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Argentina

Last Verified on Thursday 22nd March 2018

    Legislation

    • Argentina

      The enforcement of international arbitration agreements is primarily governed by article II of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), article 1656 of the Civil and Commercial Code and the pertinent procedural rules set forth in the National Civil and Commercial Procedural Code.

      The enforcement of non-international arbitration agreements is governed by article 1656 of the Civil and Commercial Code and the National Civil and Commercial Procedural Code.

      The recognition and enforcement of foreign arbitral awards is governed by the treaties signed and ratified by Argentina: the New York Convention or the Inter-American Convention on International Commercial Arbitration (Panama Convention).

      The recognition and enforcement of foreign arbitral awards outside the scope of the treaties is governed by sections 517 and 519 bis of the National Civil and Commercial Procedural Code.  

      Last verified on Thursday 22nd March 2018

    • Argentina

      No, the UNCITRAL model arbitration law has not been adopted in Argentina yet. The Executive Power has drafted a bill based on the Model Law would apply exclusively to international commercial arbitrations and sent it to the Congress. It has been approved by the Senate last year and it is currently being analysed by the House of Representatives.

      Last verified on Thursday 22nd March 2018

  • Conventions

    • Argentina

      Yes, Argentina is a party to both the New York Convention and the Panama Convention.

      Argentina is also party to the Montevideo Treaties on procedural matters of 1889 and 1940, the Inter-American Convention of Extraterritorial Validity of Foreign Judgements and Arbitral Awards of 1979 (part of the CIDIP II conventions), Las Leñas Protocol on Jurisdictional Cooperation and Assistance in Civil, Commercial, Labour and Administrative Matters of 1992, the Buenos Aires Protocol on International Jurisdiction in Contractual Matters of 1994 and International Commercial Arbitration Agreement of MERCOSUR of 1998.

      Last verified on Thursday 22nd March 2018

  • Commercial arbitral agreements and arbitrability

    • Argentina

      The National Civil and Commercial Procedural Code requires the parties to execute a compromiso once the dispute has already arisen, irrespective of whether there is an arbitration agreement. This compromiso must fulfil the formal requirements set forth in article 739 of the Procedural Code. These procedural provisions are only applicable in ad hoc arbitrations and some commentators have interpreted that they have been implicitly derogated by the Civil and Commercial Code.

      Last verified on Thursday 22nd March 2018

    • Argentina

      Article 1650 of the Civil and Commercial Code provides that the agreement must be in writing. Since article 1650 does not provide any definition of the “in writing” requirement, the general rules of contracts apply. In this regard, article 286 of the Code provides – with respect to bilateral acts and contracts in general – that the writing requirement may be satisfied by private documents (signed or not). Therefore, as contracts in general, the consent to the arbitration agreement may also be proved by any conduct that shows its acceptance (article 979 of the Civil and Commercial Code).

      However, article 1651 of the Civil and Commercial Code establishes that disputes related to adhesion contracts may not be subject to arbitration. However, this is a formal requirement of the arbitration agreement hidden as a non-arbitrability provision. 

      Additionally, article 1651 establishes that arbitral agreement may be included in a contract, in an independent agreement, in the by-laws of a company or a certain set of rules. It may also arise from a reference made within a contract to another document, as long as the contract is in writing and the reference implies that the arbitral clause shall be part of it. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      There is no distinction between international and domestic arbitration with regarding the matters that cannot be subject to arbitration.

      Pursuant to article 737 of the National Civil and Commercial Procedural Code matters that cannot be subject to compromise or settlement may not be submitted to arbitration.

      Article 1651 of the Civil and Commercial Code adds that disputes related with the civil status of capacity of a person, with family matters, adhesion contracts, consumer disputes (see also reply to question 6) and labour disputes may not be subject to arbitration. The parties may not either agree to arbitrate disputes that compromise the public order (article 1649).

