Spain: Madrid rises as an emerging arbitration hub

Madrid is consolidating its position as an international arbitration hub, driven by institutional advancements, technological innovation, strategic alliances, and new regulations that promote efficiency, diversity, and responsible use of artificial intelligence.

Arbitration in Madrid: progress and consolidation as an expanding arbitration venue

The steady progress of arbitration in Spain continues to consolidate due to a combination of key factors: the support of an increasingly professional arbitration community; the institutional strengthening of its courts and specialised centres; and a regulatory environment that accompanies – and in some cases anticipates – the transformations that are shaping the future of international arbitration. Added to this is the progressive incorporation of technological tools and a growing awareness of the challenges posed by artificial intelligence in the legal field.

In April 2025, the Spanish judicial system underwent a profound reform with the entry into force of Efficiency of the Public Justice Service Act, a reform that strongly promotes ‘appropriate means of dispute resolution’ (ADR). In this new framework, arbitration takes on a renewed prominence as an effective alternative to traditional court proceedings.

In this context, the 2025 edition of the survey conducted by the School of International Arbitration at Queen Mary University of London ranks Madrid among the most highly valued international arbitration seats. This marks a significant shift from the previous edition, published four years ago, where Madrid was recognised primarily as a preferred venue for specific regional markets such as Latin America. Now, for the first time, Spain breaks into the global top, closely following the leading international arbitration hubs – London, Paris, Singapore, New York, Geneva and Dubai. Madrid also shares the spotlight with other notable centres including Miami (3 per cent), Vienna (3 per cent), Frankfurt (3 per cent) and New Delhi (2 per cent), firmly establishing its position on the international arbitration map.

This is part of a broader trend: there are an increasing number of disputes with Spanish elements which, although still resolved abroad, could find a natural forum in venues such as Madrid. In this scenario, the challenge – and the opportunity – is to further equip national institutions with the tools, rules and skills necessary to compete at the highest level in an increasingly demanding and digitised global landscape.

Spanish arbitration institutional perspective: arbitration work groups, MIAC-CIAR alliance and arbitration rules

In recent times, Spanish arbitration courts have been striving to consolidate their standing and collaborate with one another, including forming cross-border partnerships, with the ultimate goal of establishing Madrid as a prominent forum for arbitration.

In this area, it is worth mentioning the Madrid International Arbitration Centre (MIAC), which is the result of the merger in 2020 of its founding courts for the administration of international arbitration: the Madrid Arbitration Court (CAM), the Civil and Commercial Arbitration Court of Madrid (CIMA) and the Spanish Court of Arbitration (CEA), with the Court of Arbitration of the Madrid Bar Association (ICAM) also joining as a strategic partner.

Thus, MIAC has positioned itself as the leading institution for the administration of international arbitrations seated in Madrid. Its exclusive mandate over this type of proceeding since 2020 has made it possible to centralise expertise and increase the international visibility of Spanish arbitration. It exclusively handles international disputes arising by direct designation of the arbitration agreement or by automatic referral from the individual founding courts in those cases where the arbitration clause is from 1 January 2020 onwards.

In this context, MIAC’s most recent statistics support this consolidation. They show the gradual growth of international disputes submitted to arbitration based in Madrid in recent years. Since MIAC was established in 2020, the number of international arbitrations received by MIAC to administer has increased every year, up to the point where now Madrid is one of the most frequently selected cities for arbitration.

According to its 2024 annual report, MIAC is managing 35 international arbitration cases,with a total of 53 arbitrations handled since its inception in 2020. The institution’s growth is reflected in a record-breaking year: 18 new cases in 2024, accounting for €128 million in disputed amounts. Regarding arbitrator composition in 2024, the Latin American region accounted for 36 per cent, an increase from 29 per cent the year before, while the proportion of Spanish arbitrators also rose to 36 per cent. In other words, more than 70 per cent of MIAC’s tribunal pool is Spanish or Latin American. In terms of gender diversity, 31 per cent of appointed arbitrators were women, a figure that increases to 75 per cent for arbitrators directly appointed by MIAC-CIAR (Ibero-American Arbitration Centre), demonstrating its commitment to gender parity.

Over the past years, CAM and CEA have continued to handle a significant number of domestic arbitrations. In 2024, CAM administered 98 arbitration cases and two emergency proceedings despite the referral of their international arbitrations to MIAC; additionally, there has also been a noticeable increase in the value of the administered cases.

