Private international law governs the international elements in matters of private law, i.e. family law, law of contract. It also determines whether and under what conditions a judgment rendered by a foreign court will be recognized and enforced by a national court.
In Spain foreign judgments are recognized based on bilateral or multilateral treaties or understandings. Within the European Union, Enforcement of Judgments is covered by Regulation EC 44/2001 and EC 1346/2000 for insolvency proceedings. Outside of the EU the main international organisations concerned with developing and harmonization of these rules are the International Institute for the Unification of Private Law (UNIDROIT), the Hague Conference on Private International Law (HCCH or Hague Conference), and United Nations Commission on International Trade Law (UNCITRAL).
What does enforcement mean in civil and commercial matters?
Enforcing a court decision means complying with and obtaining the full right gained by the party that won the dispute. This may involve a request by a plaintiff for the return of a certain amount of money, the right to ask a defendant to do something or to refrain from doing something, or a request to have a right recognised by registration in public registries.
When trying to enforce a foreign judgment in Spain a specific set of rules and procedures apply. The law which governs this procedure varies depending on the origin of the judgment, whether it was from a state within the European Union or from another foreign court.
The rules governing the jurisdiction of courts and the recognition and enforcement of judgments in civil and commercial matters in European Union (EU) countries is covered by Regulation no. 44/2001 adopted by the council of the European Community on the 22 December 2000. The Regulation … lays down uniform rules to settle conflicts of jurisdiction and facilitate the free circulation of judgments, court settlements and authentic instruments in the European Union.
The Regulation provides that a judgment given in an EU country is to be recognised without special proceedings, unless the application for recognition is contested. A declaration that a foreign judgment is enforceable is to be issued following purely formal checks of the documents supplied. The regulation lists grounds for non-enforcement however, courts are not permitted to raise these of their own motion.
The Regulation further defines Judgment as any judgment given by a court or tribunal of an EU country, whatever the judgment may be called, including a decree, order, decision or writ of execution. Under no circumstances may a foreign judgment be reviewed as to its substance.
It is important to note that the regulation does not cover revenue, customs or administrative matters. Neither does it apply to:
- The status or legal capacity of natural persons, matrimonial matters, wills and succession
- Bankruptcy; (but does it apply to other charges)
- Social security
Regulation 1346/2000 Insolvency Proceedings
This regulation establishes a common framework for insolvency proceedings in the European Union (EU) and has been incorporated into Spanish Law my means of the Insolvency Act (Ley Concursal). Its purpose regarding insolvency proceedings is to avoid assets or judicial proceedings from being transferred from one EU country to another in order to obtain a more favourable legal position to the detriment of creditors (i.e. forum shopping).
The regulation also provides for the automatic recognition of individual member state insolvency proceedings within the EU. Decisions by the court with jurisdiction for the main insolvency proceedings are to be recognised immediately in other EU countries without further scrutiny. The applicable jurisdiction for insolvency proceedings as provided by the regulation is the court of the member state where the debtor’s centre of main interests is located. However, restrictions on creditors’ rights (a stay or discharge) are possible only if the creditor has consented.
The regulation does not apply to entities with a centre of main interests outside of the European Union. The extent to which insolvency proceedings from outside of the European Union are recognised will depend on the domestic legislation and practice of each particular member state.
If the judgment required to be enforced in Spain is the decision of a court within the European Union application must be made to the relevant court for a declaration that the foreign judgment is enforceable in Spain (exequatur).
The declaration of enforceability (exequatur) must be issued after certain formalities have been completed and must be served on the other party, who may only challenge it in the courts;
It is possible that recognition of a foreign judgment may be refused if recognition would be contrary to public policy, irreconcilable with an earlier judgment, where the document initiating the proceeding has not been served in good time or the other party does not appear.
Spanish law requires that all judicial decisions be notified to the other party prior to enforcement. This is in order to leave open the possibility for appeal or reaching an agreement without the need for enforcing the judgment.
These procedures can be quite complicated and it is always advisable to make the application for enforcement through a lawyer or any other legal professional.
Outside the European Union including USA
Spanish law regulates the recognition and enforcement of foreign judgments from non-European Union member countries in Articles 951-958 of the Code of Civil Procedure (Ley de Enjuiciamiento Civil). In order to execute a judgment in Spain application must be made in the appropriate jurisdiction within Spain.
Rules of jurisdiction
The basic principle of jurisdiction exercised in Spain is that it is determined on the basis of the country in which the defendant is domiciled, regardless of their nationality. In relation to judgments from countries outside the European Union Spain follows The Hague Convention (which came into force in Spain on 3 April 1997) which provides that the Courts of First Instance have jurisdiction over defendants whose domicile or place of residence is located within its territory.
Again, the applicant party will have to submit a written request for recognition or “exequatur” before the courts in Spain. The exequatur process consists of a review by a court to determine if the request for recognition meets the requirements established by Spanish law.
However, the judge may only examine the substance of the foreign judgment to ascertain whether or not it may be enforced in accordance with Spanish law. Article 954 of the Code of Civil Procedure establishes the specific legal requirements for recognition:
- The execution has been issued in pursuit of a personal action acción personal. The judgment must not affect the ownership of real property located in Spanish territory.
- The defendant must have been summoned properly before the court at the trial .
- That enforcement of the judgment must not be contrary to Public Policy.
It is always advisable to translate the judicial decision into Spanish. However, it is important to note that the other party can challenge a normal translation and, even though it is not strictly necessary, a sworn translation will be required. An Apostille is required most of the time.
Although you can make an application through the Spanish Ministry of Justice or the consulate, the most efficient and convenient method is to make the application for recognition through a lawyer in Spain.
Once the designated competent Spanish court approves the foreign judgement the enforcement procedure can commence. According to article 545 of the Spanish Civil Procedure Act the same court that recognises the foreign judgement is responsible for its enforcement.
The steps of the enforcement procedure will vary with the type of judgement. In case of judicial monetary claims the Spanish court will grant a period of 10 days to allow the defendant to oppose the enforcement of the judgment on the grounds established in Articles 556 and 559 of the Spanish Civil Procedure Act (which provide for prescription, payment or settlement and lack of capacity). At the end of the 10 day period the applicant then has a further 5 days to respond to the defendant´s objections. The Court will then deliver a final judgment ordering the enforcement of the judgment or dismissing the application.
Perhaps an important note at this point is, as detailed above the determination of jurisdiction in international disputes and the recognition and enforcement of foreign judgments can be a complicated and lengthy process. Best Practice therefore would be to ensure that jurisdiction and applicable law in the event of a dispute should be agreed to in detail by the parties to any cross-border agreements.
This article is not considered as legal advice