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The International Arbitration Review: Argentina

Federico Campolieti and Santiago Peña
Bomchil
14 July 2022

Introduction
i Structure of the law

Argentina is a federal republic, with both federal and provincial levels of political organisation. While substantial provisions
(such as civil and commercial law) are enacted by the Federal Congress and are applicable to the whole nation, rules of
procedure are passed by the legislative branch of each province.2

Until 2015, arbitration proceedings were exclusively governed by the procedural codes of each jurisdiction. The National Code
of Civil and Commercial Procedure (NCCCP)3 governed arbitration proceedings seated in the city of Buenos Aires, and several
provincial procedural codes contained similar provisions to that regulation.

In 2015, the National Civil and Commercial Code (NCCC)4 entered into force: since then, it regulates arbitration agreements
whose provisions are applicable to all jurisdictions.

On 4 July 2018, Law No. 27,449 on International Commercial Arbitration (ICAL) was enacted. The ICAL mostly adopts the
UNCITRAL Model Law on International Commercial Arbitration (UNCITRAL Model Law), as amended in 2006, and regulates
international commercial arbitration proceedings.

Thus, while at a domestic level arbitration proceedings are regulated by the NCCC (as a unique set of substantial rules
applicable to all jurisdictions) and the procedural codes (for procedural matters) of each jurisdiction, international commercial
arbitration proceedings are exclusively regulated by the ICAL.

Neither the NCCC nor the ICAL are applicable to disputes to which the state is a party. Hence, this matter is left to special
laws, international treaties and conventions.

Finally, Argentina is a party to:

a. the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NY Convention);5
b. the 1965 Washington Convention on the Settlement of Investment Disputes Between States and National of Other States;6
c. the 1975 Inter-American Convention on International Commercial Arbitration;7 and
d. the 1979 Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards.8

ii Structure of the judicial courts

Due to the federal political organisation established in the Argentine Constitution, the judicial system in Argentina is divided
into federal and provincial courts. Generally, both judicial systems have lower courts, courts of appeal and a supreme court.
The Federal Supreme Court of Justice of Argentina is the highest judicial authority.

There are no specialised judicial courts for arbitration matters. Regarding proceedings related to commercial arbitration, both
local and federal courts have jurisdiction over their respective fields.

According to the ICAL, assistance in arbitral proceedings will be provided by lower courts, while decisions on annulment
applications will be rendered by the court of appeals on commercial matters of the arbitration seat.9

iii Local institutions

The main local arbitral institutions are the General Arbitral Tribunal of the Buenos Aires Stock Exchange, the Business Centre
for Mediation and Arbitration (CEMA), the Centre for Mediation and Commercial Arbitration of the Argentine Chamber of
Commerce and the Arbitral Chamber of the Buenos Aires Cereal Exchange.

The General Arbitral Tribunal of the Buenos Aires Stock Exchange's Rules on Arbitration have been in force since 1993 (with
some amendments approved in 2018 and 2019) and deal with both domestic and international arbitrations. The General
Arbitral Tribunal is composed of three permanent arbitrators who are appointed by the board of the institution.10

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The CEMA was established in 1997 and provides both mediation and arbitration services.11 The CEMA adopted the
UNCITRAL Arbitration Rules (as revised in 2010).12 Unless otherwise agreed by the parties, the arbitral tribunal shall be
composed of three members (one nominated by each party and the third arbitrator is appointed by the two selected
arbitrators). Although the CEMA has its own list of arbitrators, the parties may appoint arbitrators out of this list.

