- Arbitral Award
- ICC International Court of Arbitration, Montevideo 11317
LONG-TERM CONTRACTS - SERVICE CONTRACT - BETWEEN A SPANISH COMPANY AND A BRAZILIAN COMPANY - REFERENCE BY ARBITRAL TRIBUNAL TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (SPANISH LAW)
CHOICE OF LAW CLAUSE IN FAVOUR OF SPANISH LAW - BRAZILIAN PARTY INVOKING THE APPLICATION OF BRAZILIAN LAW ACCORDING TO ART. 9(2) OF THE INTRODUCTORY LAW TO BRAZILIAN CIVIL CODE (PRINCIPLE OF LOCUS REGIT ACTUS) - ARBITRAL TRIBUNAL CONFIRMS THE VALIDITY OF THE APPLICABLE LAW CHOICE ON THE BASIS OF BOTH SPANISH AND BRAZILIAN LAW - REFERENCE TO ARTS. 1.4 AND 1.7 UNIDROIT PRINCIPLES IN ORDER TO CONFIRM THE DECISION
Respondent, a Brazilian company, agreed to purchase maintenance and refurbishment services from a Spanish company (First Claimant), which assigned the contract to its Brazilian subsidiary (Second Claimant). A dispute arose between the parties over the interpretation, performance and termination of the agreement.
In a Partial Award, the Arbitral Tribunal ruled on two preliminary questions: the language of the arbitration and applicable law.
With regard to the first question, the Arbitral Tribunal decided that the language of arbitration was Spanish since the parties had chosen Spanish law as the law applicable to the contract and a Spanish-speaking country as the venue of arbitration.
As to the question of applicable law, Respondent argued for the application of Brazilian law, rather than Spanish law, as provided in the contract, on the grounds that the agreement formed an integral part of the contract for the concession of a special public service in Brazil and that Article 9 of the Introductory Law to the Brazilian Civil Code provides that for the purpose of characterizing and regulating obligations, the law of the country in which those obligations are constituted shall apply. The Arbitral Tribunal rejected Respondent's argument, affirming that the choice of Spanish law as the law applicable to the substance of the dispute was not contrary neither to Brazilian law nor to Spanish law. In addition, according to the Arbitral Tribunal "the application of Spanish law was not contrary neither to the mandatory rules of public order nor to the principle of good faith, which are generally recognized as fundamental principles of international commercial contracts (see Arts. 1.4. and 1.7 UNIDROIT Principles)".
Published in Spanish (excerpt):
- ICC International Court of Arbitration Bulletin, Vol. 23/1, 2012, pp. 49-51}}