Substitution of Arbitrators under Spanish Arbitration Law

Under Spanish arbitration law, substitution of an arbitrator is governed principally by Articles 17–20 of Law 60/2003 of 23 December on Arbitration (Ley de Arbitraje). The central provision is Article 20, which establishes a flexible but important rule: whatever the reason for replacing an arbitrator, the substitute must ordinarily be appointed according to the same rules that governed the appointment of the arbitrator being replaced. After replacement, the tribunal must hear the parties and determine whether previously conducted proceedings should be repeated.

The Spanish system therefore seeks to balance three objectives:

1. continuity and efficiency of the arbitration;
2. preservation of party autonomy in constituting the tribunal; and
3. protection of independence, impartiality and procedural fairness.

1. Statutory framework

Article 20 of the Spanish Arbitration Act

Article 20(1) provides, in substance, that regardless of the reason requiring appointment of a new arbitrator, the appointment shall be made according to the rules governing the appointment of the arbitrator being replaced. Article 20(2) then provides that, once the replacement has been appointed, the arbitrators, after hearing the parties, decide whether previously conducted proceedings should be repeated.

This is significant because Spanish law does not prescribe a single universal replacement mechanism. Instead, it preserves the appointment mechanism originally selected by the parties.

For example:

• if Party A originally appointed an arbitrator, Party A will ordinarily participate in appointing the substitute;
• if an arbitral institution appointed the arbitrator, the institutional appointment mechanism normally governs the replacement;
• if the competent court made the original appointment because the agreed procedure had failed, the court may again be required to intervene;
• if the tribunal's constitution has become defective, Article 15 may become relevant to restore a valid composition.

2. When does substitution arise?

Substitution is broader than removal for misconduct. Article 20 deliberately uses the expression “whatever the cause”. Consequently, substitution may become necessary following:

• resignation;
• death;
• illness or incapacity;
• legal or factual inability to perform the office;
• prolonged failure to perform functions;
• successful challenge or recusal;
• agreed removal;
• judicial removal;
• loss of a required qualification;
• circumstances affecting independence or impartiality;
• failure to accept the appointment; or
• other circumstances making continuation impossible.

The Spanish statutory structure separates the reason for cessation from the mechanism of replacement.

Thus:

Article 19 primarily explains when an arbitrator ceases to hold office; Article 20 explains how the resulting vacancy is filled.

Article 19 provides that where an arbitrator is factually or legally prevented from performing his or her functions, or otherwise fails to perform them within a reasonable time, the arbitrator ceases office by resignation or agreed removal. If the parties disagree about removal, the statute establishes a mechanism involving the other arbitrators or, where necessary, the competent court.

3. Resignation of an arbitrator

An arbitrator may resign where continuation becomes impossible or inappropriate.

Importantly, resignation does not itself constitute an admission that a challenge or removal ground was legally established. Article 19(2) expressly protects this position: resignation or acceptance by a party of an arbitrator's cessation does not amount to recognition that the alleged ground for cessation was legally justified.

This is practically important because an arbitrator may step down to preserve the integrity and efficiency of the proceedings without conceding:

• bias;
• conflict of interest;
• incapacity;
• procedural misconduct; or
• any other allegation.

Once the resignation creates a vacancy, Article 20 takes over.

4. Substitution following recusal

Recusal is closely connected with substitution but should not be confused with it.

Article 17 establishes that every arbitrator must remain independent and impartial throughout the arbitration. The arbitrator must disclose circumstances that could generate justified doubts concerning independence or impartiality. An arbitrator may be challenged where such circumstances exist or where the arbitrator lacks qualifications agreed by the parties.

Article 18 establishes the challenge procedure. The parties may agree upon the procedure; otherwise, the challenge must ordinarily be raised within 15 days after knowledge of the relevant circumstance. Unless the challenged arbitrator resigns or the other party accepts the challenge, the arbitrators decide the challenge.

If the challenge succeeds and the arbitrator leaves the tribunal, Article 20 requires appointment of the substitute according to the original appointment mechanism.

Practical consequence

A successful challenge therefore normally produces two separate legal questions:

Question 1: Was the arbitrator properly removed?

Question 2: Who has authority to appoint the replacement?

The second question is not automatically answered by the first. Article 20 directs attention back to the appointment mechanism originally applicable to the departing arbitrator.

5. Party autonomy and substitution

Party autonomy is fundamental.

