About Arbitration

Arbitration is an alternative dispute resolution system to the judicial procedure in which an impartial third party, the arbitrator, resolves the dispute through a final award. The award is equivalent to a final court judgment.

The parties may agree that the arbitration is developed and resolved in law or in equity, for which they must first determine what type of arbitration is best identified with the matter and with the specific conflict they wish to resolve. The type of arbitration chosen does not affect the procedures of the procedure, but it does condition the way in which the arbitrator adopts his agreements and definitively resolves the controversy.

In the absence of agreement by the parties on the type of arbitration, it will always be legal because it is established by law.

Types of arbitration

Law arbitration

The arbitrator must resolve the conflict by reasoning his decision legally, strictly applying the legal rule applicable to the case. The award according to the law must always be legally motivated. This is the type of arbitration that is applied by default, that is, in the absence of another express agreement of the parties to the conflict. It is suitable for resolving disputes over the interpretation of contractual clauses and all other disputes relating to matters governed by imperative law.

Equity Arbitration

Equity is understood as “rectitude” and the “natural sense of fairness”. WIth inequity arbitration, the arbitrator resolves the conflict to the best of his knowledge and belief; according to their natural sense of fairness. This type of arbitration gives the arbitrator more room for maneuver since he can take into account circumstances that allow him to moderate the strict application of the legal rule. What the arbitrator seeks is to give the conflict the solution that is fairest for the specific case, taking into account its circumstances. This does not mean that the decision and award are arbitrary. The award must respect the legal system, the contracts signed by the parties and will always be reasoned and motivated.