      Last verified on Thursday 22nd March 2018

    • Argentina

      The Civil and Commercial Code establishes that in the absence of express agreement between the parties the arbitration shall be under law (article 1652). This rule prevails over article 766 of the National Civil And Commercial Code that sets forth the opposite default rule. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      The Civil and Commercial Code contains the following provisions concerning the regulation of party autonomy:

      • the parties may exclude the arbitrators power to decide on their own jurisdiction (article 1654);
      • the parties may exclude the arbitrators’ power to issue preliminary measures (article 1655); 
      • the parties may choose an arbitral institution to administer the arbitration (article 1657)
      • the parties may choose the seat, language, procedure, the term in which the arbitrators shall render the award, confidentiality of the proceedings and distribution of costs (article 658);
      • the parties may decide on the number of arbitrators and procedure for their appointment (article 1659);
      • the parties may agree on the nationality, profession or experience of the arbitrators (article 1660);
      • the parties may agree that the challenge of an arbitrator be solved by the remaining arbitrators (article 1663);
      • the parties may not grant a privilege to one of them with regard to the appointment of arbitrators (article 1661); and
      • the parties may waive the recourse of appeal. The parties may not waive the annulment recourse nor the request for clarification (article 760 of the National Civil and Commercial Procedural Code).

      Last verified on Thursday 22nd March 2018

    • Argentina

      Although there are no specifics rules on this issue, the Commercial Court of Appeals allowed a guarantor in a purchase and sale contract to invoke the arbitration clause against the buyer (Cemaedu v Envases EP, 2010). The Court’s decision was based on the wording of the arbitration clause, which did not contain any language excluding the guarantor from the possibility of invoking it. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      Although there are no specific rules on this issue, it is possible – based on article 54 of the Argentine Companies Act – to extend the arbitration clause to a corporation that has used the corporate form to produce fraud or other illegal acts. 

      Additionally, since consent to the arbitration agreement may also be proved by any conduct that shows its acceptance (see question 7) it would be possible to extend it to a non-signatory that has been actively involved in the negotiation, performance and termination of the main contract containing the arbitration agreement (depending on the specific circumstances of the case).

      Last verified on Thursday 22nd March 2018

    • Argentina

      Article 1651 of the Civil and Commercial Code provides that consumer and labour disputes may not be subject to arbitration. 

      However, with respect to consumer disputes, Decree 276/1998 been created a National System of Consumer Arbitration. Consumer arbitration may only be initiated by the consumer once the dispute has arisen. Therefore, arbitration clause inserted in consumer contracts are not valid.         

      Last verified on Thursday 22nd March 2018

    • Argentina

      No, Argentine law does not have any specific provision on class arbitration. Pre-dispute arbitration agreements in consumer contracts are invalid under Argentine law. So it is not possible to force consumers to go into arbitration (irrespective of whether class action is available or not in arbitration).

      Last verified on Thursday 22nd March 2018

    • Argentina

      Yes, article 1657 of the Civil and Commercial Code expressly provides that arbitration may be administered by local or foreign arbitral institutions. They do not need to be licensed under local law. 

      Last verified on Thursday 22nd March 2018

  • Arbitral institutions and arbitrators

    • Argentina

      No, article 1660 of the Civil and Commercial Code provides that any person with legal capacity may be an arbitrator. In practice, it is common to encounter foreign arbitrators in arbitrations seated in Argentina.

      Last verified on Thursday 22nd March 2018

    • Argentina

      No, Argentine law does not have any specific provision concerning arbitrators’ immunities. On the contrary, article 1662 of the Civil and Commercial Code the duties of arbitrators and article 745 of the National Civil and Commercial Procedural Code provides that arbitrators are liable for any breach of their duties that caused damages to the parties.

      Last verified on Thursday 22nd March 2018

    • Argentina

      According to article 5 of the Income Tax Law, any income generated from the performance of any act or activity in the territory of Argentina that could produce benefits is considered to come from an Argentine source regardless of the nationality, address or residence of its agent and that income is subject to taxation. It is debatable whether the fact that an arbitration is seated in Argentina would be considered enough to deem the activity of a foreign arbitrator to take place in Argentina irrespective of whether the activity was in fact performed in the territory.

      Last verified on Thursday 22nd March 2018

    • Argentina

      Yes, arbitrators must be, and remain, independent and impartial. Article 1663 of the Civil and Commercial Code provides that arbitrators may be challenged on the same grounds set forth for judges.

