The Spanish Cabinet has recently passed a Royal-Decree Law implementing the 2008/52/CE Directive on Mediation in civil and commercial matters published on 6 March 2012 in the Official State Gazette (Real Decreto-ley 5/2012, de 5 de marzo, de mediación en asuntos civiles y mercantiles).

This Royal-Decree Law introduces mediation as an alternative dispute resolution method for settling internal and cross-border disputes under civil and commercial law which was, so far, not contemplated by Spanish legislation.

Subject to minor amendments which could be introduced when the Royal-Decree Law is approved as a Law, the main features of the new Law are the following:

1. It provides for the establishment of mediation institutions as well as a specific training offered by accredited institutions in order to qualify as a mediator;

2. It concerns civil and commercial matters with the express exclusion of matters relating to criminal law, labour law, consumer protection law and public administrations;

3. This Law applies when at least one of the parties has its domicile in the Spanish territory and the mediation is taking place in Spain;

4. The mediation can either result from the agreement of the parties or be suggested by the court or tribunal hearing the dispute. However, the court or tribunal can, if it deems appropriate according to the circumstances of the case, compel the parties to attend an information meeting (i.e. the first phase of the mediation process);

5. Once the mediation process is commenced by the parties, i.e. once the request for mediation is filed, time limitation periods stop running;

6. The mediation process can be conducted by one or several qualified mediators;

7. Mediators shall be impartial and neutral, and shall disclose any information which they consider could affect their impartiality or give rise to a conflict of interest;

8. The whole procedure is confidential and the information disclosed in the course of the mediation cannot be used before a court or tribunal if the parties do not reach an agreement;

9. The parties can settle the entire dispute or part of it;

10. The settlement agreement entered into by the parties can be enforced by:

(i) the court or tribunal that heard the dispute in the first case, if judicial or arbitral proceedings were pending; or

(ii) the Tribunal of First Instance of the place where the agreement was signed if the parties went directly to mediation;

11. Settlement agreements made in another EU Member State can be enforced in Spain where an equivalent competent State authority has granted enforcement.

From now on, dispute resolution escalation clauses dealing with mediation are something to be considered in contracts in Spain.  Bird & Bird has a wealth of experience in drafting such escalation clauses and we are happy to discuss your requirements with you to ensure that the escalation clauses agreed to are suitable for the contract in question.

Should you require any further information about the Directive or about our Dispute Resolution Group in Spain or worldwide, please do not hesitate to contact Javier Fernandez-Samaniego on +34 91 790 6010 or javier.fernandez-samaniego@twobirds.com.