Supreme Court endorses arbitral jurisdiction

In a recent case (“BearService S.A. c. Cervecería Modelo S.A. de C.V.”; CSJN 2005/04/05; La Ley July 1, 2005) the Supreme Court of Argentina affirmed the Court of Appeals’ opinion which held that Argentine tribunals lack jurisdiction to decide commercial claims when there is an arbitration clause. The Court of Appeals had earlier reversed the decision of the trial court, where the defendant’s lack of jurisdiction defence, based on the existence of an arbitration agreement, was dismissed. The claimant attempted to bring its claim within its own insolvency proceeding, alleging that the arbitration clause was void because it was included in a pre-printed contract form and that under a strict interpretation of the arbitration clause the claim for indemnification, which arose after the contract was terminated, was not included.

The Supreme Court, adopting the findings of the Court of Appeals, affirmed that the wording of the arbitration clause was sufficiently ample to include all claims related to the contract, even if those claims referred to damages which occurred after the termination of the contract. The Supreme Court did not express its reasoning in dismissing the argument that the claimant allegedly lacked consent, and declared that the insolvency procedure under the Bankruptcy Law does not enjoin the arbitration procedure, especially if the insolvent debtor acts as claimant in the arbitration.

In conclusion the Supreme Court held that arbitrators may rule on their own jurisdiction, but this decision is subject to review by the courts in accordance with Article 16 of the UNCITRAL Model Law.