      Article 1662 of the Civil and Commercial Code sets forth the arbitrators’ ongoing duty to disclose any circumstance that may affect their independence or impartiality.

      Last verified on Thursday 22nd March 2018

    • Argentina

      In institutional arbitration, the challenge may be decided according to the institutional rules and the courts would not entertain any request to disqualify an arbitrator before the conclusion of the award. If the institution does not have any rule in this regard, the challenge shall be decided by domestic courts (article 1663 of the Civil and Commercial Code).

      In ad hoc arbitration, if the parties agree that the challenge must be decided by the other arbitrators (article 1663 of the Civil and Commercial Code), the courts should not, in principle, entertain any request to disqualify an arbitrator before the conclusion of the award. Only if nothing has been agreed by the parties shall the challenge be decided by domestic courts according to the procedure set forth in article 747 of the National Civil and Commercial Procedural Code.

      There are some isolated precedents in which domestic courts considered they had the power to review the decision taken by an arbitral institution concerning a challenge (See Entidad Binacional Yacyretá v Eriday, 2004). With the enactment of the new Civil and Commercial Court, this doctrine cannot be applied to arbitrations in which the new Code applies (arbitrations governed by private law). 

      Last verified on Thursday 22nd March 2018

  • Arbitral proceedings

    • Argentina

      According to article 5 of the Income Tax Law, any income generated from the performance of any act or activity in the territory of Argentina that could produce benefits is considered to come from an Argentine source regardless of the nationality, address or residence of its agent and that income is subject to taxation. It is debatable whether the fact that an arbitration is seated in Argentina would be considered enough to deem the activity of a foreign lawyer to take place in Argentina irrespective of whether the activity was in fact performed in the territory. If the activity was effectively performed within the Argentine territory, the lawyer’s income would be subject to taxation.

      Last verified on Thursday 22nd March 2018

    • Argentina

      Under the National Civil and Commercial Procedural Code, parties may be requested to submit specific documents identified by the other parties. In international arbitrations seated in Argentina, parties tend to depart from the limited and narrow rules of production of documents under domestic law. In this regard, it is common practice that parties refer to the IBA Rules on the Taking of Evidence in International Commercial Arbitration which allows the parties to submit a “Request to Produce” specific documents or a narrow category of documents if they are relevant and material to the outcome of the case. Arbitrators usually use a Redfern Schedule to record the parties’ requests for disclosures, arguments on those requests and the arbitral tribunal’s decisions.  

      Last verified on Thursday 22nd March 2018

    • Argentina

      Parties may agree on the confidentiality of the arbitration (article 1658 of the Civil and Commercial Code). This agreement may be express (by inserting a confidentiality clause in the arbitration agreement) or implicit (by selecting certain institutional rules that provide for the confidentiality of arbitration proceedings under those rules). 

      When confidentiality is agreed by the parties, pursuant to article 1662(c) of the Civil and Commercial Code arbitrators have a duty to respect the confidentiality of the arbitration proceedings.

      Last verified on Thursday 22nd March 2018

  • Court support for arbitration

    • Argentina

      Yes. Article 1654 of the Civil and Commercial Code provides that unless otherwise stated, the arbitration agreement provides the arbitrators with the power to decide on their own jurisdiction, which includes the power to rule on the existence or the validity of the arbitral agreement.

      Article 1656 recognises the negative effect of the Kompentenz-Kompetenz principle. It states that courts must refuse jurisdiction if the dispute is brought before them unless the arbitral tribunal has not been yet constituted and the arbitration agreement is manifestly void or inapplicable. 

      Before the enactment of the Civil and Commercial Code, Argentine Courts recognised the positive effect of the Kompentenz-Kompetenz principle, but did not acknowledge its negative effect. This lack of acknowledgement allowed for the filing of parallel proceedings. According to the Argentine Supreme Court, if there were conflicting decisions concerning the jurisdiction of the arbitral tribunal, the conflict had be solved by applying the procedural rules concerning conflict of jurisdictions between courts (Nidera v Rodríguez Álvares de Canale, 1990). In practice, this doctrine entailed that the jurisdictional conflict had to be decided by the Supreme Court itself and the arbitration proceeding would be suspended until a final decision was issued. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      Article 1653 of the Civil and Commercial Code currently provides that the arbitration agreement is independent from the main contract to which it is related. Article 1653 also states the validity of the arbitration agreement is not affected if the main contract is declared null and void. Therefore. arbitrators maintain their jurisdiction to decide on each party’s claims even if the main contract is not valid.

