In Spain foreign judgments are recognized based on bilateral or multilateral treaties or understandings.
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 the United Nations Commission on International Trade Law (UNCITRAL).
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, and 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.
The Law 29/2015, of July 30, 2015, on international cooperation in civil matters (the “Law”) was published in the Official State Gazette on July 31, 2015 and entered into force on August 20, 2015.
Applying in civil and commercial matters regardless of the type of court, including civil liability resulting from a criminal offence and employment contracts, this law acts as a general framework.
It came into place on a subsidiary basis to European Law and International Treaties as well as to specific sectorial legislation such as the Insolvency Law, the International Adoption Law, the Civil Registry Law, the Consumers and Users Law, the Arbitration Law, the Mortgage Law and Mortgage Regulations, the Commercial Code and Commercial Registry Regulations and the rules of international private law in the Voluntary Jurisdiction Law, which will have primacy, without precluding the subsidiary application of this Law’s articles.
1. Requirements (in form and substance) a foreign judgment must satisfy in order to be recognised and enforceable in Spain
Firstly, note that, save some exceptions (pursuant to certain international treaties), according to the Legal Cooperation Act for the enforcement of foreign judgments, it is necessary beforehand to undergo a formal contentious process for its recognition called “exequatur”.
In these cases, it is necessary to supply, along with the claim, the following documents:
- The original or certified copy of the foreign judgment duly legalised or apostilled
- When the decision was rendered in default, the document verifying that the defendant was notified with a summoning order
- A document attesting that the ruling is final and enforceable in the country of origin
- The corresponding translations
- A Power of Attorney
Further, the basic requirements for any foreign judgment (not subject to any international convention) to be recognised in Spain are the following:
- The judgment shall be final (i.e. no appeal has been submitted)
- It cannot be against the public policy of Spain
- It should not have breached the rights of defence, as would occur if the judgment was rendered in default when no notification took place with enough time to prepare a defence
- The foreign courts should not have decided on a matter for which Spanish courts were exclusively competent or concerning other matters when the jurisdiction of the foreign court was not based on the basis of a reasonable connection
- It cannot be irreconcilable with a judgment rendered in Spain
- It cannot be irreconcilable with a prior foreign judgment when the latter meets the necessary conditions for its recognition in Spain
- No pending proceedings have taken place between the same parties and on the same subject matter in Spain which have commenced on a previous date.
In addition, please note that any judicial decisions, legally defined as those rendered by a jurisdictional body of any State independently appointed, can be recognised or enforced.
With regard to interim measures, recognition or enforcement are only available provided that, before its adoption, a hearing took place in the presence of the defendant in circumstances when their refusal would entail a breach of the right to receive an effective legal protection.
1.1 Difference between recognition and enforcement of judgments: Legal effects of recognition and enforcement respectively
Recognition and enforcement show differences.
Enforcement means that a judgment may be executed before the competent court, while recognition is the process of giving the same effects to the judgment in the State in which enforcement is sought as it does in the State of origin.
The main reason why a judgment creditor may choose to merely recognise the judgment is to prevent the debtor from triggering litigation concerning the same subject matter or where the creditor aims to recognise a legal situation in the relevant country (e.g. divorce).
However, for the judgment to deploy all its effects and if the judgment creditor wants to compel the debtor to comply with the said judgment, enforcement must be sought.
1.2 Procedure for recognising and enforcing a foreign judgment in your jurisdiction
In general, the exequatur procedure will take place (save the provisions contained in international treaties where this procedure is not necessary) and the judgment creditor will file a claim seeking the recognition and subsequent enforcement of the decision.
The case will be heard by the First Instance Court or Commercial Court (depending on the subject matter of the judicial decision) of the registered domicile of the defendant or, secondarily, where enforcement will effectively take place or, lastly, the Court at which the claim is filed.
In these proceedings, no hearing will take place and the public prosecutor will be involved.
The ruling of the Court recognising the foreign judgment is subject to appeal first before the Appeal Court and, subsequently, before the Supreme Court following the requirements set forth under the Civil Procedure Act.
Further, along with the exequatur claim, it can also seek enforcement.
