Spain’s Ley Orgánica 1/2025: A Procedural Trap for Arbitration-Related Court Proceedings?

Montesquieu cautioned in the Spirit of Laws (1748) that “unnecessary laws weaken necessary ones”. Spain’s Ley Orgánica 1/2025 (the “LO 1/2025”) illustrates this point. In pursuit of efficiency, LO 1/2025 makes prior negotiation through Medios Adecuados de Solución de Controversias (“MASC”) a precondition for admitting civil claims. MASC is defined broadly: any good‑faith effort to achieve an out‑of‑court settlement, with or without a neutral third party. Its application to arbitration-related proceedings raises a structural question: does a tool designed to encourage settlement of civil claims belong in the exceptional judicial control of arbitral awards? The underlying premise of MASC is that parties should attempt to resolve their differences before resorting to litigation, yet annulment proceedings do not exist to resolve a dispute but to verify that the arbitral process complied with fundamental procedural requirements.

That logic is intuitive in civil litigation, but it is far less obvious in arbitration‑related court proceedings. Under Spain’s Arbitration Act (the “AA”), annulment actions must be brought using the procedural form of a civil claim. Since these are civil proceedings, a literal reading of LO 1/2025 could extend the MASC gateway to set aside applications, treating it as an admissibility filter. Yet an award is not a claim awaiting negotiation; it is the final product of the parties’ agreement to arbitrate, subject only to limited judicial control.

Consequently, the question arises whether LO 1/2025’s MASC admissibility filter will be extended to annulment proceedings of arbitration awards, even though those proceedings serve a fundamentally different function, exceptional external control of the process, from the settlement-oriented civil litigation the law was designed to address. This post sets out the design of the MASC requirement introduced by LO 1/2025 and the relevant AA architecture, examines the first judicial reaction suggesting that MASC may be treated as an admissibility issue in annulment proceedings, and maps the practical implications of applying that filter to proceedings designed to protect, rather than renegotiate, the integrity of arbitral awards.

The MASC Framework under LO 1/2025 and its Relevance for Arbitration

The LO 1/2025 defines MASC broadly as any good‑faith negotiation activity aimed at reaching an extrajudicial settlement, whether conducted directly between the parties or with the involvement of a neutral third party. Even so, the regime is not framed as applying to civil proceedings generally but to civil and commercial matters while excluding labour, criminal, insolvency, and public sector matters.

Against that background, Article 5 of the LO 1/2025 establishes MASC as a pre‑action admissibility requirement in the civil courts. For a claim to be admitted, the claimant must demonstrate that a prior attempt at negotiation has taken place or explain why such an attempt was impossible. Article 5 also specifies what counts as a qualifying effort: mediation, conciliation, a neutral expert opinion, a confidential binding offer, or any recognised negotiation process compliant with the statute’s rules. Therefore, a claimant filing a civil action must outline the negotiation steps taken and attach supporting documents.

It is at this point that the interaction with arbitration becomes delicate.

Under the AA, an action for annulment is not an appeal but a distinct mechanism for challenging an arbitral award on limited grounds. Jurisdiction lies with the Civil and Criminal Chamber of the Tribunal Superior de Justicia (the High Court of Justice or the “TSJ”) of each Autonomous Community, and the action proceeds through a claim‑form procedure, broadly aligned with the juicio verbal track, the summary oral procedure under Spanish civil procedural law.

Applied literally, these procedural elements point in a single direction: if LO 1/2025 requires a prior attempt at MASC for any civil claim and if the AA structures annulment as a civil claim, then an annulment application would need to be filed together with evidence of a prior negotiation attempt to satisfy the new admissibility filter.

However, this does not seem to suit the nature of an annulment proceeding. An arbitral award is not a claim awaiting settlement; it is the final expression of the parties’ decision to remove their dispute from the state courts and submit it to arbitration, subject only to exceptional judicial review. It is difficult to conceive what mediation, for example, would meaningfully achieve at this stage. Would the parties be expected to negotiate whether the award should be annulled?

If interpreted in this way, the MASC filter would cease to function as a tool for streamlining civil justice and would instead operate as a procedural obstacle in proceedings that exist precisely to ensure the stability and legitimacy of arbitral awards.

