Arbitration in Spain: Advantages, Market Position & Relationship to Ley Orgánica 1/2025

MASC and Ley Orgánica 1/2025

With the entry into force of Ley Orgánica 1/2025, the use of MASC (Mecanismos Adecuados de Solución de Controversias – Appropriate Dispute Resolution Mechanisms) becomes a mandatory preliminary step for civil and commercial court cases in Spain. However, this obligation explicitly does not apply to arbitration. Arbitration proceedings are not a “condition” under the law but an independent dispute resolution mechanism. This enhances their attractiveness: parties can initiate arbitration directly without a prior MASC, allowing them to reach a binding, internationally enforceable decision more quickly. At the same time, it remains possible to voluntarily use mediation or other MASC beforehand.

This creates a clear division of roles: while MASC is intended to relieve the state judiciary, arbitration positions itself as a flexible and efficient alternative, increasingly sought after in international business.

When and Why Arbitration is Advantageous

Arbitration is particularly beneficial in cross-border commercial matters: parties can choose procedural rules, language, and arbitrators; the proceedings remain confidential; and the arbitral award is generally easier to enforce worldwide than a court judgment, thanks to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. In Spain, Law 60/2003 on arbitration (largely based on the UNCITRAL model) provides a stable legal framework for both domestic and international proceedings seated in Spain.

Significance for the Spanish Market

In recent years, Madrid has established itself as a major arbitration center: it ranks among the “Top 10” preferred ICC arbitration locations, Spanish was the second most common language for ICC awards in 2023 (43 cases), and Spanish law was applied in 33 ICC cases. Spanish parties and arbitrators also rank highly in ICC statistics. This demonstrates that Madrid is not only a well-established arbitration venue but also has significant growth potential for Spain-related proceedings.

With the CIAM–CIAR alliance, Spain has an institutional arbitration system specifically geared toward Ibero-American cases (Spanish/Portuguese, regional proximity) while also operating internationally. The new CIAM-CIAR arbitration rules came into effect in 2024, and in 2025, integration with CAM Santiago was agreed upon—another step to expand reach in Latin America.

Implications and Conclusion

The new legal framework creates a dual system: while court proceedings must begin with a mandatory MASC, arbitration can be initiated directly, independently of Ley Orgánica 1/2025. For companies, this represents a clear strategic advantage: arbitration provides a fast, confidential, and internationally enforceable solution without going through mandatory preliminary procedures.

At the same time, flexibility is preserved: parties may voluntarily use mediation or other MASC to reduce costs or explore settlement opportunities. Overall, the reform strengthens the role of alternative dispute resolution within the state justice system while highlighting the independence and appeal of arbitration. For internationally active parties in Spain, this is a strong argument for proactively including arbitration clauses in contracts.

Do you have questions about arbitration law? Feel free to contact us!

Our lawyer in Barcelona, Ms. Jacqueline López Wismer, will be happy to advise you: Tel: +34 93 010 75 93, Email: jlopez@dauss.es, www.dauss.es

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