Introduction

For decades, arbitration in Argentina was legislated province by province (and the city of Buenos Aires), creating a patchwork of legislation not always in line with international standards. In 2015, following the unification and the enactment of the Civil and Commercial Code applicable to the whole country, a chapter ‘Arbitration Contract’ was included and addressed the general aspects of the arbitration proceedings,1 but was not intended to be a comprehensive and self-contained regulation. Such attempt to regulate arbitration at a national level was, however, a first step towards a uniform arbitral legislation across the country.

The new Law on International Commercial Arbitration (the ‘new Law’),2 inspired by the UNCITRAL Model Law (the ‘Model Law’), entered into force following its publication on 26 July 2018. Its main features are described below.

Scope

The new Law applies exclusively to international commercial arbitration – without prejudice to the application of international treaties.3

As in the Model Law, an arbitration will be considered ‘international’ if (a) the parties to the arbitration agreement have their domicile in different states (Article 3.a of the new Law) or if (b) the domicile of one of the parties, on the one hand, and either (i) the place of arbitration or (ii) the place most closely related to the transaction or the dispute, on the other hand, are located in different states (Article 3.b of the new Law). However, unlike the Model Law,4 the new Law does not foresee the parties’ agreement as being capable of characterizing an arbitration as ‘international’ by their own will, without an objective element of internationality.

An arbitration will be considered ‘commercial’ to the extent it covers matters arising from any legal relationships, whether contractual or not, of a private nature or governed mainly by private law. Such definitions will be broadly interpreted and, in case of doubt, in favour of a ‘commercial’ characterization.5

Interpretation

In addition to the rules of interpretation and integration contained in Article 2A of the Model Law,6 the new Law indicates that the ‘special character’ of the new Law shall also guide its interpretation, arguably in the sense that its provisions will prevail over any other rules of a more general nature (which seems somewhat redundant for a law which applies exclusively to international commercial arbitration).

Judicial support

Following Article 4 of the Model Law, the intervention of the state courts is limited to the strict minimum, and is limited to matters expressly allowed by the new Law.7

The new Law establishes that state courts of first instance (with one judge) at the place of arbitration shall be competent for the appointment of arbitrators, and the state courts of appeal (with three judges) shall have competence to decide on challenges and replacement of arbitrators, to examine the jurisdictional decisions from arbitral tribunals and for set-aside proceedings.

Compétence - Compétence

Pursuant to Article 19 of the new Law, state courts shall refer the parties that initiate litigation proceedings to arbitration, unless the arbitration agreement is found to be null and void, inoperative or incapable of being performed (negative effect of compétence-compétence). Arbitral tribunals shall decide on their own jurisdiction (positive effect of compétence-compétence), as provided in Article 35 of the new Law.8

Article 37 of the new Law also provides that a decision that the arbitral tribunal has jurisdiction may be reviewed by state courts upon the request by a party filed within thirty days from the receipt of such decision. Importantly, the new Law expressly provides that, pending a decision from the state courts, the arbitral tribunal can continue with the conduct of the proceedings and even render an award.

Arbitration agreement

Following Option I of Article 7 of the Model Law, the new Law provides that the arbitration agreement shall be in writing and recorded in any form,9 even by electronic means, and that an arbitration agreement incorporated by reference is expressly valid. The new Law also establishes that an arbitration agreement will be deemed to exist if the party initiating an arbitration affirms that such agreement exists and the responding party does not deny its existence in the answer to the request for arbitration.

Waiver

On the waiver of the right to object, the new Law establishes a specific twenty-day time limit to object to any failure to comply with the provisions of the new Law or the arbitration agreement. This provision, which is more specific than the Model Law that only requires such objection to be raised without undue delay (unless a specific time limit exists),10 is valuable as it will minimize any disputes with respect to the timing of any objection filed by the parties to the conduct of the proceedings.

Arbitral tribunal

The new Law establishes that, unless agreed otherwise by the parties, the nationality of an arbitrator shall not be an obstacle to act as arbitrator,11 and that a clause which grants one of the parties an unfair advantage in the constitution of the arbitral tribunal shall be null and void.12

Unlike the Model Law, the new Law contains an addition pursuant to which a challenge against an arbitrator for lack of impartiality and independence shall be accepted, under an irrefutable presumption and without admitting evidence to the contrary, when such arbitrator or other members of his or her law firm (or similar organization) are counsel for (i) one of the parties to the arbitration or (ii) a third party in other judicial or arbitral proceedings in a dispute that has the same cause or subject-matter.13 Although this addition appears to be counterproductive from a legislative point of view, as it only refers to specific situations in between others, the circumstances described therein, if treated as an ongoing representation at the time the arbitration is pending, would warrant in any case the disqualification of the arbitrator.

Provisional measures

Following Article 17 of the Model Law, Articles 38 to 61 of the new Law provide that arbitral tribunal may grant preliminary or interim measures upon request of the parties. Article 21 also provides that the parties may request interim relief from state courts, before or during the course of the arbitration proceedings, and that such action is not incompatible with the arbitration agreement.

Applicable law and conduct of the proceedings

The arbitral tribunal shall treat the parties with equality and give them a full opportunity to present their case.14 If the parties have not agreed otherwise, the place of arbitration and language of the proceedings shall be determined by the arbitral tribunal.15

The new Law also provides that the parties shall have access to all evidence or expert reports that the arbitral tribunal may use in rendering its decision.16 Thus, it appears advisable that the parties are granted the opportunity to comment on doctrine and jurisprudence that the arbitral tribunal considers relevant in issuing its decision, in case such doctrine and/or jurisprudence has not be presented by the parties.