Despite the logic of this reasoning, the earliest judicial signals in Spain point in a different direction.

Aragón’s TSJ Opens the Door to MASC as an Admissibility Issue in Annulment Proceedings

The debate has already moved from theory to practice. In the recent Judgment nº17/2025 of 12 December 2025, the TSJ of Aragón (the “Court”) briefly addressed an objection based on LO 1/2025’s new pre‑action negotiation requirement.

The claimants sought partial annulment of an arbitral award issued by a sole arbitrator appointed by the Corte Aragonesa de Arbitraje y Mediación (the Aragonese Court of Arbitration and Mediation, a regional arbitration institution). In its statement of defence, the respondent asked the Court to dismiss the action on procedural grounds: the claimants, it argued, had failed to comply with Article 10 LO 1/2025 because they had not attempted prior negotiation before filing the annulment claim.

The Court dealt with this point as its first legal ground. Crucially, the Court did not reject the objection as inapplicable to annulment proceedings. Rather, it examined whether a prior negotiation attempt had occurred. Based on the evidence presented, most notably an email exchange submitted by the respondent, the Court found that a negotiation effort had indeed taken place. The claimants had approached the respondent; no agreement had been reached due to substantive divergences, and the correspondence showed that, while one proposal was rejected, the claimants had accepted direct lawyer‑to‑lawyer discussions and proposed a meeting.

On that basis, the Court dismissed the procedural objection and proceeded to analyse the merits of the annulment grounds.

The concern lies not in the outcome but in the court’s premise. By engaging with the objection and assessing whether MASC had been attempted, the Court effectively treated LO 1/2025 as an admissibility filter for annulment actions, rather than as a mechanism confined to ordinary civil litigation on the merits. If this approach is replicated elsewhere, respondents will have a clear incentive to raise MASC as a threshold defence in set‑aside proceedings across Spain, shifting both time and cost toward a front‑loaded dispute over admissibility.

It must be noted that there is an additional difficulty in this situation: neither the AA nor LO 1/2025 expressly excludes annulment proceedings from the MASC framework. This legislative silence has fueled uncertainty as to the intended reach of the new requirement. Against that, the fact that the Court chose to engage with the MASC objection (rather than dismiss it outright as incompatible with annulment) will inevitably be read as a signal that MASC may now form part of the procedural landscape of award annulments, even if it makes no sense.

This is a problematic approach. While it does not alter the function of annulment as an exceptional external control of the award’s validity, it makes the process more burdensome by introducing an additional procedural step that serves no meaningful purpose in this context.

Where this Leaves Annulment in Spain: Uncertainty and Delay

Beyond this early decision, there is no other case law on whether LO 1/2025’s MASC requirement applies to annulment actions. That uncertainty is likely to persist. Given the decentralised structure of annulment proceedings, brought, as mentioned above, before the 17 TSJs across Spain, the Aragón judgment is merely the first of many, and the initial trajectory will be shaped by courts that may adopt divergent approaches until a unified and (hopefully) coherent line emerges from the Supreme Court.

In the meantime, the concern is not that MASC is inherently burdensome. In many cases, demonstrating a prior attempt at negotiation will be straightforward. The difficulty is structural. By introducing an additional admissibility battleground at the outset of annulment proceedings, LO 1/2025 opens the door to satellite disputes about what qualifies as a sufficient negotiation attempt, whether the effort aligns with the object of the annulment claim, and whether the supporting evidence is adequate. These debates consume time and resources in a procedure already marked by its complexity.

It is hard to avoid the fact that this is precisely the type of drafting risk Orwell warned against in Politics and the English Language (1946), where legal drafting that promises clarity can end up “giving an appearance of solidity to pure wind”. A reform aimed at streamlining civil justice may, if transposed mechanically into set‑aside proceedings, produce the opposite effect. Annulment relies on speed, finality and judicial restraint. Introducing a negotiation filter designed for ordinary civil litigation threatens to slow down a mechanism that exists precisely to ensure the stability of arbitral awards.

Montesquieu’s point therefore resonates. If a measure crafted to promote efficiency becomes a procedural trap in annulment, it risks weakening what is necessary in Spain’s arbitration framework: the commitment that arbitral awards are final and that judicial intervention remains exceptional.