A. LEGISLATION AND RULES
A.1 Legislation
International arbitration in Argentina continues to be governed by:
- The National Civil and Commercial Code 2015 (“Civil and Commercial Code”)
- The Law on International Commercial Arbitration 2018
- The New York Convention, to which Argentina is a signatory
No legislative amendments have been made since their enactment.
In the area of public law arbitration, relevant additions have been made by the “Law of Bases and Starting Points for the Freedom of Argentines” (“Bases Law“), approved on 28 June 2024 by the National Congress and enacted by the Executive Branch on 8 July 2024. The initial project sent by the Executive Branch to the National Congress included more significant changes in this area which were not included in the final sanction. Therefore, the Bases Law as approved by Congress:
- Establishes that all disputes arising out of the Bases Law’s Large Investments Incentive Regime (RIGI) must be subject to international arbitration in accordance with the rules of the Permanent Court of Arbitration (CPA), International Chamber of Commerce (ICC), or International Centre for Settlement of Investment Disputes (ICSID) at the choice of the project holders.
- Expressly authorizes that public works and utilities concession contracts can resort to dispute resolution mechanisms such as arbitration.
A.2 Institutions, rules and infrastructure
The General Arbitration Tribunal of the Buenos Aires Stock Exchange has adopted new arbitration rules, which became effective on 1 March 2024. The new rules entered into force even for existing arbitral proceedings as long as they do not affect the legitimate rights acquired by the parties.
The new rules introduce several significant features, for example they explicitly list additional principles of arbitration. These principles include flexibility of formalities, proportionality, cooperation, party autonomy and good faith.
Moreover, the new rules emphasize the independence and impartiality of arbitrators, including a duty of disclosure throughout the arbitration process, to ensure that arbitrators remain unbiased and transparent. In addition, a new requirement for parties to disclose any third-party funding arrangements has been introduced to ensure transparency and avoid conflicts of interest.
The new rules also provide more detailed guidance on several parts of the arbitration procedure, including the preliminary hearing, the use of electronic means for notifications and submissions, and the possibility of holding virtual hearings.
Furthermore, a new accelerated arbitration procedure has been introduced for cases that justify a faster resolution, including shorter deadlines for various stages of the arbitration process and the possibility of deciding the case based on documents only. Under the new rules, the proceedings align more closely with international standards, as they include the possibility of applying the International Bar Association Rules on the Taking of Evidence in International Arbitration.
Lastly, this new version clarifies the grounds for appealing or nullifying an arbitration award, including the introduction of a specific list of causes for nullity. These changes aim to modernize the arbitration process, making it more efficient, transparent, and aligned with international best practices.
B. CASES
B.1 The validity of arbitration clauses in commercial relationships with evergreen agreements
In Nextmedici S.R.L. (“Plaintiff“) v. Penumbra Inc. (“Defendant“)[1], the National Court of Appeals in Commercial Matters (“Court of Appeals“) upheld the first instance decision that had admitted the motion of lack of jurisdiction filed by Defendant. This was due to the existence of a distribution contract between the parties that contained an arbitration clause, whereby the parties voluntarily and previously submitted to an arbitral tribunal for the resolution of any disputes related to the contract.
The Plaintiff appealed this decision, arguing that the contract establishing the arbitration clause had expired before the events in question occurred, without the parties agreeing to extend or renew its provisions. Therefore, the Plaintiff claimed that the arbitration clause was not in effect at the time of the events and that it could not be interpreted so that the parties continued to be bound by the arbitration clause after the expiration of the contract that established it.
In its opinion, the Public Prosecutor highlighted that the commercial relationship between the parties began in 2013 with the execution of the contract that included the arbitration clause. Over time, several other contracts of similar characteristics followed, including the one in effect at the time of the events. For this reason, it was understood that the commercial relationship between the parties was governed by the contract containing the arbitration clause and, despite its expiration, this contract continued to be the basis of the claim.
In this regard, the Court of Appeals concluded that, since it did not appear from the subsequent contracts that the parties had objected to the clause agreed upon in the first contract, the arbitration clause remained in effect for disputes related to the commercial relationship originating from the first contract between the parties, beyond its expiration, unless the subsequent contracts explicitly objected to this clause.
This ruling constitutes a novel interpretation of the scope of arbitration clauses, insofar as it extends it to subsequent contracts within the same commercial relationship, remaining in effect unless a change or explicit objection is included in subsequent contracts.