In light of the above, it seems to be quite clear that arbitration in Spain is more than well established, growing and evolving. The number of both national and international arbitrations taking place in Madrid and being administered by Spanish arbitration courts is on the rise, with a majority of the participants being of Spanish or Latin American origin, but also including other nationalities and international disputes.

This growth can be attributed to the support of the Spanish courts in upholding the awards rendered, as well as the efforts of the Spanish arbitration community.

Arbitration work groups

One of the initiatives taken by MIAC is the creation of working groups composed of professionals and experts from various industry sectors, including: marine, construction and engineering, defence and security, digital economy, energy, tourism and hotels, loss adjusters and insurance, investment and states, banking and corporate. In a context where arbitration is increasingly required to respond to the specific needs of complex industries, MIAC has adopted a pioneering model of institutional specialisation through this approach.

The relevance of it was reflected in the III Annual Meeting of MIAC-CIAR Work Groups, held in May 2025 in Madrid. During the event, participants took part in roundtable discussions that addressed several key themes. These included the need to simplify procedures and reduce costs without compromising legal certainty, as well as the challenges posed by parallel proceedings, particularly in the context of cross-border contracts. Participants also explored the role of new technologies and artificial intelligence in the arbitration process, the importance of sector-specific procedural rules and tailored model clauses, and the promotion of Madrid as a preferred arbitration seat in international contracts involving Ibero-American parties.

As a result of the work groups’ efforts, there has been a documented rise in the number of arbitration agreements referencing MIAC-CIAR in standard contracts of major companies operating in Spain and Latin America. The groups’ recommendations have also influenced the development of the final report on the taxonomy of the most frequent insurance disputes referred to arbitration, which was released in January 2024. On this matter, the report addresses the common issues discussed in this sector, such as the subrogation of the insurers in the position of the insured when it comes to an arbitration clause agreed with a third party.

The study tends to promote this ADR process, particularly considering the complexity of the disputes, the confidentiality needed mainly in the reinsurance area and when it comes to the different legal systems and, therefore, disparity of resolutions to similar cases.

MIAC-CIAR alliance

In March 2024, MIAC signed a strategic alliance with the Ibero-American Arbitration Centre (CIAR) so that both arbitrators now act as one, being renamed as MIAC-CIAR.Through this alliance, CIAR integrates its activity into MIAC-CIAR, including its resources and the transfer of all its arbitration activity, with its main office in Madrid, while maintaining its respective offices in Costa Rica and São Paulo.

Additionally, in April 2025, the Centro de Arbitraje y Mediación de la Cámara de Santiago (CAM Santiago) officially joined MIAC-CIAR as a full member. Under the agreement signed on 2 April, all international arbitrations previously handled by CAM Santiago are now automatically referred to MIAC-CIAR. CAM Santiago also gained representation in MIAC-CIAR’s governance structure.

This alliance responds to the clear connection between Spain and Ibero America, due to their common language (second most used language, spoken by 800 million people), as well as to their similar law system. Likewise, this union is in line with the increasing number of disputes of this nature being submitted to arbitration, particularly because of the decision of the construction and renewable industries of these regions to submit their disputes to arbitration. Approximately 25 per cent of arbitrations involve Ibero-American parties, some of which are already being resolved in Madrid, as a venue that offers legal certainty and stability.

According to recent data, MIAC-CIAR has administered over 60 arbitration cases since its creation. The centre now ranks among the ten most frequently chosen ICC arbitration venues.

The focus of the Ibero-American arbitration community and, particularly, of MIAC-CIAR to support and grow these connections in these regions was reflected as well during the Open Week held in Madrid on 7–8 May 2025. This Madrid event attracted nearly 700 participants across 23 panels, supplemented by activities throughout the week. Bringing together commercial and investment arbitration professionals from around the world, it highlighted the city’s growing role as a global arbitration hub.

These events are a clear example of the expansion and scope of Madrid's arbitration capabilities to reach the rest of the world, especially Ibero-America.

All the above anticipates a potential increase in the number of arbitrations with Ibero-American parties and arbitrators in Madrid in the years to come.