Article 15 permits parties to agree freely upon the procedure for appointing arbitrators, provided that the principle of equality is not violated. If the agreed procedure fails, the competent court can intervene.

Consequently, a carefully drafted arbitration clause or institutional rule can significantly affect substitution.

For example:

Original clause:
“Each party shall appoint one arbitrator and those arbitrators shall appoint the chair.”

If one party-appointed arbitrator resigns, the replacement should ordinarily be made through the mechanism governing that original appointment.

Conversely, if the parties agreed that all arbitrators would be appointed by an institution, the institution's appointment procedure ordinarily governs substitution.

The purpose is to prevent one party from gaining a new appointment advantage merely because an arbitrator has left.

6. Equality of appointment is particularly important

Article 15 expressly conditions party autonomy on the principle of equality.

This becomes especially important after substitution.

Suppose a three-member tribunal originally consisted of:

• Arbitrator A — appointed by claimant;
• Arbitrator B — appointed by respondent;
• Arbitrator C — jointly appointed chair.

If Arbitrator A resigns, it would ordinarily be inconsistent with the architecture of the arbitration for the respondent or the chair unilaterally to appoint A's replacement unless the parties' agreement or applicable institutional rules provide otherwise.

The replacement should preserve the same allocation of appointment authority.

This is also important in multiparty arbitration. Article 15 addresses situations involving multiple claimants or respondents and provides mechanisms intended to preserve equality when parties cannot agree on their respective nominee.

7. What happens to hearings already conducted?

This is one of the most important features of Spanish law.

Replacement does not automatically require the arbitration to start again.

Article 20(2) requires the arbitrators, after hearing the parties, to decide whether previously conducted proceedings should be repeated.

This gives the tribunal considerable procedural flexibility.

Factors relevant to the decision may include:

• how far the arbitration has progressed;
• whether pleadings have closed;
• whether witnesses have already testified;
• whether expert evidence has been completed;
• whether the departing arbitrator participated in evidentiary hearings;
• whether the replacement arbitrator has reviewed the record;
• whether credibility assessments are involved;
• whether the parties agree on continuation;
• whether repeating the proceedings would cause disproportionate delay or expense; and
• whether continuation would compromise the parties' right to a fair hearing.

8. Hearing evidence creates a special problem

Replacement becomes particularly sensitive after witness hearings.

Suppose the original tribunal has heard:

• five fact witnesses;
• three experts;
• extensive oral submissions.

The arbitrator then resigns.

The replacement arbitrator has not personally observed those witnesses. The tribunal must therefore consider whether simply providing transcripts or recordings is sufficient.

Article 20 does not create an automatic rule requiring rehearing. Instead, it requires the tribunal to hear the parties and decide whether repetition is appropriate.

The more important credibility assessment was to the original tribunal, the stronger the argument may become for repeating some evidence.

Conversely, where the dispute turns primarily on documents or technical calculations, repetition may be unnecessary.

9. Substitution and procedural fairness

The decision under Article 20 should not be treated as a purely administrative matter.

Article 24 of the Arbitration Act requires equal treatment of the parties and a full opportunity for each party to present its case. Therefore, the decision whether to repeat earlier proceedings must be compatible with procedural equality.

A tribunal should therefore ordinarily consider submissions from both sides before deciding:

• what must be repeated;
• what may remain on the record;
• what additional opportunity should be given to the replacement arbitrator;
• whether additional questioning is necessary; and
• whether procedural deadlines must be adjusted.

This is particularly important where the replacement occurs late in the arbitration.

10. Consequences of defective substitution

Defective substitution can potentially affect the validity of the eventual award.

Article 41 of the Arbitration Act provides grounds for annulment, including circumstances concerning procedural rules, composition of the tribunal and public policy. The precise ground depends upon the nature of the defect.

A tribunal constituted differently from the constitution required by the arbitration agreement can therefore create serious enforcement and annulment risks.

Spanish jurisprudence has repeatedly treated the composition of the arbitral tribunal as a matter of considerable legal importance.

11. Case Law

Case 1 — STC 9/2005, 17 January 2005 — Metalibérica v Traser

The Spanish Constitutional Court's STC 9/2005 is an important authority concerning arbitrator impartiality.

The case involved allegations concerning the impartiality of an arbitrator and the rejection of a challenge. The Constitutional Court recognised that parties to arbitration possess a right to the impartiality of the arbitrator and protection against procedural indefension. However, those rights operate principally within the statutory arbitration framework and are ordinarily protected through the action for annulment rather than by treating the arbitral proceeding itself as ordinary judicial proceedings.

