of Civil Procedure (principle known as «competence-competence», Jaguar, Civ. 1re, May 21, 1997, nos. 95-11.429 and 95-11.427).
The ECJ expressed its hostility towards such clauses when they are opposed to consumers. In Mostaza Claro (C-168/05), it referred to the internal laws of member states, while considering that the procedural modalities offered by states should not “make it impossible in practice or excessively difficult to exercise the rights conferred by public order to consumers (“Directive 93/13, concerning unfair terms in consumer contracts, must be interpreted as meaning that a national court seized of an action for annulment of an arbitration award must determine whether the arbitration agreement is void and annul that award where that agreement contains an unfair term, even though the consumer has not pleaded that invalidity in the course of the arbitration proceedings, but only in that of the action for annulment”).
It therefore referred to the national judge the right to implement its legislation on unfair terms, and therefore to decide, on a case-by-case basis, whether the arbitration clause should be considered unfair. This is what the Court of Cassation decided, ruling out the case-by-case method, and considering that in any event such a clause must be excluded in relations with consumers.
The Court of Cassation adopted the same solution in international employment contracts, where it traditionally considers that arbitration clauses contained in international employment contracts are enforceable against employee (Soc. 16 Feb. 1999, n ° 96-40.643).
The Supreme Court, although traditionally very favourable to arbitration, gradually builds up a set of specific exceptions to ensure the protection of the «weak» party.
Unfair commercial behaviours between professionals are sanctioned in Sections L442-1 and seq. of the French Commercial Code. French Courts tend to consider that those dispositions of the Commercial Code are mandatory, in particular Section L442-1, II of the Code on abrupt termination of commercial relationships. Based on this section, an operator can be held liable if he terminates a commercial relationship without respecting a prior notice which duration depends on the duration of the relationship.
Although this is considered to be a mandatory law, the French Supreme Court considers that it does not preclude to bring a dispute before foreign Courts in compliance with a jurisdiction clause (Civ.1, 8 July 2010, Doga, n°09-67013). Moreover, Courts have ruled for a long time now that arbitrators are entitled to apply national mandatory laws (Court of Appeal of Paris, 19 March 1993, Labinal, n°9221091). In the case Doga above quoted, the Court concluded that arbitrators are also entitled to apply Sections 442-1, II of the Commercial Code related to the conditions of termination of commercial relationship. Therefore, if a contract contains an arbitration clause, the judge is obliged to give priority to the arbitrators to decide on their own jurisdiction to decide on the case (principle « compétence-compétence ») in conformity with Section 1465 of the French Procedural Code. This solution was confirmed in a recent decision rendered on 5 September 2019 by the Court of Appeal of Paris in Charlivari v. Sté Equivalanza, n°17/03703.
It is noteworthy to underline that two sets of sanctions are considered under Sections 442-1 and seq. of the Commercial Code: the first sanction allows the victim of unfair practice to seek damages (for instance for abrupt termination of commercial relationship) against the author of unfair practices; the second sanction is decided by the public administration, under the authority of the Ministry of Economics : the Ministry is entitled to bring the case to Courts, which can then decide to fine the party who is liable of unfair practices (the fine can be up to 5% of the turnover made in France by the person liable or 5 Million EUR).
Therefore, one single matter can give rise to two procedures at the same time, the first one initiated by the victim and the second one at the request of the Ministry of Economics (Section L442-4 of the Code). In a case Apple v. Ministre de l’Economie, the Supreme Court (Civ.1, 6 juillet 2016, n° 15-21811) considered that the action of the Ministry of Economics cannot be decided by arbitrators, even if the contract contains an arbitration clause, because of the specificity of this action, which is not based on the contract by itself but on powers that the Ministry draws from the law.
Therefore, a clear distinction must be made between the two procedures: one is subject to the application of the dispute resolution clause (either national Courts, even foreign, or arbitration tribunals), when damages are sought from the author of unfair practices, including abrupt termination; the other one can be brought only before French national Courts, and the dispute resolution clause has no effect, in cases which are brought by the Ministry of Economics for administrative sanctions against the same author.
El procedimiento arbitral en España se caracteriza, y constituye una de sus grandes ventajas, por la dificultad de anular o revocar judicialmente el laudo; las partes saben que el laudo que se dicte es en la mayoría de los casos firme y definitivo y pone punto final al conflicto.