The Centre for Mediation and Commercial Arbitration of the Argentine Chamber of Commerce offers both mediation and
arbitration services, specialising in business matters. It provides a list of arbitrators who have significant expertise in both the
business and arbitration field.13 However, parties can appoint arbitrators out of the list provided by the Centre.14

The Arbitral Chamber of the Buenos Aires Cereal Exchange provides conciliation, mediation and arbitration services with
permanent arbitrators that solve disputes concerning the grain trade and other agricultural products.15

With respect to institutional arbitrations for international disputes, the most frequently used arbitral institution and rules are
those of the International Chamber of Commerce.

iv Arbitration statistics

According to the statistics provided by the Latin American Arbitration Conference (LAAC),16 the majority of the international
arbitration proceedings related to Argentina (i.e., arbitrations in which the seat is a city of Argentina or one of the parties is
domiciled in Argentina) are administered by the ICC Court under the ICC Rules and are related to construction and
engineering disputes. Despite the statistics provided by LAAC, there are no general statistics available on the number of
arbitrations promoted in Argentina. Nevertheless, arbitration as a dispute resolution mechanism has become more common in
the past few decades and has been increasingly used in recent years as a mechanism of dispute settlement.
The year in review
i Developments affecting international arbitration

The past few years were singular for arbitration in Argentina, mainly impacted – as in the rest of the world – by the
consequences of the covid-19 pandemic.

After years of relevant legislative innovations (such as the entry into force of the NCCC in 2015 and the enactment of the ICAL
in 2018), there were no legislative developments in arbitration-related matters during 2021.

Nevertheless, during 2020 and 2021 judicial courts issued some relevant decisions related to international arbitration that are
worth mentioning.

ii Arbitration developments in local courts

Judicial review of arbitral awards

On 10 May 2021, the court of appeals on commercial matters seated in the city of Buenos Aires rendered a decision on the Ms
Master Sweets case,17 in which it confirmed the restrictive criterion adopted by the referred court18 – as well as by the Federal
Supreme Court19 – concerning the scope and extent of the judicial review of arbitral awards.

In this case, the court of appeals rejected an application to set aside an award issued by the General Arbitral Tribunal of the
Buenos Aires Stock Exchange. According to the court of appeals, the annulment application must be based on one of the
limited and specific grounds set forth under the applicable law. It is not permitted to the courts to analyse the justice or
injustice of the ruling or its content as to the merits of what was resolved by the arbitrators, in similar terms as those used by
the Federal Supreme Court of Justice in two relevant precedents of 2017 and 2018.20

The decision of the court of appeals is particularly relevant because it ratifies: (1) the restrictive interpretation that must be
made in assessing the admissibility of a request for annulment; and (2) the fact that the courts cannot review the merits of a
dispute once decided by arbitration.

Annulment of an arbitral award for failing to address an arbitrator challenge

On 3 June 2020, the court of appeals on commercial matters seated in the city of Buenos Aires rendered a decision in the
Llorente case,21 regarding the annulment of an arbitral award.

In this case, the parties had intervened in an arbitration administered by the CEMA in which the arbitral tribunal issued a
majority award. The dissenting arbitrator had refused to sign the award on the grounds that the other two arbitrators had not
allowed him to deliberate.

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The party affected by the award filed a set aside application before the court of appeals on commercial matters stating, in
substance, that the award was not valid because (1) the necessary deliberation among the arbitrators had not taken place and
(2) there were numerous flaws in the proceedings, including the existence of a challenge of one of the arbitrators that had not
been decided.

While the court of appeals rejected the first ground of the challenge, it set aside the award based on the second ground,
noting that, despite having challenged one of the arbitrators who was part of the majority, the arbitral tribunal never
substantiated or decided such challenge. In the court's view, this failure constituted an essential procedural error that justified
the annulment of the arbitral award.

Recognition and enforcement of foreign arbitral awards

On 5 August 2021, the Federal Supreme Court issued a relevant decision with respect to the recognition and enforcement of
22
foreign arbitral awards in the Milantic case. Milantic Trans SA (Milantic) entered into a contract for the construction of a ship
for the state-owned company Astillero Río Santiago (a public entity of the Province of Buenos Aires; ARS), which gave rise to
a dispute between the parties. The dispute was submitted to an arbitral tribunal seated in London. The arbitral tribunal
rendered a final award on 15 November 2004, ordering ARS to pay Milantic around US$3 million plus interest.

