Energising the alternatives in dispute resolution – Stampa Abogados

The use of mediation may not be common in Spain but there is a steady trend among parties to explore new methods of resolving disputes



Los conflictos contractuales entre las partes están creciendo en España, pero la tradicional preferencia por los procesos judiciales está cediendo ante los métodos alternativos de resolución de conflictos, especialmente el arbitraje y la mediación, afirma Gonzalo Stampa, de Stampa Abogados.

Contractual disputes are on the rise among Spanish parties but a traditional preference for litigation is starting to give way to a rise in alternative dispute resolution, says Gonzalo Stampa, of Stampa Abogados in Madrid.

“We are seeing an increase in disputes particularly involving energy companies, for example, which are unable to connect to the national grid because of the failure of a contractor to finish project construction work on time.”

This is an issue of increasing importance in the renewable energy market because the Government is reducing the large subsidies, meaning there are significant financial risks if new projects are not finished before the relevant cut-off date.

“The ability of parties to obtain a quick resolution to their dispute and for it to be determined by experts with specific sector expertise, which arbitration offers, is therefore of significant importance,” says Stampa.

Spain experienced a boom in renewable energy during the mid-2000s on the back of very generous feed-in tariffs – the price paid to producers to supply power to the grid. This encouraged the launch of hundreds of new projects although, following the decision to cut tariffs, the market has been thrown into uncertainty. 

Stampa predicts that in the face of continuing issues in the sector, the number of disputes involving turnkey and Engineering, Procurement and Construction (EPC) contracts looks likely to increase. But he points out that some parties are looking beyond both litigation and arbitration, towards mediation.

“Mediation offers a means by which disputes may be resolved in a matter of weeks rather than months. But it can also be used to refine the issues in contention between parties. The process may still be new in Spain but it is an option that companies should increasingly consider, and the use of which will likely grow with the transposition of the EU Mediation Directive in the coming months.”