El art. 41 de la Ley de Arbitraje únicamente permite la anulación del laudo por razones de forma (inexistencia o invalidez del convenio arbitral, falta de notificación a alguna de las partes sobre la designación del árbitro o de las actuaciones arbitrales, indebida designación de los árbitros o que los árbitros hayan resuelto sobre materias que no eran o no podían ser objeto de arbitraje por imperio de la ley). Y adicionalmente el laudo también es anulable cuando es contrario al “orden público”.
Que cosa sea el “orden público” como para dar lugar, en caso de vulneración, a la anulación del laudo, es cuestión que de siempre ha sido controvertida y debatida; ya en la Convención de Nueva York de 1958 se alude el “orden público” como causa de denegación del reconocimiento de laudos extranjeros. Como recuerda el Tribunal Constitucional (“TC”) en la sentencia que comentamos, citando su propia jurisprudencia, “el orden público material es el conjunto de principios jurídicos públicos y privados, políticos, morales y económicos que son absolutamente obligatorios para la conservación de la sociedad en un pueblo y en una época determinada y el orden público procesal se configura como el conjunto de formalidades y principios necesarios de nuestro ordenamiento jurídico procesal y solo el arbitraje que contradiga alguno o algunos de tales principios podrá ser tachado de nulo por vulneración del orden público”.
A título de ejemplo, durante 2018 se presentaron 38 demandas de anulación de laudos ante los Tribunales Superiores de Justicia (“TSJ”) de los que 31 se fundamentaban en vulneración del orden público; resultaron estimadas 8 de las demandas (21%), 5 por vulneración del orden público y 3 por invalidez del convenio arbitral.
El TSJ de Madrid ha venido manteniendo en los últimos tiempos una interpretación muy “expansiva” del orden público, lo que ha generado dudas y temores en las instituciones y Cortes Arbitrales, por el efecto disuasorio que dicha posición podría tener a la hora de elegir Madrid como sede de arbitrajes, nacionales o internacionales.
Y en la línea interpretativa a la que nos referimos, el TSJ de Madrid ha mantenido el siguiente y sorprendente criterio: dictado un laudo e interpuesta demanda de anulación por una de las partes, los litigantes alcanzaron un acuerdo extrajudicial y solicitaron conjuntamente el archivo de la demanda de anulación; es decir, ambos daban el laudo por bueno y definitivo; el TSJ rechazó la petición y siguió adelante hasta dictar sentencia anulando el laudo, argumentando que como la demanda de anulación se basaba en la infracción del orden público, entonces ya la materia no era disponible por las partes y no era, en opinión del Tribunal, susceptible de transacción o renuncia.
No era esta la primera vez que el TSJ adoptaba esta postura: impetrada la anulación de un laudo por ser contrario al “orden público”, las partes ya no tenían la posibilidad de transar y renunciar a la demanda de anulación.
Por primera vez el asunto ha llegado al Tribunal Constitucional (TC): en un reciente fallo del 15 de junio de 2020, el TC ha sido claro y rotundo; recuerda en su sentencia que el proceso civil se fundamenta en el principio de “disposición de las partes para regular sus intereses privados, es decir, para iniciar la actividad jurisdiccional, determinar el objeto del proceso y ponerle fin cuando estimen conveniente”. Es lo que llamamos “justicia rogada”; y este principio aplica no solo a los procedimientos civiles ante los tribunales ordinarios sino también a los procedimientos arbitrales; asimismo afirma la sentencia que el arbitraje está configurado por la Ley como un mecanismo heterónomo de resolución de conflictos al que es consustancial la mínima intervención de los órganos judiciales a favor de la autonomía de la voluntad.
Y concluye sentando que la acción de anulación debe ser entendida como un proceso de control externo sobre el laudo que no permite una decisión sobre el fondo de la decisión de los árbitros, al estar tasadas las causas, lo que justifica que “el control de los laudos tenga carácter limitado y solo pueda obtenerse la anulación del laudo en casos excepcionales”.
En suma, entiende y proclama el TC que es contrario al derecho a la tutela judicial efectiva que protege el art. 24 de la Constitución la negativa del Tribunal a reconocer la virtualidad de un acuerdo alcanzado entre los litigantes con fundamento en el poder dispositivo de las partes sin que medie norma prohibitiva que así lo autorice e imponiendo una decisión que subvierte el principio dispositivo o de “justicia rogada” que inspira el proceso civil; por lo que concede el amparo solicitado y ordena retrotraer las actuaciones al momento anterior al auto que denegó virtualidad a la solicitud conjunta de archivo para que el TSJ dicte otra resolución acompasada al criterio del TC.