MIAC-CIAR Arbitration Rules

The latest initiative taken by this arbitration court was the release in 2023 of its new Arbitration Rules, which entered into force on 1 January 2024, and which are known as the MIAC-CIAR Arbitration Rules, following the alliance.

These new Rules were presented in an exercise of transparency through a webinar by MIAC-CIAR on 4 July 2024, in which it was explained that they are the result of work from both sides of the Atlantic by the arbitration communities, with the aim of incorporating the best possible practices, particularly in the case of arbitrations with legal systems of Ibero-American origin and resulting in some even more modern Arbitration Rules.

Among the modifications adopted, there is a clear optimisation of what was perceived as excessive regulation of the arbitral procedure and which could, to some extent, limit the free autonomy of the parties in regulating the arbitral procedure. In this sense, certain articles on the instruction of the procedure have been removed from the body of the regulation and introduced in Annex III with a reference procedure, which also incorporates a reference to the IBA Rules on the representation of parties and a basic regulation of document production.

The new Rules also complement some of the industries that usually submit their disputes to arbitration. For example, as a result of the marine work shop proposal, a new type of procedure has been added, so that, together with the ordinary procedure, the abbreviated procedure for disputes of less than €1 million, there is a highly expedited procedure (article 54), which does not depend on the amount but on the express written request of both parties to resolve their dispute in this way in a very short period of time (approximately four months).

As mentioned, this new procedure responds to the needs of different industries, such as the transport industry, to see their disputes over contracts in international trade resolved without delay. To this end, a process is proposed in which, in parallel to the constitution of the arbitral tribunal, the parties submit their written statements. After the submission of the pleadings, the appointed arbitral tribunal has three months to issue an award and, with broad powers, a decision simply based on documentary evidence.

Further, in order to encourage those parties who are wary of arbitration due to the absence of a second instance, and following a process already provided for by some specific arbitration courts (eg, the Civil and Commercial Arbitration Court of Madrid), these new Arbitration Rules provide a new regulation of the optional challenge of the award (Annex IV), subject to the agreement of the parties before the acceptance of any arbitrator. In this way, the benefits that arbitration guarantees of confidentiality, speed and specialisation are preserved, but at the same time this optional challenge ensures the possibility of having two instances, with two arbitration tribunals reviewing the dispute.

This procedure is configured in such a way that, to avoid the annulment period of the Spanish Arbitration Law (article 41.4), the principal arbitral tribunal shall issue a draft of award, without signature and date. Subsequently, if this draft award is not challenged, it becomes definitive; however, if it is challenged through the ‘challenge tribunal’, an arbitral tribunal of three arbitrators appointed by MIAC-CIAR can (1) dismiss the challenge so that the definitive award would be signed and dated by the principal arbitral tribunal or (2) admit in full or in part the challenge and issue the challenge award.

The purpose of this possibility to challenge the award is so that an arbitral tribunal can review possible manifest errors in the assessment of the evidence or in the applicable law, although the court of appeal cannot order the taking of new evidence as it is limited to assessing the previous evidence. All of this, moreover, takes place within a short period of time.

In this respect, as the issue of time is key in arbitration, the new Rules have tried to avoid any potential delays. Among other modifications in this respect, we can address the new regulation for setting up the arbitration tribunal, particularly during the process of designating and appointing arbitrators (Annex I), for example, when it comes to the time period for allegations of the parties when an arbitrator is appointed with respect to the conflict of interests, the requested independence or impartiality. In this regard, it should be noted that according to MIAC-CIAR statistics for 2023, the total duration of its proceedings has been one year and three months.

Further, although in practice it was already adopted, and specifically contemplated in the case of witnesses that they could appear ‘through any means of communication that makes their presence unnecessary’ (previously article 32, now Annex IV), following the technological advances, the new Rules have expressly established the possibility for parties to appear ‘telematically’ (ie, remotely) and that hearings, if held in person, may take place at any location other than the seat of arbitration.

Finally, the new Rules (Annex II) establish that, from the start of the arbitration, a fixed cost of the arbitration procedure will be confirmed to the parties. However, MIAC-CIAR reserves the possibility of increasing or reducing the arbitrators' fees by 30 per cent, depending on the complexity of the case or the arbitrators' compliance with their functions (such as issuing an award within the stipulated time). Similarly, the ‘cost calculator’ available to the court has been unified, equalising the scale for the three procedures, in order to simplify these procedures, and bearing in mind the guidelines for the quantification of claims also available to the court.

