SPAIN Law and Practice Contributed by: Alfonso López-Ibor and Olivia López-Ibor, Lopez-Ibor Abogados
2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation Concepts of contractual assignment and novation are recognised in Spain under Articles 1203 and 1526 of the Spanish Civil Code. 2.7.2 Assignment/Novation of Leases Under Foreign Laws Assuming that a lessor transferring its rights under an aircraft lease is assigning or novating its rights under such lease to a new lessor pursuant to a New York or English law-governed assignment and assumption agreement or novation agreement, the agreements governed by English or New York law would be held valid by a Spanish court. Under Spanish law, the con - sent of the lessee is necessary. 2.7.3 Enforceability of Lease Assignments/ Novations For enforcement purposes, the lease assignment and assumption/novation can be enforced without the lease being translated, certified, notarised or legal - ised. However, a Spanish judge will request translated copies of both the lease assignment and assumption/ novation and the lease. For recordation purposes, lease assignment and assumption/novation will need to be translated by a certified translator, certified, notarised or legalised. 2.7.4 Filing/Registration of Lease Assignments/ Novations See 2.3.4 Registration of Leases With the Domestic Aircraft Registry . 2.7.5 Taxes/Duties Payable on Assignment/ Novation As an assignment and assumption/novation agree - ment is between business operators, it is exempted from Spanish stamp duty (or other tax) according to Article 7.5 of Law ITP and AJD ( Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados ). Under the assignment and assumption/novation agreement, there would be no VAT payment by the lessee. Rent renewed by the new lessor would be exempted from the Spanish withholding tax provid -
operated by it. This legal provision may be applicable to the lessee to the extent that the aircraft is operated in certain domestic scheduled services where a public service obligation has been imposed. In relation to the above, there are not known to be any judgments of the Spanish courts or judicial state - ments which clarify the scope of “public service” or ”interruption” for this purpose. Council Regulation (EU) No 1008/2008 of 24 September 2008 provides for the rules under which any member state may impose on an air carrier a public service obligation in respect of scheduled air services to an airport serving a peripheral or development region in its territory or on a less frequented route to any regional airport in its territory, any such route being considered vital for the economic development of the region in which the airport is located, to the extent necessary to ensure on that route the minimum provision of scheduled air services satisfying certain requirements of continuity, regularity, capacity and pricing. It is possible that a Spanish court might (i) adopt a similarly restrictive interpretation of “public service” in relation to the provisions described above, and/or (ii) deem that the repossession of a single aircraft by a lessor in the rightful exercise of contractual rights did not constitute ”interruption” for this purpose. How - ever, it is not possible to give a definitive view on this matter due to the lack of precedent in Spanish courts. Waiver of this immunity would not be permitted as it is based on mandatory law protecting the public interest. 2.6.12 Enforcement of Foreign Arbitral Decisions Spain has adopted the 1958 Convention on the Rec - ognition and Enforcement of Foreign Arbitral Awards (the New York Convention). A foreign arbitral award (eg, a US award) would be recognised and enforced in Spain if it satisfies the requirements of such Convention. 2.6.13 Other Relevant Issues There are no other relevant issues that a lessor should be aware of in relation to the enforcement of its rights.
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