      Even before the enactment of the Civil and Commercial Code, Argentine courts recognised the existence of the separability principle. See, for example, Commercial Court of Appeal, Camuzzi Argentina SA v Sodigas Sur SA (1999) and Federal Civil and Commercial Court, Smit International Argentina v Puerto Mariel (2011). 

      Last verified on Thursday 22nd March 2018

    • Argentina

      According to article 1655 of the Civil and Commercial Code, arbitral tribunals have the power to grant interim relief, unless otherwise stated in the arbitration agreement. The enforcement of interim measures depends on domestic courts, which have the power to refuse the enforcement if the measure is unreasonable or entails a violation of constitutional rights. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      No, arbitrators do not have the power to compel the production of evidence by a third party or to compel a third-party witness to appear before them. Arbitrators do not have the power to enforce any decision and should always request the assistance of a court as provided by article 753 of the National Civil and Commercial Procedural Code.  

      Last verified on Thursday 22nd March 2018

    • Argentina

      Parties are free to apply to a court to request an interim or preliminary  measure irrespective of whether the arbitral tribunal has been constituted or not (article 1655 of the Civil and Commercial Code). The scope of the relief will depend on the facts of the case. With respect to interim measures, an applicant will have to show a likelihood of irreparable harm unless the measure is granted (periculum in mora) and a substantial likelihood of success on the merits (fumus boni juris). In the case of preliminary measures, an applicant needs to show that that the production of the evidence requested would be impossible or very difficult at the evidence stage in the arbitration.

      Arbitrators may also request the assistance of a court to compel the production of evidence by a third party or to compel a third-party witness to appear before them (article 753, National Civil and Commercial Procedural Code). 

      Last verified on Thursday 22nd March 2018

    • Argentina

      Yes. This type of request does not entail a waiver of the right to go to arbitration nor does it affect the power of the arbitrators (article 1655 of the Civil and Commercial Code).

      Last verified on Thursday 22nd March 2018

    • Argentina

      In some exceptional cases, Argentine courts have issued injunctions enjoining arbitral tribunal proceedings from going forward based on the lack of jurisdiction of the arbitral tribunal. For instance, in Entidad Binacional Yacyretá v Eriday (2004), a federal judge suspended arbitral proceedings based on the fact that arbitrators had not included certain statements from claimants in the Terms of Reference and had submitted it to the International Court of Arbitration for approval, as provided in the ICC Rules when one party refuses to sign it. The judge considered it had the power to review the illegality, unreasonableness or unconstitutionality of procedural decisions issued by the arbitrators (at least those related to the Terms of Reference give his manifest relevance) even though they were not final awards.

      Last verified on Thursday 22nd March 2018

    • Argentina

      Under Argentine law, interest runs automatically on unpaid arbitral awards. A Commercial Court would likely apply the rate charged by the Banco de la Nación Argentina for its 30-day discount transactions. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      The answer depends on the law applicable to the merits. Under Argentine law, a court (or an arbitral tribunal) has the power to award interest but it cannot award punitive damages, which are expressly limited to consumer actions (article 52 bis of Law 24.240). 

      Last verified on Thursday 22nd March 2018

  • Awards - content

    • Argentina

      According to articles 760 and 761 of the National Civil and Commercial Procedural Code, an award may be annulled on the following grounds:

      • essential procedural errors: courts may only annul an award based on the existence of formal flaws that affect the due process but may not review the justice or injustice the case
      • award rendered after the term for making the award has elapsed;
      • award decides issues not submitted to the Arbitral Tribunal; and
      • award is inconsistent or contains contradictory decisions.

      Apart from these statutory grounds, the Argentine Supreme Court has held that an award may also be annulled if it is contrary to public policy or it is illegal, unreasonable or unconstituional (Cartellone v Hidroeléctrica Norpatagónica SA, 2004).