Milantic requested the recognition and enforcement of the award in accordance with the NY Convention, which was admitted
by the first instance judge for contentious-administrative matters of La Plata on 17 November 2006. ARS appealed such
decision only on the allocation of costs, arguing that they should be borne equally by both parties.

On 30 August 2007, the court of appeals for contentious-administrative matters of La Plata revoked the decision of the lower
court and rejected the recognition and enforcement of the award. To reach such decision, the court considered that, although
ARS limited its appeal to the allocation of costs, it had the duty to examine the substance of the main claim and to evaluate
the existence of an error of judgment in the challenged decision, as under Article V.2 of the NY Convention the courts must
deny a request for recognition and enforcement of a foreign arbitral award based on public policy reasons. Therefore, the court
of appeals found that the award was not valid because ARS did not have capacity to execute the arbitration agreement, as a
result of the legislature of the Province of Buenos Aires not having authorised the execution of such agreement, which
constitutes – in the court's view – a violation of public order.

Milantic filed an extraordinary appeal against the court of appeal's decision, which was granted. The Federal Supreme Court
considered that the court decision was arbitrary because the ex officio intervention of the court of appeals constituted a
violation of the principles of congruence and res judicata. Therefore, it declared the extraordinary appeal admissible and
revoked the court of appeal's decision.

In its decision, the Federal Supreme Court stated that the appeal filed by ARS exclusively intended to challenge the costs
allocation, which excluded the possibility of examining the main dispute between the parties. According to the Federal
Supreme Court, the jurisdiction of the courts is limited by the terms in which the procedural relation is established and the
scope of the appeal granted. Therefore, a violation of such limitations implies a breach of the principle of congruence
enshrined in Articles 17 and 18 of the National Constitution. Moreover, the Federal Supreme Court emphasised that res
judicata is one of the fundamental pillars on which the constitutional regime is based. Consequently, except for cases in which
the nullity of a final judicial decision had been admitted, res judicata cannot be altered, even when public order reasons are
invoked.

Separability of the arbitration clause principle

On 22 March 2021, the court of appeals on commercial matters seated in the city of Buenos Aires rendered a decision in the
23
Buhler case, reaffirming a relevant interpretation of the separability of arbitration clauses.

In fact, although the court rejected a request for the constitution of an arbitral tribunal in the case at hand (considering that
there was no valid arbitration agreement), it stated that the arbitration agreement constitutes a contract, which forces the
parties to submit their disputes to arbitration (and the courts should refer the parties to arbitration). This decision confirms the
criterion adopted by the court of appeals, favourable to the separability of the arbitration agreements.24

Interim measures

On 14 September 2021, the court of appeals on commercial matters seated in the city of Buenos Aires rendered a relevant
decision regarding interim measures in the Energías Renovables del Sol case.25

The court of appeals decided to grant the appeal filed by the respondent (Compañía Administradora del Mercado Mayorista
Eléctrico SA; CAMMESA) against the decision issued by the lower court, which had granted interim measures requested by
Energías Renovables del Sol SA (ERRSA), ordering the suspension of the execution of a fine imposed by CAMMESA. The

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court of appeals considered that the only ground invoked by ERRSA to request the interim measures was the alleged urgency
to suspend the execution of the fine imposed by CAMMESA during the constitution of the arbitral tribunal, which would be
contrary to the contract executed by the parties and thus, no likelihood of success was proved.

Arbitrability

26 27
In the Abre SRL case and in the Vanger SRL case, the court of appeals on commercial matters seated in the city of Buenos
Aires confirmed the validity of the arbitration agreements contained in adhesion contracts, even though Article 1651 of the
NCCC expressly forbids arbitration in disputes related to this kind of agreements.

In Abre SRL, the court of appeals decided to declare the lack of jurisdiction of the judicial courts to hear the case by confirming
the validity of the arbitration clause included in the contract executed by the parties, despite it being an adhesion contract.

