Partial awards set aside for lack of impartiality of arbitrator and arbitral institution

In a decision dated 4 November 2016, but only recently published, the Madrid High Court of Justice set aside two partial arbitral awards on the following grounds:

> Lack of impartiality of the arbitrator appointed by the court of arbitration

> Lack of impartiality of the arbitral institution itself

The decision was unanimous in respect of the first ground but by majority in respect of the second ground.

While the court's decision to set aside the awards for lack of impartiality (in reality, independence) of the arbitrator appointed by the court of arbitration was unsurprising and standard, the decision holding that the arbitral institution acted impartially is surprising. This is so in part because, as held in the dissenting opinion, in the authors' view there was clearly insufficient evidence to reach this conclusion.

However, most shocking to the Spanish arbitration community was the majority conclusion that the finding that the arbitral institution acted impartially resulted in the invalidity of the arbitration agreement. It is likely that in reaching this conclusion, the court exceeded the powers conferred on it by the Spanish Arbitration Law. (Bajoz Eólica, SL v Caixabank, SA (Judgment No. 70/2016).)

Practical Law UK, 1-Feb-2017.