      Last verified on Thursday 22nd March 2018

    • Argentina

      It is not a statutory ground to vacate an award. However, as I have already mentioned, the Argentine Supreme Court has held an award may also be annulled if it is “unreasonable” (Cartellone v Hidroeléctrica Norpatagónica, 2004). Its application to commercial cases in which non-state parties are involved has been extremely limited.

      In EDF v Endesa (2009), the Commercial Court of Appeal annulled an award based on what it understood to be a deviation from the applicable rules of Argentine law. The Court held that: 

      (i) decisions in arbitration at law must be well founded. This requirement is mandatory, and it must be respected in every adversarial proceeding, as all other procedural guarantees established in the Constitution (articles 17 and 18, National Constitution); and

      (ii) an award rendered in an arbitration at law is not formally acceptable if it does not fulfil those requirements; in other words, if it is arbitrary or it is not reasonably well founded. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      The most well-known Argentine Supreme Court’s decision concerning public policy refers to a domestic arbitration in which a state-owned company was a party. As it has already been mentioned, the Court held in Cartellone v Hidroeléctrica Norpatagónica (2004) that an award may also be annulled if is contrary to public policy or it is illegal, unreasonable or unconstitutional. The violation of public policy was based on the mechanical application of an interest rate that led to the award of an unreasonable and disproportionate amount, which in turn entailed a violation of the debtor’s constitutional rights.

      In a more recent case, the Commercial Court of Appeal annulled an award issued in a domestic arbitration that had set off reciprocal claims in violation of mandatory bankruptcy law provisions (Sociedad de Inversiones Inmobiliarias SA . Constructora Iberoamericana, 2011).

      Last verified on Thursday 22nd March 2018

    • Argentina

      The annulment request must be filed before the arbitral tribunal within five working days from receiving notice of the award. If the request is formally admissible, the arbitral tribunal should send it together with the whole case record to the Court of Appeals (in the case of arbitration in law) or to the First Instance Court (in the case of arbitration in equity). If the arbitral tribunal considers that the request is formally inadmissible, the applicant may file a direct recourse before the Commercial Court of Appeals within five working days. The Court has the power to overrule the arbitral tribunal’s decision and declare the formal admissibility of the annulment request. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      Argentine commercial courts do not tend to review the merits of the case in annulment actions (either in domestic or international arbitration). The recent interpretation of the ambiguous article 1656 of the Civil and Commercial Court – which provides that parties may not waive the right to challenge awards contrary to the legal order – confirms that commercial courts do not read this provision as an autonomous ground of challenge that would allow a more stringent review of the merits of the case (Olam Argentina v Cubero, 2015; Amarilla Automotores v BMW Argentina, 2016; Diaz v Techint, 2016).

      Last verified on Thursday 22nd March 2018

    • Argentina

      In principle, Argentine courts would not consider themselves empowered to vacate an arbitral award rendered in another jurisdiction. In a recent case, a Federal Administrative Court of Appeals annulled an award issued by a tribunal seated in Montevideo (Uruguay), but the parties had agreed in the arbitration agreement that “the award would be final and binding for the parties, without any possibility of appeals, except for the motions for clarifications or annulment provided for in article 760 of the Code of Civil and Commercial Procedural Code of Argentina (YPF v AES Uruguaiana, 2016).

      Last verified on Thursday 22nd March 2018

  • Awards enforcement

    • Argentina

      No, article 760 of the National Civil and Commercial Procedural Code provides that the waiver of court review does not include the requests for clarification nor the nullity recourse. 

      Last verified on Thursday 22nd March 2018

    • Argentina

      If the NY Convention is applicable, the party seeking enforcement shall supply:

      • The duly authenticated original award or a duly certified copy thereof;
      • The original agreement referred to in article II or a duly certified copy thereof.

      If the award or the agreement are not in Spanish, a certified Spanish translation must also be submitted (article IV of the NY Convention).

