Press release

Pérez-Llorca holds a seminar on experience in arbitral proceedings concerning large-scale energy and engineering projects


Pérez-Llorca held a seminar on large-scale energy and engineering projects, with the principal objective of sharing experience gained during arbitral proceedings with companies that are engaged in such projects. Speakers at the event included Félix J. Montero, Guillermina Ester, Partners of the Litigation and Arbitration department at Pérez-Llorca, and Counsel María Luz Lorenzo and lawyers Mercedes Romero and Fernando Bedoya of the same department.

The first speakers were María Luz Lorenzo and Fernando Bedoya who analysed the important issues that can arise before starting a dispute. They paid particular attention to the advantages and disadvantages of the following: the clauses being conditional on prior negotiation pacts; agreeing to the obligation of consulting a technical expert before arbitration; and including Dispute Board clauses. Finally, with regard to this first analysis prior to the dispute, the speakers spoke of the risk of withholdings in insolvency cases and the possible suspension of the enforcement of first demand guarantees.

This was followed by contributions from Félix J. Montero, Mercedes Romero and Fernando Bedoya, who discussed key issues in the pre-litigation phase of arbitration, both from a procedural and substantive perspective. With regard to the procedural phase, Montero explained the criteria to be taken into account when choosing an arbitrator and accessing the relevant information that is needed in order to learn about the arbitrator. Romero then moved on to the substantive phase, and explained the difference between Force Majeure and Hardship and their impact on engineering and energy contracts. He also discussed issues regarding the effects of declaring the termination of a contract. As a final contribution to this section, Fernando covered issues relating to the handover and settlement of the works and the possible waiver of direct action by subcontractors.

Following on from this, experience acquired during the course of arbitration was discussed, also from both a procedural and substantive point of view. From a procedural perspective, Guillermina Ester commented on the possibility that the Arbitral Tribunal can decide on certain issues in advance, either because they will have an impact on the development of the arbitration or because they simplify it. She also stressed the importance of preparing the hearing and adjusting the arbitration, as far as possible, to the progress of the project. Mercedes Romero then took the floor to explain the importance of producing documents and the need to be extremely aware that any document could be subject to discovery. Then Romero analysed the differences in damages under different legal systems and the need to understand which damages are being included and which are being excluded, according to the law applicable to the contract. Mercedes ended this section by explaining the importance of exchange rates in contracts carried out offshore and onshore and which, therefore, could contain payments in different currencies.

The last section was dedicated to the correction, clarification, supplement to, setting aside and enforcement of, the award. Ester emphasised the importance of properly analysing the award in order to avoid problems in the future enforcement of the award or, if appropriate, to prepare the action for the setting aside of the award. Regarding the setting aside of the award, Ester highlighted recent important cases and underlined the importance of reporting any infringements occurring during the course of the arbitration process that could be used to enforce setting aside the arbitration. Lastly, Fernando analysed the recognition and enforcement of awards in which the following issues are addressed: the extending of arbitral clauses to non-signatory parties; the relocation of the awards; the non-recognition of the award in the place of enforcement; and legislative developments regarding enforcement.

The session closed with a summary by Félix J. Montero of the most important issues discussed in the seminary.

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