Start of main content

Experts rely on arbitration to settle disputes in technological contracts

| News | International Arbitration

They value the specialization of arbitrators and the time availability to reach an agreement with greater precision in matters of high technical complexity

Arbitration is a more advantageous option for the solution of disputes in technological projects due to the greater availability and specialty of the arbitrators in front of the judges, which allows a greater precision in the analysis of the documentation which, in these cases, is of great technical complexity.

This was evident in the I Little Open that the European Arbitration Association organized under the title Technological Projects: Practical Vision. Contract negotiation. Arbitration and other mechanisms for resolving conflicts in the Andersen Auditorium in Madrid within the framework of the Arbitration Open, in which Iñigo Rodríguez-Sastre, Partner of Andersen Tax & Legal, Elena Sevila, Director in the Litigation, Insolvency and Arbitration area of the firm, Eric Maciá, Global Legal Manager of Minsait, also Borja García, General Counsel of Iberdrola Ingeniería y Construcción, Teresa Martínez Zatón, of BBVA's non-financial contracting legal services, Mónica García, Director of Auxadi's Legal Department, and Javier Íscar, Secretary General of the European Arbitration Association participated.

During the conference, the concept of a technological contract, its object and above all its legal nature were defined, issues that can sometimes be complex. This was explained by Eric Maciá, who referred to the importance of the duty of collaboration that is often established between supplier and acquirer in technology contracts and that can have an impact on this legal qualification (beyond the classic definition of "work" or "service" contracts).

At this point, the speakers agreed on the importance of the pre-contract phase to minimize the risks of future disputes and to establish what exactly the client requires and to define the different stages of the technology project.

Teresa Martínez Zatón and Borja García explained that, in their experience, companies that contract technology have technical profiles that assist the legal departments in this preliminary phase and that allow a better assessment of the company's needs before choosing a supplier and signing a contract.

For her part, the Global Legal Manager of Minsait (Indra) explained that sometimes the object of the contract and its definition can vary as the development of the contracted product does, which makes it necessary to foresee the possibility of extending or even modifying the contracts signed.

Precisely for this reason Mónica García highlighted the importance of establishing milestones and compliance phases in a technology contract and documenting them properly.

In her speech, Elena Sevila stressed that these milestones and phases of compliance, as well as the documentation that is being generated regarding them, is essential for a subsequent arbitration or judicial procedure and this despite the fact that "it is increasingly difficult to find evidence of arbitration because working environments are changing," as pointed out by the General Counsel of Iberdrola Engineering and Construction. Thus, they stressed the importance of signing documents of partial and final acceptance of the project.

With regard to pricing in this type of contract, the speakers referred to the need to seek a competitive approach and to have a minimum traceability of the project. The need to take into account not only the costs of the contract itself but also the costs of further development, updating and/or maintenance of the object of the contract was also stressed.

The participants also analysed the acquisition and management of licences, on which Teresa Martínez Zatón pointed out that there is an increasingly general tendency for companies to acquire licences for use, which an external supplier cedes as a service, instead of the purchase of perpetual licences to which the companies were more accustomed, so that companies are increasingly obliged to work with external suppliers on certain systems.

Eric Maciá confirmed this assessment and added that although licenses allow for faster upgrades, certain license-related services can pose major risks and compromise the company's cybersecurity.

Finally, Auxadi's Legal Director addressed the mechanisms of dispute resolution in technology projects and distinguished the convenience of including an arbitration clause in a technology contract depending on the type of project. The large ones, she said, tend to have an international component and, especially in these cases, she highlighted the convenience of opting for arbitration for two reasons: the specialization of the arbitrator, given the technical complexity of these matters, and temporary availability, since an award can take six months to be issued while a judge issues an average of six judgments per week. At this point, he stressed that in order to choose an institution and even jurisdiction, it is necessary to assess where the companies involved are located, which party has more weight, whether the company allows negotiations, and so on. "If there is time and possibility in the negotiation of the contract, it is advisable to make a clause that allows you to go to arbitration," said Monica Garcia, who also referred to mediation as a good option that is also compatible with arbitration.

At this point, Íñigo Rodríguez-Sastre valued the Draft Law for the Promotion of Mediation, which promotes a model that tries to favour this type of conflict resolution, and stressed that in establishing mediation clauses it is necessary to specify the time periods well and to be able to demonstrate that there has been a real predisposition to mediate.

The Director in the area of Arbitration of Andersen Tax & Legal, Elena Sevila, commented that the Arbitration Institutions currently include complex technological means in the conduct of arbitration procedures, but should also take into account the specialty of the matter when dealing with disputes that may arise in this area.

End of main content