A recently published judgement (number 3/2019, January 21st) rendered by the Madrid Superior Court of Justice (“TSJM”) partially annulled an arbitral award issued by a sole arbitrator, declaring null the costs allocation made by the arbitrator. The TSJM stated in its judgement that:
“b.- This partial annulment …… leaves the [arbitrator’s] declaration without effect, but the court, given the scope of this annulment action may not complete or substitute the declaration annulled, as requested by the plaintiff, that is, to condemn the respondent to the payment of the costs and expenses caused, since this is not an ordinary judicial action, such as an appeal. This without prejudice to the fact that the plaintiff may exercise the appropriate actions in protection of its rights.”
The TSJM does not mention what “appropriate actions” are available to the party to protect its rights. Though Spanish arbitration law does not provide for this situation, the TSJM in its judgement number 41/2017, June 6th, addressed exactly the same issue. In this case, the TSJM annulled partially the award, declaring null the costs allocation made by the arbitrator. And it stated:
“By virtue of the aforegoing, the issue of costs remains undecided, though this question cannot be decided by this Tribunal, because the scope of this court is limited to its authority to annul, given the purely declaratory nature of the annulment, however, it will have to be the same arbitrator who dictated the annulled award who must decide the issue of the costs, as the award lacks a declaration that must be integrated by legal imperative, as is deduced from article 37.6 of the Arbitration Act…..”
This judgement was referenced positively in obiter dicta in the TSJM’s judgement number 33/2018, June 25th.
Comment: Judgement 3/2019 does not mention the original arbitrator´s duty (and indeed, legitimacy) to issue a new decision related to the issue of costs, and thus reintegrate and complete the award. However, it should be reasonable to assume that the reasoning made in the two previous judgements regarding this issue stands, and that, therefore, the original Arbitral Tribunal is under the obligation to issue a decision on costs and thus complete the award.