Lawants Achieves a Landmark Ruling in Spain Recognizing the Contractual Effect of a Foreign Non-Institutional Arbitral Award
For the first time in Spain, a court has recognized the contractual enforceability of a foreign irritual arbitral award—marking a significant step forward for international arbitration and cross-border litigation.
The International Litigation and Arbitration Department at Lawants has achieved a groundbreaking judgment in Spain. For the first time, a Spanish court has acknowledged the contractual effect of a foreign non-institutional (irritual) arbitral award, setting an unprecedented milestone in Spanish judicial practice.
This case highlights not only the innovative legal strategy adopted by our international litigation team, but also Lawants’ position as a leading firm capable of navigating complex cross-border disputes and enforcing foreign decisions under challenging legal frameworks.
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A Complex Cross-Border Commercial Dispute
The dispute involved an Italian agri-food company and a Spanish trading firm that, in 2022, entered into several contracts for the sale of more than 15,000 tonnes of soybean oil. The contracts included a dispute resolution clause referring potential conflicts to a non-institutional arbitration administered by the Milan Grain Exchange Association—a procedure recognized under Italian law.
When the Spanish buyer failed to fulfil its obligations, the arbitral body issued an irritual award in July 2023 ordering payment of more than €2.9 million plus interest and costs.
The Legal Challenge: A Non-Enforceable Award Under the New York Convention
Under Article 808-ter of the Italian Code of Civil Procedure, irritual arbitral awards do not produce res judicata effects and are not enforceable under the 1958 New York Convention. Their value is exclusively contractual, meaning they typically cannot be executed outside Italy.
To overcome this obstacle, Lawants’ International Litigation and Arbitration Department adopted an innovative strategy: instead of seeking exequatur, we filed a contractual performance action before the Spanish courts, asserting that the award—though not enforceable procedurally—still constituted a binding contractual obligation.
A Groundbreaking Judgment in Torrevieja
The Court of First Instance of Torrevieja (Alicante) fully upheld the claim, holding that, although the irritual award lacked formal enforceability and res judicata status, it nevertheless created a binding contractual obligation under Articles 1089 and 1091 of the Spanish Civil Code.
This landmark decision opens a new avenue in Spanish jurisprudence, allowing foreign irritual arbitral awards to be enforced indirectly through contractual actions.
Broader Implications for International Litigation
The ruling demonstrates how creative legal reasoning and deep familiarity with international private law can overcome procedural limitations in cross-border enforcement. It also highlights the relevance of two key EU regulations:
- Brussels I bis: determining jurisdiction based on the debtor’s domicile.
- Rome I: identifying the applicable law to contractual obligations.
These instruments play a crucial role in enabling creditors to obtain effective remedies in cross-border disputes involving non-standard arbitral procedures.
Lawants: Leaders in Cross-Border Litigation and Enforcement
With this decision, Lawants reinforces its role as a benchmark firm in Spain for international litigation and arbitration. Our ability to enforce foreign arbitral awards—including non-institutional ones—positions us as a trusted partner for clients navigating complex global disputes.
If your company needs experienced lawyers for the recognition and enforcement of foreign arbitral awards in Spain, or strategic advice in cross-border litigation, our team can offer tailored solutions designed to protect your rights effectively.
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