Relevance to substitution

The case establishes the underlying principle that where an arbitrator's neutrality is compromised, the statutory mechanisms for challenge and, ultimately, substitution are important safeguards of the integrity of arbitration.

Principle: arbitrator impartiality is an essential characteristic of valid arbitration.

Case 2 — STSJ Madrid, Civil and Criminal Chamber, Judgment 70/2016, 4 November 2016

The Madrid High Court has repeatedly emphasised the continuing nature of the obligation of independence and impartiality.

The court explained that Article 17.1 requires the arbitrator to remain independent and impartial not merely at appointment but throughout the arbitration. Relationships arising during the proceedings may therefore generate grounds for challenge and potentially substitution.

Relevance

This is especially important for substitution because the need to replace an arbitrator may arise after the tribunal has already been constituted.

Principle: independence is a continuing obligation, and newly arising circumstances can justify intervention even where the original appointment was unobjectionable.

Case 3 — STSJ Madrid, Judgment 61/2015

This line of Madrid jurisprudence emphasises the importance of the arbitrator's duty of disclosure.

The failure to disclose a circumstance capable of generating justified doubts about impartiality can become relevant to annulment proceedings. Later Madrid jurisprudence has relied on this approach when examining the consequences of non-disclosure and possible bias.

Relevance to substitution

A newly discovered undisclosed relationship may produce the following chain:

non-disclosure → justified doubts → challenge → removal → substitution under Article 20.

Thus substitution can be the procedural consequence of an independence problem rather than merely an administrative vacancy.

Case 4 — STSJ Madrid, Judgment 63/2021, 13 October 2021

In this case, the Madrid High Court considered allegations concerning the lack of neutrality and independence of an arbitrator.

The court reaffirmed that an annulment action is not an appeal on the merits. Judicial intervention is limited to the statutory grounds of Article 41.

Relevance

For substitution disputes, this means that a dissatisfied party cannot ordinarily transform disagreement with an arbitrator's reasoning into a demand for removal.

There must be a legally cognisable ground, such as:

• lack of independence;
• lack of impartiality;
• failure to meet agreed qualifications;
• inability to perform the functions; or
• another recognised basis for cessation.

Principle: substitution is not a mechanism for obtaining a preferred arbitrator.

Case 5 — STSJ Madrid, Judgment 31/2021, 21 May 2021

The Madrid High Court examined allegations of arbitrator partiality and emphasised the statutory requirements of Article 17.

The court noted that Article 17 requires arbitrators to be independent and impartial and requires disclosure of circumstances capable of creating justified doubts. It nevertheless rejected allegations that were insufficiently substantiated and emphasised that merely losing a case or disagreeing with an award does not demonstrate partiality.

Relevance

The case is important because substitution cannot be used strategically simply because a party dislikes the arbitrator's procedural or substantive decisions.

There must be an objectively supportable basis for challenging the arbitrator.

Principle: allegations of bias must have a genuine evidentiary foundation.

Case 6 — STSJ Madrid, Judgment 28/2023, 18 July 2023

The Madrid High Court described arbitrator impartiality as a fundamental guarantee of arbitration and connected it directly with Article 17 of the Arbitration Act.

The court distinguished genuine questions of neutrality from complaints concerning the arbitrator's evaluation of evidence or legal conclusions.

Relevance

This distinction matters when considering substitution:

An arbitrator should be replaced because of a genuine independence/impartiality problem—not because a party believes the arbitrator is deciding the case incorrectly.

The case therefore reinforces the exceptional nature of arbitrator replacement.

Case 7 — STSJ Madrid, Judgment 14/2016, 8 February 2016

This decision is particularly useful concerning tribunal composition.

The court relied on earlier Supreme Court jurisprudence concerning the requirement for a legally valid number of arbitrators and stressed that the tribunal must be constituted in accordance with mandatory legal requirements and the parties' agreement.

The court referred to the Supreme Court's earlier decision of 13 July 1982, where a tribunal originally composed of three arbitrators was reduced to two following the resignation of one arbitrator. The Supreme Court treated the resulting composition as legally defective.

Relevance

This is a foundational lesson:

A tribunal cannot simply continue with an altered composition when the resulting composition violates mandatory legal or contractual requirements.

A valid substitute may therefore be essential before the tribunal can lawfully continue.

12. Supreme Court, 13 July 1982

Although this decision predates Law 60/2003, it remains historically important for understanding the principle underlying substitution.

