On 19 October 2023, the Plenary of the Madrid International Arbitration Center (CIAM) approved its new Rules, which will enter into force on 1 January 2024.
The CIAM was created in 2020 from the merger of the international activity of the three main and most active, in terms of caseloads, arbitral institutions in Spain: the Madrid Court of Arbitration (CAM), the Civil and Commercial Arbitration Court (CIMA) and the Spanish Court of Arbitration (CEA).
The CIAM has, among others, a Best Practices Commission, hosting highly recognized and seasoned practitioners. This Commission is currently presided by Alexis Mourre, and its members include Filipa Cansado, Andrés Jana, Diana Correa, Sabina Sacco, and José Ricardo Feris. The CIAM also has sectorial Working Groups with arbitrators, lawyers and business owners who study and recognize the commercial or user needs. The CIAM currently has 11 Working Groups for sectors such as Construction, Digital Economy, Energy, Tourism and Hotels, Experts, Insurance, Banking and more.
The CIAM new Rules are the result of the joint work of the CIAM’s Chair, José María Alonso, the Best Practices Commission, and the Secretariat, who, with the support of leading international arbitration professionals, have introduced new changes with the aim of strengthening the effectiveness and efficiency of arbitration proceedings.
The Highly Expedited Procedure
The introduction of the highly expedited procedure is among the most innovative changes that the CIAM is bringing about with the new Rules. This procedure was created upon the request of various Working Groups, specifically the Maritime Law Working Group, which highlighted the need to have a highly expedited procedure for the resolution of certain disputes.
This new procedure will be applicable only with the express agreement of the parties, which may be stated in the arbitration agreement or in a subsequent agreement, regardless of the amount in dispute. In this regard, the highly expedited procedure differs from the abbreviated procedure, because the latter is applicable whenever the amount in dispute is below one million euros, without the need for the parties’ agreement.
In practice, the highly expedited procedure begins by means of an express resolution issued by the CIAM upon receipt of the request for the application of this procedure based on the parties’ agreement. Within this procedure, disputes shall be resolved only by a sole arbitrator, who may be appointed by the parties by mutual agreement within seven days or, failing this, shall be directly appointed by the CIAM. In this procedure, no first procedural order shall be issued and no hearings shall be held unless the sole arbitrator deems it necessary.
The main feature of the highly expedited procedure is the parallel processing of the confirmation or appointment of the arbitrator and the written phase of the arbitration. Thus, with a pre-set procedural calendar, the deadline for the filing of the statement of claim starts automatically from the express resolution of the Center to adopt this type of procedure. Finally, the deadline for rendering the award is three months from the filing of the statement of claim. As a result, this procedure hopes to reduce the entire arbitral proceeding to merely four months.
Amendments to Increase Procedural Efficiency
The new Rules aim at significantly improving procedural efficiency through a series of changes that shorten and simplify the arbitral proceedings.
Annex No. 1 of the Rules, relating to the procedures for the nomination, confirmation and appointment of arbitrators, is adapted to clarify internal protocols followed by the CIAM. Moreover, the new Annex allows the CIAM to conduct conflict checks of possible arbitrators, with all due confidentiality safeguards, without the express authorization of the parties. Therefore, thanks to this new system, the duration of the process of appointment and confirmation of arbitrators is expected to be significantly reduced.
The new Rules eliminate the need for terms of reference, as well as the specific deadlines for the filing of the statements of claim and the statement of defense and other procedural milestones. While these characteristics of each dispute will be decided by the arbitrators and the parties, the CIAM provides, as Annex No. 4 to the Rules, a model procedure that can be consulted and applied by arbitrators and parties.
Finally, the new Rules modify the deadlines for requesting correction, clarification, rectification and supplementation of the award. Previously, this type of requests could entail up to three additional months for the duration of an arbitration. Now, the deadline to present these requests is reduced from one month to fifteen days, and the deadline for the arbitrators to decide on them is significantly reduced as well.
Other Procedural Amendments
The CIAM new Rules establish that the decision of emergency arbitrators may be issued in the form of an award or procedural order. This gives flexibility to the arbitrator and the parties to choose the form of the decision that best fits their needs.
The new Rules introduce changes regarding the plurality of parties, intervention of additional parties, joinder and procedural succession. Here, additional criteria are established for the acceptance of joinder of proceedings by the CIAM, such as: (i) that the parties agree on the joinder; (ii) that the claims are formulated under the same arbitration agreement; or (iii) that the arbitration agreements are compatible and the disputes are related. In addition, specific rules have been added regarding defaulting parties and procedural succession upon termination or death of a party.
Costs and Fees
Annex No. 2 to the Rules, relating to arbitration costs and administration and arbitrators’ fees, has also been updated. The distinction between arbitrators’ fees in ordinary and abbreviated proceedings is eliminated, and a single schedule of fees is established to increase transparency and clarity for the users.
The proposed change in the fees, which would use the current abbreviated procedure fee schedule for all proceedings, would result in a 25% reduction in overall costs for ordinary arbitrations and for the new, highly expedited procedure. This reduction is likely to be appreciable in cases with an amount in dispute above one million euros, since in cases involving lesser amounts, the abbreviated procedure would normally be applied in any case.
Conclusion
Time will tell if these substantial modifications strengthen the quality, efficiency, and effectiveness of the services offered by the CIAM and consolidate its reputation as a leading institution in the resolution of international disputes.
To access a detailed technical note with all the modifications to the CIAM new Rules and full text of the new Rules, please visit the CIAM’s website.
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