Spain

In broad terms, the 1979 Act altered the system of ‘judicial review’ of arbitration awards. Judicial review is the process whereby the High Court will review the proceedings of the arbitration (or any inferior court/tribunal) to ensure that the rules of ‘natural justice’ have been followed and the parties have obtained a fair hearing. The phrase ‘natural justice’ refers to the doctrine that all persons are entitled to have their case heard according to the legal procedural rules. Thus, where the rules of procedure or administration are not complied with, there is a breach of natural justice. The phrase has nothing to do with the application of equity and equitable remedies. (In other words, natural justice is not a provision of ‘fairness’, but of ‘sticking to the rules’). The High Court will also ensure that the arbitrators have not acted outside their powers. (Another feature of ‘natural justice’). Although judicial review of an arbitration is still obtainable, the 1979 Act severely restricted the procedure in respect of arbitration. No longer is it possible to have a finding of fact reviewed. The new procedure is to be found in Section 1 (2) of the 1979 Act and is exclusively concerned with errors in law. One case of particular importance in relation to the issue of judicial review is the House of Lords’ decision in The Nema (1980). This case was the ‘test case’ for the application of Section 1 (3) and (4) of the 1979 Act. The owners of the Nema chartered her to charterers for seven consecutive voyages to Sorel in Canada. Sorel is a port on the bank of the St. Lawrence River and is icebound for many months of the year. After one round voyage, the Nema arrived back at Sorrel but was unable to load owing to a strike. The owners, who were permitted by the terms of the charter parties to take the Nema on one transatlantic voyage, took her to Spain.