Enforcement proceedings are governed by the Civil Procedure Act.
They commence with a claim (either separate or along with the exequatur claim) seeking the enforcement of the judgment or award.
The claim shall be accompanied with:
- A copy of the decision (in arbitration, also a copy or the agreement and the document verifying its notification to the parties is requested)
- The power of attorney
- Any other documents that may be relevant to the enforcement proceedings.
The legal clerk will then proceed with the enforcement, rendering an order stating the affected parties and the subject matter of the enforcement, as well as the investigation and research measures aimed to localise the assets of the judgment debtor.
Finally, once the assets have been identified they will be allocated (either directly of after being sold) to the judgment creditor.
Please note that in case of opposition to the enforcement of the foreign judgment, the ruling deciding on such opposition can be subject to further appeal.
In case of dismissal of the enforcement without opposition, it is also possible to appeal such decision before the Appeal Court.
Lastly, note that, in general, the average time for enforcement is from four months to one year, and that pursuant to Articles 49 and 50.3 of the Legal Cooperation Act, partial recognition or enforcement is possible.
1.3 Grounds on what recognition/enforcement of a judgment can be challenged
This process cannot entail a revision on the merits, but it is designed to merely verify that formal requirements are met, in order to avoid that an “unfair” judgment is enforced under Spanish law.
This revision can be carried out during both the recognition (exequatur) and enforcement stages.
Thus, if the legal requirements are met, recognition and enforcement will generally take place.
In relation to enforcement, the eventual grounds included under the Civil Procedure Act are very limited.
In this sense, please note that the debtor could claim that:
(i) the limitation period to file the enforcement claim has elapsed;
(ii) it has complied with the judgment;
(iii) the principal amount of the enforcement is higher than the original penalty; and
(iv) other limited procedural grounds (for instance, the lack of capacity of the claimant, the nullity of the judicial order or the lack of capacity of the defendant for being considered as the debtor within enforcement proceedings).
Moreover, if the judgment is against Spanish public policy, it cannot be either recognised or enforced, and according to Article 36.2 of the Civil Procedure Act and Article 21.2 of the Organic Law of the Judicial Power, Spanish courts would not be competent to hear cases which involve sovereign immunity.
Both concepts are construed narrowly by Spanish courts.
In addition, there are no countries whose judgments are historically subjected to a higher degree of scrutiny in this regard.
In this vein, please note that although reciprocity is not requested under the Legal Cooperation Act, the Government could issue a Royal Decree stating that no cooperation will take place with those foreign countries that repeatedly refuse cooperation.
Lastly, note that, in Spain, anti-suit injunctions are not available.
1.4 Relevant legal framework applicable to recognising and enforcing foreign judgments relating to specific subject matters
In general, aside from the European Regulations concerning specific subject matters, it is not foreseen that any particular legal framework applies.
1.5 Spanish court’s approach to recognition and enforcement of a foreign judgment when there is:
(a) a conflicting local judgment between the parties relating to the same issue; or
(b) local proceedings pending between the parties
In the cases highlighted, according to the Legal Cooperation Act, recognition will be refused if it (i) would be irreconcilable with a Spanish ruling, and (ii) cannot be recognised in scenarios where pending proceedings between the parties take place in Spain if they have commenced before the foreign proceedings.
1.6 Spanish court’s approach to recognition and enforcement of a foreign judgment when there is a conflicting local law or prior judgment on the same or a similar issue, but between different parties
Since Spanish courts cannot review the merits, the revision will be limited to verifying whether the judgment is against public policy when applying any applicable law to the case.
Further, if the foreign judgment is irreconcilable to a Spanish judgement, it will not be recognised pursuant to the Legal Cooperation Act.
1.7 Spanish court’s approach to recognition and enforcement of a foreign judgment that purports to apply the Spanish Law
Spanish courts will neither review the merits nor the procedural rules that may have been applied.
Therefore, the revision will be limited to verifying whether any of the conclusions reached (concerning the legal merits) or the procedure (e.g. whether the parties could properly defend themselves) amounted to a breach of public policy.
