Arbitration in Argentina is based on Article 1197 of the Civil Code, which provides that the terms of an agreement are binding in the same way as laws, and consequently contracting parties should be free to determine how they wish to resolve their disputes.

The rules governing arbitration are set out in Chapter VI of the National Civil and Commercial Procedure Code (“Código Procesal Civil y Comercial de la Nación”) (“the CPCN”), which applies to disputes heard both in Buenos Aires and in the rest of Argentina. Most of the individual provinces of Argentina have included similar provisions in their provincial procedure Codes. Chapter VI of the CPCN applies to all forms of arbitration: ad hoc and institutional; at law; and ex aequo et bono.

Arbitration in Argentina can be conducted on an ad hoc basis or under the auspices of an arbitral institution. The principal arbitral institutions in Argentina are the “Centro de Mediación y Arbitraje Comercial de la Cámara Argentina de Comercio” and the “Tribunal Arbitral de la Bolsa de Comercio de Buenos Aires”.

The number of domestic and international arbitration cases in Argentina has increased significantly in recent years.

The provisions of Chapter VI of the CPCN apply to all kinds of arbitration including institutional and ad hoc arbitration, arbitration at law and ex aequo et bono, provided that the seat of the arbitration is in Argentina.

Subject matter
Parties may choose arbitration as a dispute resolution mechanism for all civil matters that can be resolved by way of a compromise or settlement.

Consequently, family law disputes (with the exception of certain patrimonial matters), criminal law matters (excluding the civil indemnification), and testamentary matters cannot be resolved by way of arbitration in Argentina.

Formal requirements
According to Article 974 of the Civil Code, no specific wording is required for an arbitration agreement. That said, parties would be well-advised to seek professional advice regarding the drafting of their arbitration agreements to ensure that they are valid and enforceable.

An arbitration agreement must, however, be in writing. It can be concluded as a clause in a larger agreement or as a stand-alone agreement. An arbitration agreement will be deemed to be in writing if it is concluded between the parties by way of an exchange of letters, facsimiles, telexes, or by such other means of telecommunication which produce a permanent record of the agreement. It should be noted, however, that prior to the commencement of any arbitral proceedings – even in the presence of an arbitration clause – the parties are required to execute an arbitration commitment (the “Compromiso Arbitral”) confirming their commitment to submit their dispute to arbitration. The arbitration agreement will be ineffective in the absence of a signed Compromiso Arbitral.

Article 740 of the CPCN provides that the Compromiso Arbitral should contain all the necessary requirements for commencing arbitral proceedings, i.e. provision as to the appointment of arbitrators, the selection of any institutional rules (if any), and a statement of the issues to be submitted to the arbitral tribunal.

The execution of the Compromiso Arbitral will extinguish the jurisdiction of the courts to resolve the dispute. In the event that one of the parties brings a claim – which falls within the scope of the Compromiso Arbitral – before the local courts, the other party will be able to invoke the existence of the Compromiso Arbitral and the court must stay its proceedings.

Effects
If the parties have concluded a valid and enforceable arbitration agreement, they are required to arbitrate all disputes that fall within the scope of that agreement and cannot submit such disputes to the Argentine courts.

If one of the parties to a valid arbitration agreement refuses to execute the Compromiso Arbitral, the other party can request the State Courts do so on behalf of the defaulting party.

The constitution of the arbitral tribunal
Pursuant to Articles 740 and 743 of the CPCN, the parties are free to decide upon how many arbitrators will constitute the arbitral tribunal. The parties can appoint an odd or even number of arbitrators, although the former is more common. If the parties do not agree upon the number of arbitrators to be appointed, the court shall decide.

Anyone can be appointed as an arbitrator so long as they are capable of exercising their civil rights.

The parties are free to agree upon the procedure for appointing arbitrators, either by reference to the rules of an arbitral institution or otherwise. In most cases, each party will appoint one arbitrator, and the parties will then jointly agree upon the identity of a third (presiding) arbitrator. If a party fails to appoint an arbitrator or if the parties are unable to agree upon the identity of a sole or presiding arbitrator, the court shall decide.