In the Vanger SRL case, the court of appeals rendered a similar decision declaring that the prohibition set forth in Article 1651
of the NCCC was intended to prevent any possible abuse of bargaining power, protecting the adherent party, but it does not
apply to adhesion contracts executed between parties of equal or similar bargaining power. In addition, the court of appeals
stated that both companies were specialised in the same activities and endowed with sufficient importance, concluding that
the arbitration agreement was valid even if it was part of an adhesion contract.

Through these decisions, the court of appeals confirmed the criterion adopted during 2018 in the Servicios Santamaria case,28
clearly favourable to the validity of arbitration agreements.

29
Nevertheless, on 27 August 2019, the court of appeals on commercial matters rendered a decision in the Travel case,
rejecting the respondent's request to refer the parties to arbitration based on the prohibition set forth in Article 1651 of the
NCCC. In this case, the parties were bound by a franchise contract that contained an arbitration clause and after a dispute
arose between them, the franchisee decided to initiate a claim against the franchisor before the judicial courts on commercial
matters. The franchisor (Samsonite Argentina SA) requested to the commercial court to refer the parties to arbitration in
accordance with the arbitration clause contained in the franchise contract. Although the lower court decided to admit the
respondent's request, the court of appeals decided to revoke this decision and reject the request made by the franchisor.
Actually, the court considered that the franchise contract is – by definition – an adhesion contract and, despite having the
burden of proof, the respondent failed to prove that the parties negotiated the terms of the contract on equal terms, having
only presented elements that would prove the existence of a negotiation on the arbitration clause. In addition, the court of
appeals emphasised that even if the parties would have negotiated the arbitration clause, the contract should still be qualified
as one of adhesion and, as a consequence, arbitration would still be prohibited by virtue of Article 1651 of the NCCC.

iii Investor–state disputes

Argentina ratified the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals
of Other States on 19 October 1994, which entered into force in Argentina on 18 November 1994. Argentina has also
approved more than 60 bilateral investment treaties (BITs).

On the basis of publicly available information, during 2021, eight investment arbitrations brought against Argentina were
pending. Seven of them were administrated by the International Centre for Settlement of Investment Disputes while only one
was brought before the Permanent Court of Arbitration (PCA) under the UNCITRAL Rules.30

The BITs invoked in these recent cases were the Argentina–United States of America BIT (three cases), the Argentina–United
Kingdom BIT, the Argentina–Italy BIT, the Argentina–Spain BIT, the Argentina–Netherlands BIT and the Argentina–Austria
BIT.
Outlook and conclusions
During the last two years, Argentina was shaken – as was the rest of the world – by the covid-19 pandemic. As a
consequence of the lockdown and other restrictive measures adopted by the national government, there were no relevant
legislative developments in the field of international arbitration.

However, during recent years, several important judicial decisions have been issued regarding the judicial review of arbitral
awards, the recognition and enforcement of foreign arbitral awards, the separability of the arbitration clause principle, interim
measures and arbitrability, all of which reinforce a favourable criterion towards arbitration.

Footnotes
1
Federico Campolieti is a partner and Santiago Peña is a senior associate at Bomchil.

2
See Articles 5, 75, Subsections 12, 121 and 123 of the Argentine Constitution.

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3
The National Code of Civil and Commercial Procedure, enacted through Law No. 17,454 of 19 September 1967 was
amended, inter alia, by Law No. 22,434 of 16 March 1981 and Law No. 25,488 of 22 November 2001.

4
The National Civil and Commercial Code, enacted by Law No. 26,994.

5
Approved by Law No. 23,619 of 28 September 1988.

6
Approved by Law No. 24,353 of 28 July 1994.

7
Approved by Law No. 24,322 of 11 May 1994.

8
Approved by Law No. 22,921 of 21 September 1983.

9
Article 13 of the ICAL.

10
www.bcba.sba.com.ar/institucional/tribunal/.