B.2 The enforceability of arbitration clauses in commercial relationships involving adhesion contracts.
In the case Infomedia Consulting SRL (“Plaintiff“) v. Voith Hydro LTDA (“Defendant“)[2], the National Court of Appeals in Commercial Matters (“Court of Appeals“) upheld the initial decision that accepted the Defendant’s objection to jurisdiction. This was due to a service contract between the parties that included an arbitration clause, where both parties had voluntarily and previously agreed to submit any contract related disputes to an arbitral tribunal.
The Plaintiff appealed this decision, arguing that the arbitration clause should not apply because the contract was an adhesion contract, and the clause was abusive and against public policy. The Plaintiff also claimed that the additional arbitration costs were disproportionate to the economic value of the claim.
Nevertheless, the Chamber of Appeals acknowledged that in this instance, the contract was between two companies and involved available patrimonial matters, which justified the application of the arbitration clause. The court highlighted that the additional arbitration costs were foreseeable and should have been taken into account by the parties when agreeing to the arbitration clause.
It is relevant that the Chamber admitted the operability of the arbitration clause even in cases of adhesion contracts, contrary to what is established in the Civil and Commercial Code. This reasoning is based on the jurisdiction’s case law, which interprets that the article disregards its purpose of facilitating negotiations in adhesion contracts between companies on available patrimonial matters. The rule was not meant to override an agreed upon contract when the contracting party could not be considered surprised by its inclusion in the governing scheme.
This decision represents an innovative interpretation of the scope of arbitration clauses that establish arbitral jurisdiction for dispute resolution, providing that voluntary submission to an arbitral tribunal extends to disputes arising from the commercial relationship governed by the contract, even in adhesion contracts. The ruling underscores the importance of considering the specific context and parties involved in the contract.
B.3 The impact of waiver clauses in arbitral awards
In YPF S.A. (“Plaintiff“) v. ENERGÍA ARGENTINA S.A. (“Defendant“)[3], the National Court of Appeals in Commercial Matters (“Court of Appeals“) upheld the decision of the General Arbitration Tribunal of the Buenos Aires Stock Exchange (“Arbitral Tribunal“), which declared the inadmissibility of the Defendant’s appeals and annulment requests against the award. This decision was based on the arbitration clause agreed on by the parties.
The Defendant filed an appeal against the Arbitral Tribunal’s decision, arguing that the parties had not expressly waived their right to appeal. It contended that neither the arbitration clause of the contract nor any subsequent agreements included an express waiver of the right to appeal.
However, the Court of Appeals concluded that by agreeing to the “express waiver of any other forum or jurisdiction,” the parties had given the award a definitive character and had voluntarily waived the right to appeal the decision.
The case was governed by the former version of the Tribunal’s Arbitration Rules (“Rules“), as the dispute had to be governed by the rules in force at the time the transfer of the claim was notified, which occurred in 2022, before the change of the Rules in March 2024.
The Court of Appeals determined that the voluntary waiver of the right to appeal did not violate public policy or constitutionally protected rights. Instead, it constituted a waiver of a legal right, specifically the possibility of review by a higher instance, as the guarantee of double instance does not have constitutional hierarchy in civil trials.
In addition, the court emphasized that the grounds for filing an annulment request, as established by the Rules and the Civil and Commercial Code, did not include an alleged arbitrariness of the award decision. Thus, the appellant’s arguments did not meet the specific legal grounds required for annulment.
The interpretation adopted by the Court of Appeals reflects its understanding that the inclusion of a waiver of any other forum or jurisdiction in an arbitration agreement imparts a definitive character to the award and constitutes the parties’ voluntary waiver of their right to appeal.
[1] Cámara Nacional de Apelaciones en lo Comercial, Sala F, (National Court of Appeals on Commercial Matters), 21 March 2024, “NextMedici S.R.L. c/ Penumbra Inc. s/ Ordinario”, Exp. No. 5061/2020
[2] Cámara Nacional de Apelaciones en lo Comercial, Sala D, (National Court of Appeals on Commercial Matters), 18 June 2024,”Infomedia Consulting SRL c/Voith, Hydro LTDA s/Ordinario”, Exp. No. 21068/2021
[3] Cámara Nacional de Apelaciones en lo Comercial, Sala E, (National Court of Appeals on Commercial Matters), 13 August 2024, “YPF S.A. C/ ENERGÍA ARGENTINA S.A. S/ RECURSO DE QUEJA (OEX)”, Exp. No. 10882/2024