En suma, no podrá ya nunca más el TSJM impedir a los litigantes transar y poner fin a una demanda de anulación de laudo (como ocurre pacífica y habitualmente con los recursos de apelación o de casación) y además deberá tomar en consideración en adelante la interpretación restrictiva del concepto de orden público que ha establecido el TC en esta importante sentencia. En efecto, el arbitraje español sale muy reforzado con esta sentencia del TC.
Are arbitration and jurisdiction clauses contained in insurance contracts enforceable against a third party which is acting directly against the insurer in third party liability insurances?
Such direct action is admitted by French law in liability insurances, as defined in article 124-3 of the Insurance Code.
In just a few months two radically different approaches have been taken by the French Cour de cassation (Civ.1, 19 December 2018, n°17-28.951) and the ECJ in Assens Havn v. Navigator Management UK Ltd (13 July 2017, C-368/16) and KABEG v. MMA IARD (20 July 2017, C-340/16).
The case submitted to the Cour de cassation represented a third party exercising a direct right of action before French Courts against the insurer of a floating barge which had caused him a damage. The Supreme Court accepted that the insurer could validly oppose the arbitration clause, which was in the policy against the third party, and therefore judged that French Court had no jurisdiction to decide on the case. The Supreme Court applied the well-established principle of Compétence-Compétence – materialized in article 1448 of the French Code de Procédure Civile – to stay the case, considering that the arbitration clause could not be set aside. The Court therefore judged that the applicability of the arbitration clause should be determined by the arbitrators by priority.
A year before, the ECJ had ruled in the opposite direction in a case where a jurisdiction clause was applicable in the insurance policy. In Assens Havn v. Navigator Management UK Ltd, the ECJ stated that the clause could not be opposed to the third party acting directly against the insurer. According to the Court, the insurers’ liability towards the insured has a contractual nature when based on the policy, whereas it is extra-contractual when the liability is based on a direct action from a third party. In a previous ruling the Court had considered (Sté financière et industrielle du Peloux (12 May 2005, C-112/03) that the jurisdiction clause cannot be opposed to the beneficiary of an insurance policy if he is not the policyholder (for instance in a collective insurance).
One sees a clear difference in treatment between arbitration clause and jurisdiction clause when it comes to deciding on their opposability to the victim exercising a direct action against the insurer.
Article 2061 paragraph 2 of the Civil Code states that an arbitration cannot be opposed to a party which has not contracted for the purpose of its business activity. The French Cour de cassation grounded its decision on the fact that the clauses of the main contract could be opposed to the third party. If the latter was entitled to apply the insurance contract, it was therefore entitled to invoke article 2061 paragraph 2 of the Civil Code.
On 29 March 2019 new amendments to the federal law “On arbitration in the Russian Federation” entered into force. This law regulates the order of establishment and activities of arbitration courts and permanently acting arbitration institutions (PAAI) in Russia and applies to resolution of both international and local disputes by arbitration in Russia.
The key amendments relate to granting of rights to foreign arbitration centers to perform functions of PAAIs in Russia. Earlier such rights were granted by the government, but as from 29 March 2019 such functions were transferred to the Ministry of Justice. Ministry of Justice grants the rights to perform functions of PAAIs in Russia to foreign arbitration centers based on recommendations received from the Council on improvement of arbitrations.
As of 31 March 2019, there are only 4 (four) PAAIs authorized to administer disputes by arbitration in Russia and all of them are Russian organizations. In accordance with the latest news the Hong Kong International Arbitration Center (HKIAC) is the first international arbitration center that has recently received a recommendation from the Council on improvement of arbitrations to establish PAAI in Russia and has been approved by the Ministry of Justice to establish PAAI in Russia. In accordance with the law an arbitration center is included in the list of PAAIs in Russia within 15 days from the date of approval by the Council, i.e. by the end of April 2019 HKIAC could become the first international arbitration center authorized to administer international disputes in Russia.
Another issue that should be carefully considered by choosing an arbitration center relate to resolution of disputes between companies established in Russia (local disputes) by international arbitration centers not included in the list of PAAIs in Russia and not authorized to consider local disputes in Russia.
Though there is no direct prohibition established by the Russian law to settle disputes between Russian companies by foreign arbitration centers with the seat of arbitration outside of Russia, the possibility of referral of local disputes to foreign arbitration centers is still questionable. In one of the court decisions that caused disputes in legal community (case# А40-219464/16-52-430) the Russian court of first instance ruled that resolution of local disputes by the foreign arbitration institutions violates public policy in Russia. Notwithstanding the fact that such ruling was dismissed by the higher court instance the risk that the Russian courts might deny recognition of awards of foreign arbitration institutions not included in the list of PAAIs in Russia and not authorized to consider local disputes in Russia cannot be excluded.