The Supreme Court held that where arbitration required a tribunal of three arbitrators, the resignation of one arbitrator could not simply leave the remaining two to constitute the tribunal for purposes of issuing the award.

The court stressed the need for participation of the legally required members, including those appointed to replace a departing arbitrator.

Modern significance

The case supports the proposition that:

The departure of an arbitrator does not automatically confer authority on the remaining arbitrators to issue an award as though the original tribunal remained intact.

This is consistent with the modern Article 20 framework.

13. STSJ Madrid, Judgment 23/2019, 28 June 2019

The Madrid High Court has also treated proper constitution of the arbitral tribunal as an issue capable of being examined even in relation to the validity of an award.

The court considered whether the tribunal had been correctly constituted and stressed that tribunal composition may involve questions of public policy and mandatory statutory requirements.

Relevance

If an arbitrator leaves and is not properly replaced, the resulting award may be vulnerable to annulment.

This is why Article 20 should be understood not simply as an administrative replacement mechanism but as part of the statutory safeguards concerning the legitimate composition of the tribunal.

14. Substitution following failure to perform functions

Article 19 expressly addresses situations where an arbitrator is unable to perform functions or fails to perform them within a reasonable period.

Examples might include:

• persistent failure to attend deliberations;
• inability to participate because of serious illness;
• prolonged unexplained inactivity;
• legal incapacity;
• inability to perform essential procedural duties.

Where the parties agree on removal, the process is comparatively straightforward.

Where they disagree, Article 19 establishes different routes depending on whether the arbitration involves multiple arbitrators.

In a multi-arbitrator tribunal, the other arbitrators may decide the issue. If they cannot reach a decision, the matter may proceed before the competent court.

15. Court intervention

Spanish law favours minimal judicial intervention, but courts have an important supporting function when the agreed appointment mechanism fails.

Article 15 allows the competent court to appoint arbitrators or take necessary measures where the agreed appointment process cannot operate.

Accordingly, there is a hierarchy:

Party agreement

↓

Institutional / contractual appointment procedure

↓

Remaining arbitrators, where authorised

↓

Competent Spanish court, where statutory conditions for intervention are met

This structure protects arbitration from paralysis.

16. Institutional arbitration

In an institutional arbitration seated in Spain, the institution's rules are particularly important.

For example, institutional rules may specify:

• when substitution occurs;
• who appoints the substitute;
• whether the original appointing party receives another opportunity to nominate;
• what happens if that party fails to nominate;
• whether the proceedings resume from the point of departure;
• whether hearings must be repeated;
• whether the institution can dispense with replacement in exceptional circumstances.

The Court of Arbitration of Madrid, for example, expressly provides that a substitute is appointed according to the rules governing appointment of the arbitrator being replaced, while also regulating continuation of proceedings after substitution.

Thus, Article 20 functions together with institutional rules rather than operating in isolation.

17. Substitution versus removal

The distinction can be summarised as follows:

18. Does substitution restart the arbitration?

No.

This is one of the most important practical consequences of Article 20.

Replacement does not automatically invalidate:

• the request for arbitration;
• pleadings;
• procedural orders;
• documentary evidence;
• expert reports;
• witness statements;
• procedural hearings.

Instead, the tribunal determines whether particular acts need to be repeated after hearing the parties.

The objective is therefore procedural continuity without sacrificing fairness.

19. Can the substitute simply rely on the existing record?

Generally, the substitute should have adequate opportunity to understand the entire procedural record.

The precise treatment will depend upon:

• the Arbitration Act;
• the arbitration agreement;
• institutional rules;
• procedural orders;
• the stage of proceedings;
• the nature of the evidence; and
• the parties' submissions.

If credibility determinations are central, a substitute arbitrator may need to consider whether witness evidence should be reheard.

If the dispute is overwhelmingly documentary, repetition may be unnecessary.

20. Effect on the arbitral timetable

Substitution does not necessarily suspend the arbitration indefinitely.

The tribunal and institution should normally assess:

1. the date on which the vacancy arose;
2. the appointment mechanism;
3. the time required to appoint the substitute;
4. the procedural stage;
5. whether deadlines need modification;
6. whether hearings must be repeated; and
7. whether the award timetable needs adjustment.

A tribunal should avoid allowing substitution to become a mechanism for procedural abuse or deliberate delay.

21. Important limitation: replacement cannot cure every defect

Substitution may correct a defective tribunal going forward, but it does not automatically cure all earlier procedural irregularities.