11
www.medyar.org.ar/index.php.

12
The appointing authority is the President of the Executive Committee of the CEMA.

13
www.cac.com.ar/institucional/mediacion_y_Arbitraje__Mediation_and_Arbitration_1668.

14
The Centre has two sets of rules for arbitration proceedings (2005 and 2017 versions), which are available in Spanish and
English (an official translation is available in the Centre's website).

15
www.cabcbue.com.ar/#!/.

16
See http://www.clarbitraje.com/v2/wp-content/uploads/2020/12/Informe-CLA.pdf.

17
Court of Appeals on Commercial Matters, 10 May 2021, Ms Master Sweets v. Mondelez Argentina SA s/ recurso de queja.

18
See Court of Appeals on Commercial Matters, 11 July 2013, Seven Group SA v. ADT Security Services SA; 12 April 2016,
Amarilla Automotores SA v. BMW Argentina SA; 12 April 2017, Díaz, Rubén H v. Techint Cía Técnica Internacional SACEI; 19
December 2017, Pan American Energy LLC (Sucursal Argentina) v. Metrogas SA (Chile); 20 March 2018, Emaco SA v.
Finisterre SA; 18 July 2019, Pott, Alfredo Carlos v. Patagonia Financial Holdings LLC et al.

19
See Federal Supreme Court, 17 November 1994, Color SA v. Max Factor Sucursal Argentina; 24 August 2005, Pestarino de
Alfani, Mónica Amalia v. Urbaser Argentina SA; 5 September 2017, Ricardo Agustín López, et al. v. Gemabiotech SA; 6
November 2018, EN – Procuración del Tesoro Nacional v. (nulidad del laudo del 20-III-09).

20
The relevant precedents in which the Federal Supreme Court of Justice adopted the restrictive criterion in the judicial review
of arbitral awards are the Ricardo López et al. v. Gemabiotech SA case (decided on 5 September 2017) and EN – Procuración
del Tesoro Nacional v. (nulidad del laudo del 20-III-09) case (decided on 6 November 2018).

21
Court of Appeals on Commercial Matters, 3 June 2020, Llorente y Villarruel Contenidos SA v. Telefé Federal SA.

22
Federal Supreme Court, 5 August 2021, Milantic Trans SA v. Ministerio de la Producción (Ast. Río Santiago et al.).

23
Court of Appeals in Commercial Matters, 22 March 2021, Buhler, Lucia v. Buhler SRL et al.

24
See Court of Appeals in Commercial Matters, 26 September 1988, Welbers SA, Enrique C v. Extrarktionstechnik Gesellschaft
Fur Anlagenbav MBM; 23 June 2015, Omni SRL v. Clínica de Ojos Dr Carlos María Aranda SRL et al.; 30 August 2019, Abre
SRL v. Telecom Personal SA.

25
Court of Appeals in Commercial Matters, 14 September 2021, Energías Renovables del Sol SA v. Compañía Administradora
del Mercado Mayorista Eléctrico SA (CAMMESA).

26
Court of Appeals in Commercial Matters, 30 August 2019, Abre SRL v.Telecom Personal SA.

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27
Court of Appeals in Commercial Matters, 6 June 2019, Vanger SRL v. Minera Don Nicolás SA.

28
Court of Appeals in Commercial Matters, 24 May 2018, Servicios Santamaría SA v. Energía de Argentina SA.

29
Court of Appeals on Commercial Matters, 27 August 2019 Travel Cba SRL v. Samsonite Argentina SA.

30
ICSID Cases Nos ARB/17/17; ARB/15/39; ARB/14/32; ARB/03/27; ARB/02/17, ARB/19/25; and ARB/19/11; and PCA Case
No. 2010-9.

Federico Campolieti
Author
federico.campolieti@bomchil.com

Santiago Peña
Author
spena@consultatio.com.ar

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