Argentine National Commercial Court of Appeals upholds the negative legal effect of arbitration agreement | Practical Law

Argentine National Commercial Court of Appeals upholds the negative legal effect of arbitration agreement | Practical Law

Francisco M. Gutiérrez (Partner) and Ignacio J. Minorini Lima (Senior Associate), M. & M. Bomchil

Argentine National Commercial Court of Appeals upholds the negative legal effect of arbitration agreement

Published on 01 Sep 2010Argentina
Francisco M. Gutiérrez (Partner) and Ignacio J. Minorini Lima (Senior Associate), M. & M. Bomchil
In a decision rendered on 7 May 2010 and published on 4 August 2010, the National Commercial Court of Appeals, chamber C, seated in the City of Buenos Aires, confirmed that a dispute covered by an arbitration agreement deprives the courts of jurisdiction over the matter, but that arbitration agreements must be construed restrictively.
In Medina Antonio c/ Pizza Rica S.A. y otro s/ ordinario, the plaintiff had filed with the court a breach of contract claim with respect to contractual provisions relating to the delivery of merchandise. The respondent objected to the court's jurisdiction based on the scope of the arbitration agreement contained within the contract. Called to decide on a summary basis, the court established the existence of an arbitration agreement and upheld the respondent's argument that the claim was covered by the agreement. Accordingly, the court summarily dismissed the claim, preventing the claimant from proceeding on the merits before the courts.
As a standard of interpretation when construing the scope of the arbitration agreement, the court applied the widely established principle held by Argentine courts (and subject to criticism by legal scholars) that arbitration agreements must be interpreted restrictively to the extent that arbitration constitutes an exception to the general rule which provides for access to the courts.
The court's approach to the case is relevant as it raises awareness of the importance of drafting arbitration clauses in the broadest terms whenever the parties' intention is to submit all contract-related disputes to arbitration. This would prevent, within the Argentine jurisdiction, the recalcitrant respondent from seeking to avoid arbitrating a given dispute by using the restrictive presumption towards arbitration agreements.