Ibero-American arbitration, a commitment by SEGIB, CEIB and CIAR

The Ibero-American Secretary General, Andrés Allamand; the President of the CEOE, Antonio Garamendi, and the President of the Ibero-American Arbitration Centre-CIAR, Javier Íscar, opened a conference at the CEOE on Ibero-American arbitration and the importance of continuing to support this instrument, which has proven to be the most effective and secure instrument for resolving disputes in the region. Moreover, they reported on the work done by CIAR, as a leading centre in the Ibero-American area.

Also participating in the conference were Fernando Díaz, the Director of Legal Advice at Sacyr, Antonio Muñoz-Murillo, the Head of Litigation at the Iberdrola Group, and Dorleta Vicente, the Director of Legal Advice at Ecoembes. This panel, entitled “Arbitration in a new international reality”, was moderated by the president of the Advisory Council of CONFIEP and vice-president of CIAR Spain, María Isabel León.

Arbitration: a key instrument in the internationalisation of companies

In his speech, the President of the CEOE, Antonio Garamendi, stressed the importance of the work done by the Ibero-American Arbitration Centre-CIAR, thanks to its solid commitment to developing and implementing an effective and secure tool in the region’s business ecosystem to meet the needs and challenges arising from companies’ activities. “In the current context, it is obvious that we all need to do our best to resolve the natural disputes that arise, especially when a company is facing the difficult task of accessing new markets, exporting and investing,” he said. There is no doubt that, in the current situation, there will be a rise in differences and disagreements between companies, which will have to be resolved as well as possible, construing contractual commitments and avoiding recourse to legal proceedings which, on many occasions, are lengthy and very costly.

Thus, Garamendi reported that an increasing number of companies are including the “CIAR clause” as a dispute resolution mechanism, a clause we share and which the institutions that are part of the Centre advocate. “The Ibero-American businesspeople and their 24 representative organisations that are part of CEIB are very pleased to have a reliable and neutral dispute resolution system, which essential for the proper carrying on of interregional trade, based on the common legal culture of Ibero-American countries and which especially benefits small and medium-sized enterprises, which, as we all know, represent the majority of the business sector in the Region and which are responsible for most of the job creation”, he stated.

CIAR: a benchmark in Ibero-American arbitration

For the president of CIAR, Javier Íscar, the Ibero-American Arbitration Centre must become the natural Arbitration Centre for all commercial relationships between companies in the 22 Ibero-American countries. “Having the support of the Ibero-American General Secretariat- SEGIB, the Conference of Ibero-American Ministers of Justice-COMJIB and the commitment of the Ibero-American legal profession and companies in the region with the Ibero-American Business Council-CEIB and the CEOE, offers that added confidence required for the CIAR arbitration clause to be included in thousands of contracts every week,” he said.

Íscar also insisted that a commercial transaction must be undergirded by a contractual clause and in this area CIAR already plays a very important role. Thus, businesses are at the heart of the centre’s mission, it is essential to listen to them and understand their work to resolve disputes properly.

The rule of law and legal certainty are key to trade and investment

The Ibero-American Secretary General, Andrés Allamand, in turn said that if one looks at the region, one sees both strengths and weaknesses, and an example of the latter is the trend of low growth in recent years. The problem is that “when growth is modest, so is progress”, and to address this, trade and investment are paramount. What is required to make both factors a reality are the rule of law and legal certainty; and to guarantee the latter element, according to Allamand, the stability of regulatory frameworks is essential, not only laws, but also regulations, decrees and administrative orders. The main threats in the current situation are the political context when it is not aligned with regulatory frameworks; and the authorities’ interpretation of laws and regulations, which should always be correct.

Without appropriate dispute resolution mechanisms and the right regulatory frameworks, Allamand said, there will be no legal certainty. This is why it is key to promote CIAR, he added, since it acts as an intermediary to guarantee trade and investment by way of legal certainty. This institution, he reported, has reputable arbitrators and specialists and a shared culture, which make CIAR the leading centre for operating within the region and for the region. Moreover, he stressed, it should be borne in mind that arbitration is mainly used only by large companies, whereas small and medium-sized enterprise are in fact the ones who need this tool the most, largely due to their lack of resources. “The Ibero-American community is flourishing, it has a political and institutional framework and, above all, tremendously vibrant business organisations that contribute to the community’s social capital,” he concluded.

Arbitration in a new international reality

On the panel “Arbitration in a new international reality”, moderated by the president of the Advisory Board of CONFIEP (Peru) and Vice-President of CIAR, María Isabel León, the Director of Legal Consultancy at Sacyr, Fernando Díaz; the head of Litigation at the Iberdrola Group, Antonio Muñoz-Murillo, and the Director of Legal Consultancy at Ecoembes, Dorleta Vicente, highlighted the use of arbitration in the Ibero-American area to resolve various disputes.

The speakers stressed that the arbitration clause is of particular significance when investing abroad, since having a method for resolving disputes allows one to operate with peace of mind. Democratising this mechanism could stimulate investments by smaller companies. At a time of legal uncertainty resulting from new regulatory packages in the context of the energy crisis, arbitration is a useful tool for offsetting uncertainty when making a major investment and to compensate for the interference by some governments in public institutions and in the private sector. In the case of construction firms, the problems resulting from legal uncertainty often appear once the works have been completed, which adds a factor of uncertainty that should be borne in mind.

Thus, CIAR is an option to apply the clause and resolve disputes with an Ibero-American entity with a system familiar to the region, and not through an external body. Arbitration is not only widely used in large companies; public institutions, especially in Latin America, already use this tool to avoid greater costs and complications. However, arbitration is still very costly for SMEs, hence most do not consider it as an option.