Therefore, in situations when the disputes arise between companies established in Russia it would be reasonable to choose arbitration institution included in the list of PAAIs in Russia and authorized to administer local disputes in Russia or, alternatively, agree on resolution of disputes by the Russian commercial courts.
Takeaways
- if you agree in international contracts that the seat of arbitration is in Russia, it would be reasonable to choose the arbitration center included in the list of PAAIs in Russia and authorized to resolve international disputes in Russia.
- If you agree in local contracts to resolve disputes by arbitration, it would be reasonable to choose the arbitration center included in the list of PAAIs in Russia and authorized to resolve local disputes in Russia.
Arbitration is a well-known system for dispute resolutions, and works as an alternative to judicial procedures. Parties are free to choose this system and to submit their conflicts to specific arbitrators or institutions.
It is usually considered that arbitration is a good way to solve conflicts but preferable to those arisen between big corporations or involving important amounts of money. Although this assumption is generally accepted, there is an alternative for distribution disputes suitable for smaller companies and cases with lower amounts claimed.
And here is the essential question: why a manufacturer/franchisor or a distributor/agent/franchisee should choose a specialized arbitration for their agreements instead of a more general one or, even, a judicial procedure? The answer seems clear: an arbitrator with knowledge not only in procedural questions but in substantive matters will be able to better understand the conflict between the parties and, therefore, to grant a better award. Take into account that, for instance in my Country, Spain, a Judge of First instance can deal in the same day with a distribution contract, a construction case, a conflict between heirs, and a discussion in a community of owners. All of this requires the analysis of different facts and completely different legislations and it is true that specific commercial problems do not usually have judges experts in international trading. But, how to choose a good specialized arbitrator? And, how to choose the arbitral procedure and the institution in terms of organization, neutrality, costs and time?
The IDArb was created in 2016 by the International Distribution Institute (www.idiproject.com) in collaboration with the Chambre de Commerce d’Industries et de Services de Genève (CCIG www.ccig.ch) and the Swiss Chambers’ Arbitration Institution (SCAI www.swissarbitration.org) and offers to the distribution sector (distribution, agency, franchising, selective distribution) a specialized, expedited and affordable arbitration procedure, not only for big international corporations but also for smaller cases. In fact, the expedited procedure is particularly foreseen for amounts below one million CHF (approx. 880.000 €).
The objectives and main characteristics of IDArb which make it suitable for all the distribution disputes are:
- A list of specialized arbitrators experts in this particular field is available for ad hoc or institutional arbitration and IDArb is able to assist the parties to choose one of them.
Specialized arbitrators from different countries and legal cultures have been appointed by a Selecting Committee reviewing their experience in one or more fields of distribution law. Therefore, parties can trust that the arbitrator will have concrete skills in the business with an in-depth understanding of the disputed issues. This is not a general knowledge on commercial law, but a concrete one on distribution, expressly verified by the Committee. Parties can even examine some examples of cases in which every arbitrator has been involved in.
- In order to maintain its high quality, the IDArb organizes training seminars for its appointed arbitrators. In these seminars, they are able to discuss about the general management of the arbitration, the procedural aspects and how to solve possible incidents in collaboration with the Institutions and their Rules. This will make all the proceedings more manageable and the possible difficulties more easily solved. Last seminar took place in Geneva in November 8, 2018 and participants have discussed, amongst other subjects, on evidences, witnesses and document production.
- The expedited arbitration procedure permits the parties to have a tailored procedure managed by SCAI under the Swiss Rules of International Arbitration, specially adapted for small disputes in the field of distribution.
- Time is also an essential element: the award in the expedited procedure will be issued in a maximum term of six months (only exceptional circumstances permit the Court to extend such time-limit), and, if parties agree, it can be decided only on documentary evidence.
- Costs are reasonable and known in advance.
- And, as final but important remark, IDArb has also adopted some recommendations where, upon request of the parties, mediation is favoured, the arbitrator my consider giving a preliminary non-binding and provisional assessment of the dispute and should have a pro-active position in order to facilitate an amicable settlement.
To have further information about the clause to use in the contracts, the list of specialized arbitrators, their skills, experience and complete CV, and the recommendations for expedited arbitration, you can follow the link: https://www.idiproject.com/content/idarb-idi-arbitration-project