For example, suppose an arbitrator had a serious undisclosed conflict and participated in:

• the examination of witnesses;
• evidentiary rulings;
• interim decisions; and
• deliberations.

Replacing that arbitrator does not necessarily answer whether those earlier acts should remain valid.

That is precisely why Article 20(2) requires consideration of whether earlier proceedings should be repeated.

22. Relationship with annulment

A defective replacement can ultimately create an Article 41 problem.

Article 41 provides a limited system of annulment rather than a general appeal. Spanish courts repeatedly emphasise that they do not ordinarily re-decide the merits of an arbitration.

But constitution of the tribunal, procedural fairness and arbitrator impartiality can be legally significant.

The sequence can therefore be:

Arbitrator becomes unavailable

→ Article 19 cessation

→ Article 20 replacement

→ parties heard concerning previous proceedings

→ arbitration continues

→ award

→ potentially Article 41 annulment proceedings if a serious defect occurred.

23. Practical example

Assume a Spanish-seated three-member arbitration:

• Claimant appoints A;
• Respondent appoints B;
• A and B appoint C as chair.

After the evidentiary hearing, A develops a conflict of interest and resigns.

Step 1

A ceases to serve.

Step 2

Article 20 applies.

Step 3

The substitute should ordinarily be appointed according to the procedure by which A was appointed.

Step 4

The new arbitrator joins the tribunal.

Step 5

The parties are heard concerning proceedings already conducted.

Step 6

The tribunal determines whether:

• all hearings must be repeated;
• only particular witness testimony must be repeated;
• additional submissions should be permitted; or
• the existing record can be retained.

Step 7

The arbitration continues with the properly constituted tribunal.

This approach avoids both extremes:

automatic restart and automatic continuation without safeguards.

24. Key principles emerging from the case law

The Spanish authorities collectively support the following propositions:

1. Independence is continuing

An arbitrator must remain independent and impartial throughout the arbitration, not merely at appointment. STSJ Madrid 70/2016 and subsequent Madrid decisions reinforce this.

2. Substitution must respect the original appointment mechanism

Article 20 deliberately preserves the procedure originally used to appoint the departing arbitrator.

3. A party cannot obtain a replacement merely because it dislikes the arbitrator

The Madrid jurisprudence distinguishes genuine impartiality concerns from dissatisfaction with the arbitrator's reasoning or evidentiary decisions.

4. Tribunal composition is legally significant

Spanish courts have treated defective tribunal composition as capable of affecting the validity of an award. STSJ Madrid 14/2016 and STSJ Madrid 23/2019 illustrate this principle.

5. Replacement does not automatically restart proceedings

Article 20(2) requires a case-specific determination after hearing the parties.

6. Judicial intervention remains exceptional

Spanish courts generally exercise limited supervisory jurisdiction over arbitration, particularly through the narrowly defined annulment grounds.

25. Overall conclusion

Spanish arbitration law adopts a continuity-oriented but fairness-sensitive system of arbitrator substitution.

The central rule is Article 20 of Law 60/2003:

the replacement arbitrator is appointed according to the rules governing appointment of the arbitrator being replaced, irrespective of the reason for replacement; after appointment, the tribunal must hear the parties and determine whether previously conducted proceedings should be repeated.

The most important practical distinction is therefore:

Cessation of the arbitrator ≠ automatic reconstitution of the tribunal ≠ automatic repetition of the arbitration.

Instead, Spanish law requires three separate inquiries:

1. Why has the arbitrator ceased or become unable to act?
2. Who is entitled to appoint the replacement?
3. Which, if any, previous proceedings must be repeated?

The jurisprudence of the Spanish Constitutional Court and the Madrid High Court of Justice, together with the older Supreme Court authority on tribunal composition, demonstrates that substitution is ultimately designed to preserve party autonomy, tribunal legitimacy, independence and procedural fairness.

Principal authorities discussed

1. STC 9/2005, 17 January 2005 — Metalibérica, S.A. v Traser, S.A.
2. STSJ Madrid 70/2016, 4 November 2016
3. STSJ Madrid 61/2015
4. STSJ Madrid 63/2021, 13 October 2021
5. STSJ Madrid 31/2021, 21 May 2021
6. STSJ Madrid 28/2023, 18 July 2023
7. STSJ Madrid 14/2016, 8 February 2016
8. STSJ Madrid 23/2019, 28 June 2019
9. STS, 13 July 1982