Litigation financing: prospects in arbitration

In recent years, litigation financing has gained traction as an innovative and strategic solution in the legal field. In the context of international arbitration, it is increasingly common for one of the parties to have third party funding. This mechanism allows a third party outside the proceedings, usually an investment fund, to assume the costs of the litigation or arbitration in exchange for a share in any favourable economic outcome.

This financing mechanism is accessible to both plaintiffs and defendants and, unlike traditional financing schemes, in this model the client does not assume any obligation to repay if the proceedings are unsuccessful.

Although Spain has yet to adopt specific regulation for the financing of arbitration, the number of third-party funding (TPF) gained ground in litigation, particularly through claims for the annulment of swaps against large banks and is now gaining momentum with the preparations for the transposition of Directive 2020/1828 of the European Parliament and of the Council, adopted on 25 November 2020, on representative actions for the protection of the collective interests of consumers, which specifically provides for third-party funding (article 10).

The Directive introduces limits and safeguards mainly around three points: (1) avoiding conflicts of interest; (2) judicial control – imposing on financing entities the obligation to provide financial sources to the court; and (3) consumer protection.

In Spain, the draft bill approved on 25 February 2025, which transposes this Directive, expressly recognises the possibility that collective actions, especially those seeking compensation, may be financed by third parties, such as specialised funds or private entities. However, it incorporates a judicial control mechanism to ensure that such financing does not compromise the collective interests of consumers. In particular, during the certification phase of the collective action, the court must assess whether external financing raises potential conflicts of interest.

This new legal framework could, in the medium term, constitute a starting point for the development of specific regulations on TPF in the field of arbitration in Spain. Although arbitration has particular characteristics compared to court proceedings, conflicts of interest arising from such financing could be controlled through internal mechanisms, such as disclosure requirements in line with the IBA Guidelines on Conflicts of Interest revised in 2024. Overall, the regulatory framework emerging around class actions provides a useful basis for reflection on how to adapt these principles to arbitration in Spain.

In this context, it should be noted that efforts to mitigate the financial burden of resorting to arbitration have favoured the use of mechanisms such as ‘security for costs’. This figure is essentially a precautionary measure whereby arbitrators may order one of the parties (usually the claimant) to secure the possible award of costs in the event that they lose the arbitration.This mechanism is particularly relevant when the claimant is financed by a third party, as this may raise reasonable doubts as to its solvency and ability to meet the costs of the proceedings in the event of defeat.

Given the inherent flexibility of arbitration, it is foreseeable that recourse to this precautionary measure will become increasingly widespread. In fact, regulations such as article 37 of the CIAM-CIAR Rules or article 28 of the ICC Rules provide broad normative bases that allow the arbitral tribunal to adopt such measures depending on the circumstances of the case.

However, it is clear that their imposition cannot become an unjustified obstacle to access to arbitral justice. The tribunal must therefore carefully assess their appropriateness, weighing both the need to protect the respondent and the claimant's right to assert its claim without disproportionate obstacles. The challenge, in short, lies in striking a balance between promoting access to arbitral justice and protecting the rights of the parties against risks arising from third-party funding.

Artificial intelligence: from emerging trend to maturing practice

Although it may sound like a tired slogan, the impact of artificial intelligence (AI) on international arbitration is no longer just a promise; it is becoming a concrete reality. However, alongside the enthusiasm for innovation, several legitimate concerns are emerging, particularly around fairness, transparency and confidentiality. Institutions and regulators are beginning to reflect these concerns in early guidelines and initial steps toward concrete regulation of the use of AI in arbitration.

Studies published in 2025 reveal compelling data on the penetration of artificial intelligence in international arbitration. The survey conducted by the School of International Arbitrationat Queen Mary University of London updated in 2025, following its previous edition in 2021, has confirmed a clear trend: the use of AI in arbitration has not only intensified but is rapidly expanding. According to the data collected in the survey, although many professionals have not yet integrated it into their practice, the majority expect to do so within the next five years, at least, which points to a widespread transformation in the way arbitration is conducted.

The survey also reveals why artificial intelligence is becoming a strategic ally in arbitration: the main users highlight its ability to save time (54 per cent) and reduce costs (44 per cent), but they also emphasise an increasingly valued benefit: minimising human error (39 per cent), which seems to have a particular impact on repetitive or document-intensive tasks.

