French and Spanish law have much in common for historical reasons: their common features, their forming part of the European Union, and the latter trends to harmonize the Member States’ legislation. However, there exists an issue for investors: not only may French and Spanish proceedings differ on certain details, but also the legal vocabulary used in both countries is different. Regarding debt collection, it is vital for a French investor to learn of the existing procedures in Spain and the potential differences between the French and the Spanish systems.
This article aims to address the similarities and differences that French creditors may face regarding the main proceedings in French and Spanish law concerning debt collection.
French Proceedings Based on the Commercial Dimension
The three main procedures in French law are (1) the order for payment, (2) the summary judgment, and (3) full civil proceedings.
The “commercial” dimension clearly dominates debt collection in France: the competent jurisdiction is the Commercial Court, and the debt must always be of a commercial nature. In addition, the conditions allowing the use of different French procedures focus heavily on the nature of the claim. To know which procedure is available to a creditor, it is necessary to determine if the claim is certain, if its amount is determined or determinable, if its due date has passed, or if this kind of claim remains free from exclusion from certain procedures. Each of the three mentioned procedures requires some of these conditions, but none of them requires all of the conditions.
French procedures can sentence the debtor to pay. However, the judgment must be enforceable, the creditor has to use a bailiff, and the debtor cannot appeal.
French procedures are administratively cumbersome in their details and conditions, and by the fact that the competent jurisdiction is the Commercial Court. The choice of jurisdiction modifies the context of the procedure. Indeed, the judges in the Commercial Court are not French civil servants who have received judicial training; they are trade professionals. Thus, the relationship between the debtor and creditor may be different according to the judge because he or she will naturally put himself or herself in the place of an entrepreneur.
Spanish Law Favours Simplified Procedures
Debt collection in Spain has two main procedures: order for payment (“procedimiento cambiario cambiaro”) and the payment procedure (“procedimiento monitorio”). There is also the ordinary procedure. The Court of First Instance where the defendant lives conducts these three procedures.
In summary, the choice of the appropriate procedure is as follows: when the creditor has a security, he or she will use the order for payment; however, if the creditor does not have a security, he or she will use the payment procedure if the claim is less than 250,000 Euros and the ordinary procedure if greater than 250,000 Euros.
Spanish procedures for the debtor lead to a sentence to pay in a relatively short period of time (10 days for the order for payment and 20 for the payment procedure). However, the debtor will have the possibility to oppose the judgment. In such a case, oral proceedings become available if the first procedure was an order for payment, and the Spanish system uses the ordinary procedure if the first procedure was a payment procedure.
The action to enforce the obligations will allow the creditor to enforce the judgment made against the debtor if the latter continues not to pay voluntarily. This procedure is provided for in article 517 of the Spanish Code of civil procedure, that provides for a list of titles which the action can be based on (for instance a debt recognised by a deed or the enforcement of contractual terms by notarial deed). This means that if the creditor owns another title that is listed on article 517, the execution proceedings could be used directly, without initiating first a order for payment or a payment procedure.
At first, Spanish procedures seem easier and faster than French ones. Some details, such as the preparation of the file that must be sent to the judge or the verification of some substantive conditions, need, however, the assistance of a lawyer. The payment procedure has proven its worth in Spain, and public authorities have tried to generalize this procedure following these successful results.
Sébastien Inge & Mariano Jiménez
This article is not considered as legal advice