      The enforcement request should be filed before the first instance court that would have had jurisdiction to hear the case under Argentine domestic procedural rules. The final decision could be appealed to the Court of Appeals. Since enforcement of foreign award is governed by international convention, the final decision from the Court of Appeal could be subject to an extraordinary appeal to the Supreme Court.

      Last verified on Thursday 22nd March 2018

    • Argentina

      There are no statistics concerning this issue. According to our experience, it would depend to a great extent on the jurisdiction in which the award is being enforced and on the defences opposed by the parties. In federal courts, it could take between six months and a year.

      Last verified on Thursday 22nd March 2018

    • Argentina

      The Argentine Supreme Court has recently stated that domestic courts do not have the power to review the merits at the enforcement stage and emphasised that the court’s analysis should be limited to verifying the existence of the non-recognition grounds set forth in the New York Convention  (Armada Holland v Inter Fruit, 2011).

      On the other hand, the Supreme Court of the Province of Buenos Aires refused to enforce an international award issued against a state-owned company on the ground that the state-owned company lacked the power to agree to arbitrate (Milantic v Astillero Santiago, 2016. See question 58). 

      Last verified on Thursday 22nd March 2018

    • Argentina

      “Public policy” has rarely been invoked by Argentine courts as a ground for refusing enforcement of an international award. In Ogden Entertainment Services v Ejio (2004) the Commercial Court of Appeals refused to enforce an international award on the ground that the cost of the arbitration and legal fees the claimant had to pay clearly exceeded the principal amount awarded to him (claims based on unpaid commission were accepted only partially and the tribunal granted an award on cost in favour of defendant). According to the Court, the award violated the right of access to justice. The Court did not distinguish between international and domestic public policy. On the contrary, the Court defined the notion of “public policy” in light of the domestic notion of “arbitrariness”, which is one of the grounds for the extraordinary appeal to the Supreme Court.

      Last verified on Thursday 22nd March 2018

  • The outlook

    • Argentina

      Yes, the Supreme Court of the Buenos Aires Province refused to recognise a US$3 million award rendered in London in favour of Milantic Trans SA. The dispute arose out of a US$16 million construction contract of two bulk carriers signed in 1996 between Milantic, the buyer, and an Argentinian administrative entity (the ARS), the constructor. It was governed by the UK’s 1996 Arbitration Act. Owing to allegedly irresistible events, ARS suffered delays in the bulk carriers or construction and delivered it after the delivery date agreed upon in the contract. This led to its termination.

      The arbitral tribunal considered that Milantic lawfully terminated the contract. Milantic sought the award's recognition and enforcement in the Province of Buenos Aires. Nonetheless, the Supreme Court considered that the contract’s validity was subject to certain preconditions that had not been complied with. Notably, the required law for the ARS to have legal capacity to enter into the contract and the arbitration agreement had never been passed. Further, the State Prosecutor in charge of representing the Province of Buenos Aires’ interests should have been duly informed and represented the ARS’s interests. The recognition of the award was thus found to be contrary to Argentina's public policy and rejected as per article V.2.b) of the New York Convention – Milantic Trans SA (Milantic v Astillero Santiago, 2016).

      Last verified on Thursday 22nd March 2018

    • Argentina

      Argentine commercial courts, in general, do not interfere with arbitration proceedings between private parties and have consistently refused to review the merits of awards.

      In addition to this, the new chapter on arbitration contained in the Civil and Commercial Code –despite some deficiencies – entailed a significant improvement in the arbitration legislation in Argentina.

      However, the existence of multiple sources of law (Civil and Commercial Code and Civil and Commercial Procedural Codes in each jurisdiction) conspires against the existence of a modern arbitration law. In this sense, the Ministry of Justice is currently working on an international arbitration bill based on the UNCITRAL Model Law that would provide a uniform regulation of international arbitration (for disputes primarily based on private law) limiting thus the scope of the Civil and Commercial Code and all provincial procedural codes to domestic arbitration.

      Finally, Argentine still lacks a regulatory framework for the arbitration of disputes not primarily governed by private law, since the current Civil and Commercial Code does not apply to that type of dispute. It would be desirable to have a predictable legal framework for arbitration with state-owned companies or with the Argentine state.

      Last verified on Thursday 22nd March 2018

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