According to the study, the most common use to date has been the search for factual and legal information – as stated by 64 per cent of voters – but the forecast for the future is even more resounding: 91 per cent of respondents plan to use AI for these arbitration-related tasks in the short to medium term. The underlying message is clear: artificial intelligence is no longer an option and is emerging as an almost inevitable tool in contemporary arbitration.

In response to this development, the Chartered Institute of Arbitrators (CIArb) published its ‘Guide on the Use of Artificial Intelligence in Arbitration’ in March 2025, a pioneering initiative to regulate the use of AI tools in arbitration proceedings. The guide highlights the benefits that these technologies can bring to arbitration, such as greater efficiency in case management, automation of document review and support in legal research tasks. However, it also warns of significant risks, including algorithmic bias, cybersecurity vulnerabilities and potential threats to the impartiality of the process.

The document defines key concepts such as ‘AI tool’, ‘GenAI tool’ (deep-learning models capable of generating narrative text) and ‘hallucination’ (erroneous or misleading content generated by AI systems), among other terms that are increasingly present in our daily lives.

In addition to identifying opportunities and risks, the CIArb expressly encourages reasonable research into any AI tool that is intended to be used in arbitration proceedings and a review of any legal, regulatory or procedural rules relating to the use of AI in the relevant jurisdiction.

Another key aspect introduced by the guide is the need for the arbitrator to review, at the outset of the proceedings, the existence of clauses relating to the use of artificial intelligence. In particular, it states that, upon receiving the request for arbitration, the tribunal should verify whether the parties have expressly addressed the use of AI tools in their arbitration agreement and, if so, how they have done so. Conversely, in cases where nothing has been provided for in the agreement, the arbitrator is given the power to ask the parties to comment on the matter.

The arbitrator’s power to actively supervise the use of artificial intelligence tools in the arbitration proceedings is not limited to the beginning of the proceedings but extends throughout their duration and to all participants (whether parties or not). In this regard, Recommendation 7.3 of the Guide provides that, unless expressly agreed otherwise by the parties and after consultation with them, the arbitral tribunal may impose disclosure obligations relating to the use of AI tools on the parties themselves and on the witnesses and experts appointed by them.

To bring all this down to earth, the Guide even offers a model clause for incorporation into arbitration agreements (Appendix A) and a model procedural order (Appendix B) to assist both parties and arbitral tribunals in managing the use of AI in a transparent and responsible manner.

In parallel, the European Union has continued to lead the way in AI governance. Following its publication in July 2024, the AI Act has been entering into force in stages throughout 2025. On 2 February, two key measures began to apply: the prohibition of AI systems posing an unacceptable risk (such as real-time biometric surveillance or social scoring). Later, in May 2025, nine months after the law came into force, the Codes of Good Practice began to apply, and from August 2025, new obligations on governance, transparency and compliance monitoring apply to these systems.

Similarly, in 2025, the European Union decided to implement the ‘Action Plan for AI in Europe’, reinforcing its commitment to safe and ethical technological development.This roadmap reinforces the context in which both the AI Act and sectoral guidelines, such as those of the CIArb in the field of arbitration, are set, by setting a clear direction towards the promotion and integration of AI in all areas of our lives.

As expected, all these developments at the European level are having a direct impact on the national regulatory framework. In August 2024, Spain launched its updated National Artificial Intelligence Strategy 2024, a plan to be implemented between 2024 and 2025, backed by significant funding. Its main objective is to promote the adoption of artificial intelligence in both the public and private sectors, while encouraging greater use of computational resources by Spanish industries, particularly in strategic areas such as administration, health, energy and justice.

In view of the above, it is perfectly reasonable to expect Spanish arbitral institutions to follow the path set out by the CIArb, incorporating guidelines similar to those contained in its 2025 Guide. This adaptation could take the form of specific protocols, the publication of best practices, or even the imposition of disclosure obligations on the parties regarding the use of AI systems, as well as the attribution of powers to arbitrators to supervise and control their use. All of this would be backed by an increasingly defined and demanding regulatory framework, both at the European and national levels, which would strengthen the necessary foundations for preserving the legitimacy, transparency and competitiveness of Spanish arbitration, both internationally and domestically.

Published in: Global Arbitration Review