The challenge of arbitrators
According to Article 746 of the CPCN, arbitrators may be challenged by the parties on the same grounds as judges. Those grounds include where the arbitrator: has a personal or business relationship with one of the parties or their lawyer; has an interest in the outcome of the dispute; has expressed a prior opinion or recommendation on issues regarding the dispute; or has received an ‘important benefit’ from one of the parties.

Party-appointed arbitrators can only be challenged for reasons that occurred after their appointment.

Pursuant to Article 747 of the CPCN, the arbitrators are competent to rule upon any challenge within five days of their appointment. If the challenged arbitrators refuse to hear the challenge, a judge is entitled to determine the issue and his decision cannot be appealed. The proceedings will be suspended pending the resolution of the challenge.

Responsibility of the arbitrators
Once the Compromiso Arbitral has been executed, notice of that fact will be given to the potential arbitrators who – once they have accepted their appointments – must fulfil their duties and obligations.

According to Article 745 of the CPCN, arbitrators may be liable in the event of damage or loss suffered by the parties as a result of their failure to perform their duties and obligations. Pursuant to the Civil Code, the arbitrators also have a general obligation to compensate third parties for damage caused by their negligence or wilful misconduct.

In addition, pursuant to Article 756 of the CPCN, in the event that the arbitrators do not issue their award within the time limit stipulated in the Compromiso Arbitral, they will forfeit their right to be paid and may be liable for any damage or loss caused by their delay.

Pursuant to Article 269 of the Argentine Criminal Code, arbitrators who issue awards that are contrary to established legal principles, or that are based on a false factual analysis, may be subject to fines ranging from ARS 3,000 to ARS 75,000 (approx. USD 850–USD 21,500) and/or be disqualified.

Arbitration fees
As regards institutional arbitration, each institution has rules governing the payment of administrative fees and the remuneration of arbitrators. As for ad hoc arbitration, there will be no administrative fees and the remuneration of the arbitrators will be agreed between the parties and the arbitrators (usually in the Compromiso Arbitral).

Competence to rule on jurisdiction
There is no express provision in the CPCN governing the arbitral tribunal’s competence to rule on its own jurisdiction. There is support in the jurisprudence, however, for the view that the arbitral tribunal is so competent (i.e. confirming the application of the principle of “Kompetenz-Kompetenz”).

Power to order interim measures
Unless the parties have agreed otherwise, arbitrators are empowered by Article 753 of the CPCN to grant interim measures to protect the parties’ rights and the integrity of the arbitral proceedings.

However, as a result of the arbitrators’ lack of imperium, only courts can enforce any interim measures granted by the arbitral tribunal.

Commencement of arbitration
Arbitral proceedings commence with the filing of the claim with the arbitral tribunal, once constituted.

It is important to note, however, that it is the execution of the Compromiso Arbitral that stops time running for the purposes of limitation.

General procedural principles
Article 741 of the CPCN provides that the parties are free to choose the procedure to be followed by the arbitrators. If the parties do not agree upon the procedure to be applied – and unless the parties have agreed otherwise – Article 751 of the CPCN provides that the arbitral tribunal should apply the same procedural rules as are used in judicial proceedings.

Place and language of arbitration
The parties are also free to choose the seat of the arbitration. In the absence of any election, the seat will be deemed to be the place at which the Compromiso Arbitral was executed.

There is no express provision in the CPCN governing the language of the arbitration. It is generally accepted, however, that the parties are free to choose the language to be used in their arbitral proceedings.

Oral hearings and written proceedings
Article 741 Section 1 of the CPCN provides that the parties are free to decide whether to hold an oral hearing or whether to conduct the arbitration on a ‘documents only’ basis.

The arbitral tribunal must hear the parties and give them the opportunity to make oral submissions if so requested. The tribunal shall also hear all witnesses and experts (if they are summonsed by the tribunal upon the request of the parties to explain their written testimony).

The parties shall be given sufficient prior notice of any hearings or of any procedural actions to be taken by the arbitral tribunal.

Court assistance in taking evidence
The arbitrators may request the assistance of the courts in obtaining evidence. For instance, they may request the courts to summon witnesses that have refused voluntarily to attend and give evidence. However, the power to determine the admissibility of evidence and its weight lies within the exclusive remit of the arbitral tribunal

Choice of law
In international arbitration, the parties are free to determine the applicable substantive law according to which the arbitral tribunal must make its award. If the parties fail to determine the applicable law, it shall be determined by the arbitral tribunal (Article 49 (2) of the CPCN).

