Hotel Granollers, S.L. v. Natire, S.L.

At a glance

Parties

Hotel Granollers, S.L. (applicant for annulment; respondent in the arbitration) v. Natire, S.L. (claimant in the arbitration)

Case no.

Arbitraje No. 6/18; Judgment No. 85/2018; ROJ STSJ CAT 9712/2018

Court

Tribunal Superior de Justicia de Cataluña, Civil and Criminal Chamber, Section 1 (Barcelona)

Underlying award(s)

Equity award of 3 February 2018 by a sole arbitrator (named only as Ms. Violeta) appointed by the Court

Forum and rules

Annulment action under Article 41 of the Spanish Arbitration Act 60/2003

Treaty

Arbitration clause in Article 16 of the company's by-laws (equity arbitration)

Tribunal

José Francisco Valls Gombau (Presiding), María Eugènia Alegret Burgués (Rapporteur), Jordi Seguí Puntas

Sector

Hotels; company law

Outcome

Annulment application dismissed in full (29 October 2018); no appeal available.

Amount

Costs of the annulment proceeding imposed on Hotel Granollers, S.L.

The dispute

Natire, S.L. owned 50% of Hotel Granollers, S.L. The other 50% partner was in persistent disagreement with Natire, and this deadlocked the company's organs. Natire started equity arbitration under Article 16 of the company's by-laws. It asked for the company to be dissolved and liquidated, for the current administrators to be removed and for a liquidator to be appointed. The sole arbitrator granted the claim in an award of 3 February 2018. Hotel Granollers applied to the High Court of Justice of Catalonia to annul the award on six grounds: company dissolution could not be decided in equity arbitration; the award gave no reasons; the award went beyond the arbitration clause; the statutory and by-law procedures for dissolution had been ignored; the award disregarded mandatory rules on who acts as liquidator; and its right to a fair hearing had been breached because witnesses spoke to each other during the hearing. It relied on Article 41.1 and mainly on public policy under Article 41.1(f) of the Arbitration Act.

Key holdings

1. Company matters are arbitrable under Article 11 bis of the Arbitration Act. The law does not limit equity arbitration to matters free of mandatory rules. The only special rule for company matters is that challenges to corporate resolutions must be administered by arbitral institutions (Article 11 bis 3). An equity award could still be annulled under Article 41.1(f) if it disregarded rules that are part of company-law public policy. Third legal ground, pp. 5–6
2. The award was sufficiently reasoned, as Article 37.4 requires. It explained both arbitrability and the equity question (¶¶ 15–26). The arbitrator did not regulate the liquidation. She only decided that one liquidator, appointed by the Commercial Court, would act. Removing the administrators and appointing a liquidator follow by law from dissolution (Articles 371 and 374 of the Capital Companies Act, LSC). Reasons that dissatisfy a party are not a lack of reasons. Fourth legal ground, p. 6
3. The award did not exceed the arbitration clause (in substance a ground under Article 41.1(c)). The by-law clause, apparently introduced in 1995, carves out cases where the law sets special mandatory procedures. That carve-out cannot have referred to the 2015 voluntary-jurisdiction procedure, which is neither special nor mandatory. It is better explained by the view at the time that challenges to corporate resolutions could not be arbitrated. The clause did not exclude dissolution. Fifth legal ground, pp. 7–8
4. Company-law public policy was not breached. A general meeting on dissolution was held on 9 November 2016 and failed because of the deadlock. The applicant also did not identify any fundamental principle that had been infringed. The applicant argued that Article 376 LSC required the administrators to become liquidators. The Court held that this rule is not clearly mandatory, and that it would be illogical to make the deadlocked partners the liquidators. Sixth and Seventh legal grounds, pp. 8–9
5. No breach of the right to a fair hearing. The Civil Procedure Act (including Article 366.2) does not govern arbitration; Articles 24 and 25 of the Arbitration Act do. The applicant showed no real loss of its ability to defend itself (indefensión). The objection was not raised before the arbitrator (Article 6). The award rested mainly on documentary evidence. Eighth legal ground, pp. 9–10
6. Annulment application dismissed, with costs against the applicant (Article 394 of the Civil Procedure Act). No appeal lies against the judgment. Operative part, p. 10

Procedural history

1. 9 November 2016A general meeting of the partners is held on dissolution; no resolution is adopted because of the deadlock.
2. 3 February 2018The sole arbitrator issues the equity award: Hotel Granollers is dissolved, its administrators are removed and a liquidator is to be appointed by the Commercial Court.
3. 1 June 2018Hotel Granollers files the annulment application with the High Court of Justice of Catalonia.
4. 12 June 2018The application is admitted; Natire files its answer on 13 July 2018.
5. 13 September 2018Order on the admission of evidence; deliberation is set for 18 October 2018.
6. 29 October 2018Judgment No. 85/2018 dismisses the annulment application with costs.

Tribunal, counsel and experts

Decided by

• José Francisco Valls Gombau President, Tribunal Superior de Justicia de Cataluña
• María Eugenia Alegret Burgués Judge, Tribunal Superior de Justicia de Cataluña (rapporteur)
• Jordi Seguí Puntas Judge, Tribunal Superior de Justicia de Cataluña

For the claimant

Camil Raich Puyol · Angela Palau Fau

For the respondent

Josep de Cabo Guitart · Jaime-Luis Aso Roca

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Keywords

• annulment
• set-aside
• equity arbitration
• arbitrability
• company dissolution
• corporate deadlock
• liquidator
• public policy
• company-law public policy
• statutory arbitration clause
• Spanish Arbitration Act
• Article 41.1(f)
• duty to give reasons
• excess of mandate
• right to a fair hearing
• hotel

Summary generated with AI from the published documents — refer to the award for the authoritative text.