1.8 Relevant limitation period to recognise and enforce a foreign judgment?
Spanish case law has clarified that the limitation period is five years as from the date the foreign judgment is made final, pursuant to Article 518 of the Civil Procedure Act (judgment of the Supreme Court 4838/2014, dated 16 October 2014).
2 Requirements (in form and substance) must the judgment satisfy in order to be recognised and enforceable under the respective regime
Find below the answers depending upon the specific regime:
a) Lugano Convention: The decisions that can be enforced are those that fall within its scope. It basically reproduces the requirements stated in EU Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I Bis Regulation”), save the last mention of interim measures, which can be ordered together with the enforcement of the judgment.
It recognises the possibility of a partial enforcement of a judgment.
b) NY Convention: The Convention is applicable to any arbitral awards that fall within the description stated in Article I. According to Article IV, the parties, in order to obtain recognition and enforcement, shall supply: (i) the duly authenticated original award or a duly certified copy thereof; and (ii) the original arbitration agreement or a duly certified copy thereof.
Further, if the said award or agreement is not made in an official language of the country in which the award is enforced, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language, which shall be an official or sworn translation.
In addition, pursuant to Article V, recognition and enforcement of the award may only be refused where:
(i) the parties to the arbitration agreement were under some incapacity, or the said agreement is not valid;
(ii) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;
(iii) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced;
(iv) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; and
(v) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
Pursuant to Article V, other grounds available for refusal are:
(vi) the subject matter was not arbitrable; and
(vii) the award is against public policy.
These grounds have been strictly applied by Spanish courts.
Lastly, it should be noted that enforcement of partial/interim awards is possible.
c) Geneva Convention: This Convention is applicable to controversies arising from commercial international transactions. This Convention reflects the same first four requirements as set forth pursuant to Article V of the NY Convention. As stated in point b) above, enforcement of partial/interim awards is possible.
d) Washington Convention: This convention is applicable to arbitral awards issued by the International Centre for Settlement of Investment Disputes (ICSID) regarding the disputes concerning an investment between a signatory state and a national of another signatory state.
It requires a copy of the award certified by the Secretary-General.
Further, according to Article 54.1, each Contracting State shall recognise an award rendered pursuant to the Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State.
Therefore, no exequatur will be needed. Also, enforcement of partial/interim awards is possible.
This convention does not specify any cause of opposition.
Therefore, only the causes of opposition to enforcement set forth under the Civil Procedure Act detailed in question 2.5 apply.
The limitation period would be five years, as stated in question 2.11 above.
2.1 Procedure for recognising and enforcing a foreign judgment
For the European Regulations and the Washington Convention, no exequatur will be necessary and, therefore, enforcement proceedings according to the procedural law applicable to the Member State where the enforcement is made could commence automatically.
As to the remaining judgments and arbitral awards, exequatur will be mandatory, either by direct application of the Legal Cooperation Act or by the reference to the latter made by the Spanish Arbitration Act 60/2003, of 23 December, when stating in its Article 46 – with regard to foreign awards – that the exequatur shall be governed by the NY Convention (save any more beneficial conventions) and be conducted by the procedure set forth by the civil procedural framework for judgments rendered by foreign courts.
2.2 Grounds on what recognition/enforcement of a judgment can be challenged under the special regime
In this sense, please note that no revision on the merits is possible for either the European Regulations or for the arbitration conventions.
The challenge, where applicable, can be made either at the recognition stage or at the enforcement stage.
3.1 Once a foreign judgment is recognised and enforced: General methods of enforcement available to a judgment creditor
In order to enforce a judgment, the creditor may principally request the seizure of assets, although in some particular scenarios (for instance, when a company or the majority of shares or participations are seized), a judicial receiver may be also appointed and the creditor may also request to manage the assets seized in order to be repaid with their profits.
In addition, when the legal requirements set forth in the Civil Procedure Act for these purposes are met, interim measures could also be requested (for instance, interim freezing of assets, judicial intervention or receiver of assets, deposit of a movable asset, registration within the Property or Commercial Registry of the claim, prohibition to make any act of disposal concerning the assets or properties at stake, the suspension of the effects of corporate resolutions, etc.).