The parties may authorise the arbitral tribunal to make its decision ex aequo et bono (instead of pursuant to an applicable law).

Time, form, content and notification of the award
Article 741 of the CPCN provides that the parties can stipulate in the Compromiso Arbitral the time within which the arbitral award is to be issued. In the absence of any agreement on this issue, the court shall decide.

Any arbitral award based on law (rather than ex aequo et bono) must be properly reasoned both in fact and in law. It must deal with all the issues submitted to arbitration as well as ancillary matters such as the costs of the proceedings.

The award itself must be in writing and state the place and date of its issuance. Pursuant to Article 757 of the CPCN, the arbitral award must also be signed by a majority of the arbitrators. If no majority decision can be reached on some or all issues (for example, if an even number of arbitrators has been appointed), a new arbitrator will be appointed to resolve such issues. If the majority of the arbitrators agree upon certain specific issues, a decision will be rendered on those issues, leaving the new arbitrator to determine the outstanding issues. The new arbitrator shall be appointed by the parties, the arbitrators or the courts, and will decide upon the basis of the evidence already presented in the proceedings.

Settlement
The proceedings will terminate if the parties settle their dispute. The arbitral tribunal shall record the settlement in the form of an award on agreed terms if so requested by the parties, provided that the arbitral tribunal considers that the settlement is in accordance with the law. An award on agreed terms has the same effect as any other award made by an arbitral tribunal.

The arbitrators may schedule one or more settlement hearings at the outset and/or during the proceedings to encourage the parties to settle their dispute amicably. In keeping with the powers of judges in judicial proceedings in Argentina, the arbitrators may be actively involved (as quasi-conciliators) in any settlement discussions that result from the settlement hearings.

Costs
The parties can decide in the Compromiso Arbitral how the costs of the arbitration (including the arbitrators’ fees and the parties’ legal fees) will be borne.

In the absence of any prior agreement between the parties on this issue, the arbitrators will determine the costs of the arbitration in their award and allocate the responsibility for paying such costs between the parties. As a general rule, the winning party is entitled to recover its costs from the losing party.

Termination of the proceedings
The arbitration proceedings terminate when the final arbitral award is issued.

According to Article 748 of the CPCN, the arbitral proceedings will also be terminated in the following circumstances:

• by agreement between the parties;
• upon the expiration of the term indicated in the Compromiso Arbitral or where otherwise stated by the court; or
• if neither the parties nor the arbitrators take any steps in the proceedings for a period of three months.

Correction, clarification and the issue of a supplemental award
Article 166 of the CPCN provides that any party may file a motion requesting the arbitral tribunal to clarify the terms of the award. This motion should be filed within three days of receipt of the award, and should invite the arbitral tribunal to correct any material error or omission, and/or clarify the grounds on which the award has been determined.

Either party may request an additional award if the arbitral tribunal failed to make an award on any claim submitted to the arbitral tribunal for consideration.

The jurisdiction of the courts
If a valid and binding arbitration agreement has been made by the parties, the ordinary courts are required to decline jurisdiction over the subject matter specified in the arbitration agreement. However, the CPCN gives the courts limited jurisdiction to provide legal assistance to the arbitral process in certain circumstances. As discussed above, the Courts can, inter alia, assist in relation to the appointment and challenge of arbitrators; in enforcing interim measures granted by the tribunal; and in obtaining evidence.

Stay of court proceedings
The court will decline jurisdiction over a claim that falls within the scope of an arbitration agreement, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.

Preliminary rulings on jurisdiction
Pursuant to Article 752 of the CPCN, if the arbitrators are unable to decide whether or not they have jurisdiction over the dispute, a party may request that the competent court decide on the jurisdiction of the arbitral tribunal. The proceedings shall be suspended until a party files a copy of the court’s decision with the arbitral tribunal.

The court also has jurisdiction to review the arbitral tribunal’s assumption of jurisdiction upon application by a party.

Interim protective measures
The courts in Argentina have jurisdiction to grant interim measures in support of arbitral proceedings both before and after the constitution of the arbitral tribunal.

The courts are also exclusively competent to enforce interim measures granted by the arbitral tribunal.

