Arbitration – Arbitrators' jurisdiction to declare the unconstitutionality of laws. Second publication

The sole arbitrator appointed in re “T.T. vs. B.B. re arbitration” rendered a final decision declaring he had jurisdiction to declare the unconstitutionality of the laws and other regulations enacted as a consequence of Law No 25,561 on Public Emergency.

The conflict consisted in the currency and exchange rate at which an obligation arising from a purchase agreement executed in 2000, and originally agreed in US dollars, was due.

The arbitrator based his decision on the award rendered in re “CIE R P S.A. vs. Grinbank Daniel” by the Buenos Aires Stock Exchange Permanent Arbitral Panel.

The main argument supporting the decision is a general principle of arbitration and procedural law according to which arbitrators have the powers equals to those of Judges (other than coertio and executio) which arise from the arbitration agreement executed by the parties. The decision also makes reference to a principle accepted by the Federal Supreme Court of Justice under which every Argentine judge may review the validity of any regulation under the Federal Constitution.

The Buenos Aires Stock Exchange Permanent Arbitral Panel had rendered a similar decision in re “IGT Argentina S.A. vs. Trilenium S.A.” on November 5, 2002, and so did the Commercial Court of Appeals in re “Otondo César vs. Cortina Beruatto S.A.” (see “Arbitrators' jurisdiction to declare the unconstitutionality of laws”, in Marval News # 23 of November 28, 2003).