The arbitral tribunal shall decide the dispute in accordance with the law chosen by the parties. Failing such agreement, and in derogation from the Model Law,17 the new Law provides that the arbitral tribunal shall apply the rules of law it considers appropriate.18 Accordingly, the arbitral tribunal is neither required to resort to the conflict of law rules to determine the applicable law, nor required to apply a national law.19 The arbitral tribunal will only decide ex aequo et bono if expressly authorized by the parties,20 and in all cases, it shall take into account the provisions of the contract and the trade usages.21

Awards

The new Law provides that the award need only be signed by the majority of the arbitrators, provided that the reasons for any missing signature are stated in the award, following Article 31(1) of the Model Law.

Also in line with Article 33(3) of the Model Law, the arbitral tribunal may, upon the request of any of the parties, issue an additional award on an omitted issue (infra petita).

Importantly, the new Law follows the Model Law and provides for limited grounds for setting-aside an arbitral award, which is the sole remedy against an award.22 The new Law provides for a time limit of thirty days to file such a request, which runs either from (i) the notification of the award, or (ii) a decision on a request for correction or interpretation, or additional award. This is shorter than the three-month time limit provided under the Model Law.

As for public policy, while the new Law provides that an award rendered in Argentina may be set-aside when the state court finds that the award is in conflict with Argentinean [domestic] public policy, and that foreign arbitral awards shall not be enforced when the state court finds that the recognition and enforcement would be contrary to Argentinean international public policy.23

Conclusion

As a prominent author put it, a ‘number of factors are important in making a country attractive as a seat for international arbitration, the first one that should be taken into account is whether the country has a modern and liberal arbitration law’ and ‘one of the easiest and most efficient way … to enhance … acceptability as a place for international arbitrations is to adopt – and, most importantly, to be recognized by UNCITRAL as having adopted – the Model Law’.24

By enacting the UNCITRAL Model Law without major changes, Argentina makes a significant step in the right direction for the development of international commercial arbitration in the country.


1
‘Contrato de Arbitraje’, Articles 1649 to 1665 of the Civil and Commercial Code (Book 3, Title IV, Chapter 29). On such legislation: J.P. Argentato, ‘Arbitration in Argentina’, TDM 5 (2016). On the ‘arbitration contract’, see also Pierre Mayer, ‘Le mythe du contrat d’arbitre’ in Le droit à l'épreuve des siècles et des frontières - Mélanges en l'honneur du Professeur Bertrand Ancel, LGDJ (2018), p. 1181.

2
Law No. 27.449 of 26 July 2018 available at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/310000-314999/312719/norma.htm.

3
Article 1 of the new Law.

4
Article 1(3)(c) of the Model Law.

5
Article 6 of the new Law.

6
Article 2 A of the Model Law as adopted in 2006, ‘International origin and general principles’: ‘(1) In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith. (2) Questions concerning matters governed by this Law which are not expressly settled in it are to be settled in conformity with the general principles on which this Law is based’.

7
Article 12 of the new Law.

8
Article 35 of the new Law further contemplates the principle of separability of the arbitration agreement.

9
However, the new Law does not include the final section of Article 7(3) of the Model Law, which provides that ‘An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means’. This appears not to be of great importance, as the new Law establishes that the written arbitration agreement may be recoded ‘in any form’. See also Article 106 of the new Law (UNCITRAL’s recommendation regarding the interpretation of article II, paragraph 2 of the New York Convention).

10
Article 4 of the Model Law. See also Article 40 (‘Waiver’) of the ICC Rules, which, however, does not provide any specific time limit.

11
hen appointing a sole arbitrator or president, the new Law provides that the state courts shall take into account the convenience of appointing a candidate from a different nationality than those of the parties.

12
This provision is not included in the Model Law. Even if the drafting could be clearer, it seems that the parties’ arbitration agreement would still be valid, and that only the provision(s) on the constitution of the arbitral tribunal would be null and void.

13
Article 28, 2nd part, of the new Law. An award rendered by an arbitral tribunal in such conditions will be null and void upon the acceptance of the challenge.

14
Article 62 of the new Law.

15
Articles 65 and 68, respectively, of the new Law.

16
Article 74 of the new Law.

17
Article 28(2) of the Model Law makes reference to the law determined by the conflicts of law rules, which the arbitral tribunal determines applicable.

18
Article 80 of the new Law. In the same vein, see Article 21(1) of the ICC Rules and Article 1511 of the French Code of Civil Procedure.

19
The terms ‘rules of law’ being broad enough as to encompass other soft law instruments, such as, for instance, the UNIDROIT Principles of International Commercial Contracts.

20
Article 81 of the new Law.

21
Article 82 of the new Law. In the same vein, see Article 28(4) of the Model Law and Article 21(2) of the ICC Rules.

22
This is important, as the curernt Article 1656 of the Civ il and Commercial Code (which is not applicable international commercial arbitration as from the entry into force of the New law), provides that a party may not waive the right to set aside an award which is contrary to Argentinean law. See J.P. Argentato, ‘Arbitration in Argentina’, TDM 5 (2016), at Section II.B.4.

23
This distinction between domestic and international public policy would appear to suggest that a higher threshold would apply for refusing the enforcement of a foreign arbitral award.

24
Christopher R. Seppälä, ‘Why Finland Should Adopt the UNCITRAL Model Law on International Commercial Arbitration’, Journal of International Arbitration (Kluwer Law International 2017), Vol. 34, Issue 4, p. 599.