Obtaining evidence and other court assistance
The local courts have jurisdiction pursuant to Section 753 of the CPCN to assist the arbitral tribunal with obtaining evidence.

Appeals
Unless the parties agree otherwise, arbitral awards can be appealed by the parties unless (a) the parties have waived such a right; or (b) the arbitration was conducted on an ex aequo et bono basis.

If the right of appeal has not been waived, the award may be appealed on the same grounds as court judgments.

Applications to set aside an award
The parties are not, however, entitled to waive the right to apply to set aside an award.

Articles 760 and 761 of the CPCN set out the grounds upon which an award can be set aside:

• a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
• the award was granted after the deadline fixed in the Compromiso Arbitral;
• the award contains decisions on matters beyond the scope of the Compromiso Arbitral. Those decisions that exceeded the tribunal’s jurisdiction will be null;
• the party which concluded the arbitration agreement did not have legal capacity;
• the arbitration agreement is not valid under the law which the parties have chosen, or failing any indication thereof, under Argentinean law;
• the subject matter of the dispute is not capable of settlement by arbitration under Argentinean law; or
• the award is in conflict with the rules of Argentine public policy.

The application to set aside the award must be submitted within five days of receipt of the award by the parties.

In the case of arbitration at law, any application to set aside an award should be filed before the arbitral tribunal. If the tribunal decides to grant the application, it will remit the file to the Ordinary Appeal Court, which will rule on the set aside without the participation of the other party. If the arbitral tribunal rejects the application, the party challenging the award may file an application to set aside the award before the Ordinary Appeal Court.

In cases decided ex aequo et bono, the application to set aside should be filed before the competent First Instance Court. The only valid grounds for such a challenge are: (i) the award was rendered after the deadline fixed in the Compromiso Arbitral; or (ii) the award contains decisions on matters beyond the scope of the Compromiso Arbitral.

No appeal may be lodged against the decision of the court on an application to set aside, but a party may apply to the Supreme Court of the Republic of Argentina for so-called judicial revision of the decision if the court committed a substantial breach of law.

It is important to note that the filing of an application to set aside the award will not have the effect of suspending enforcement of the award. Enforcement may, however, be suspended if an appeal is filed in the context of an arbitration at law.

Domestic awards
Pursuant to Article 499 of the CPCN, the effect of an arbitration award is the same as that of a final and binding (non-appealable) court judgment. The court which has jurisdiction to enforce a domestic award is the local court agreed by the parties in the Compromiso Arbitral. In the absence of agreement between the parties on this issue, the competent court will be the one that would have been competent to hear the dispute if no arbitration agreement had been concluded.

Foreign awards
Foreign awards are enforceable in Argentina in accordance with the provisions of multilateral conventions or bilateral treaties ratified by Argentina. The most important arbitration convention to which Argentina is a party is the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which the government ratified on 28 September 1988, and which entered into force in Argentina on 14 March 1989.

The recognition of foreign arbitral awards is also provided for in Article 519 (bis) of the CPCN.

Procedurally, the party seeking enforcement of a foreign arbitral award will need to obtain an order of exequatur from the local courts in order to enforce the award. Pursuant to Article 517 of the CPCN, the court will only refuse to grant if

• the subject matter of the dispute is not arbitrable under Argentinean law; or
• the award is contrary to Argentine public policy.

There is no express provision governing which court is competent to hear applications for the recognition and enforcement of arbitral awards. However, in principle, such application should be lodged with the court that would have been competent to hear the dispute in the absence of an arbitration agreement. Conclusion

Arbitration in Argentina is still in the process of development. Nevertheless, the present legal framework – including the CPCN, the arbitration rules of the principal Argentine arbitral institutions, and the international conventions to which Argentina is party – provide a solid foundation for the future and serve to ensure that both domestic and foreign arbitral awards are enforceable in Argentina.

CMS Bureau Francis Lefebvre
Marcelo T. de Alvear 612 Piso 1
C1058AAH Capital Federal
Buenos Aires, Argentina


Marcelo Cippitelli
T +54 11 43 11 10 08
F +54 11 43 11 80 88
E mcippitelli@cms-bfl.com.ar


Patrick Patelin
T +54 11 43 11 10 08
F +54 11 43 11 80 88
E ppatelin@cms-bfl.com.ar