Publications

The choice of the place of arbitration has important legal consequences. It has a bearing on (i) the legislation governing the arbitration proceeding; (ii) whether the award can be set aside; and, if it can, the related rules; and (iii) the validity of an arbitration agreement. The place of arbitration also determines where the award must be regarded as “made”, meaning the “nationality” of the award, for the purposes of its recognition in accordance with the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”).

 The following criteria are generally –or should be- taken into consideration when choosing the place of arbitration:

1. Whether the state of the place of arbitration has ratified the New York Convention, which is absolutely necessary for recognition and enforcement of the award beyond the borders of that state. There are currently 149 state parties to the New York Convention.
2. Whether the legislation governing the arbitral proceeding and the courts of the state of the place of arbitration are arbitration friendly, which will depend on factors such as the enforcement of injunctive relief and other judicial assistance measures, the enforcement of the award, and the option to apply for judicial review of the award. The factors needing to be considered in this respect include:
   
   1. Whether the law on arbitration is clear and modern and observes the choice of the place of arbitration by the parties as a method for resolving their disputes.
   2. Whether it includes mechanisms for quick recognition and enforcement of judgments and awards rendered in the place of arbitration.
   3. Whether it restricts court intervention in the lawsuits that the parties have agreed to settle by means of arbitration to cases in which the parties request that intervention.
   4. And whether it recognizes the immunity of arbitrators in relation to civil liability.
3. It is also necessary for the judiciary in the state in which the place of arbitration is going to be established to be independent, efficient and have experience of complex commercial and contractual cases.
4. Lastly, other factors will have to be considered which while not having to be treated as decisive will influence the choice of the place of arbitration. Some examples are (i) the language in which the arbitral proceeding is going to be conducted if the parties have not specified a particular language in the arbitration agreement; and (ii) the convenience and costs associated with the choice of one place or another −transport, communications, hotel and services infrastructure, etc. −.

From the standpoint of these and other criteria, arbitration institution Delos Dispute Resolution has drawn up a guide of arbitration places[1] which includes a list of the arbitrations places considered “safe”. Delos is an institution based in Paris, established in 2014 to provide cost and time-efficient arbitration solutions. It provides an innovative and systematic solution starting from the contract-making stage through to the issuing of the final award in case of arbitration.

The guide covers 54 national jurisdictions and identifies 32 safe arbitration seats, in addition to three emerging safe seats: Bucharest, in Rumania; Road Town, in the British Virgin Islands; and La Valetta, in Malta.

The guide, known by its acronym GAP (Guide to Arbitration Places) is designed to assist lawyers and arbitration practitioners with accessing key insights into a large range of jurisdictions, for the purposes of negotiating the choice of arbitral seats and conducting arbitral proceedings in those jurisdictions. The analysis of each jurisdiction has been drawn up by recognized arbitration practitioners in that jurisdiction, and provides practical information and advice for anyone not familiar with the seat concerned. For Spain that analysis was prepared by Carlos de los Santos, Margarita Soto and Elisa Vicente, from the GARRIGUES Litigation and Arbitration department.

Quoting Hafez R Virjee, President of Delos, the guide defines “safe seat” as a place of arbitration where the legal framework and practice of the courts support recourse to arbitration as a fair, just and cost-effective dispute resolution mechanism.

On the basis of some of the criteria mentioned, the 54 jurisdictions are classified using a system based on colours in which safe seats are assigned a “green traffic light” in relation to all the criteria considered.

It also provides an assessment of each jurisdiction on the basis of a number of criteria following the outlined system based on colours. You can see the said table here.

The 32 safe seats identified by the GAP are the ones that received green traffic lights for all the measured criteria, and are: Amsterdam, Auckland, Berlin, Calgary, Copenhagen, Stockholm, Frankfurt, Geneva, The Hague, Hamburg, Helsinki, Hong Kong, Lisbon, London, Madrid, Miami, Montreal, Munich, New York, Oslo, Ottawa, Paris, Port Louis, Oporto, Rotterdam, Seoul, Singapore, Sydney, Toronto, Vancouver, Vienna and Zurich.

The green traffic light indicates a positive assessment of the jurisdiction, the yellow light signals the need to exercise caution, and the right light indicates a potentially significant difficulty.

Garrigues has offices in some of the places identified as safe seats by Delos, such as Lisbon, London, Madrid, New York and Oporto.

Delos is currently on a road show to present its GAP guide. The next stop will be Madrid, on November 6, and the conference will be held at the Garrigues head offices.