SPAIN Law and Practice Contributed by: Alfonso López-Ibor and Olivia López-Ibor, Lopez-Ibor Abogados
3.2.5 Assignment of Rights and Benefits Without Attendant Obligations It is possible to assign the claims that a lessor is entitled to under an aircraft lease, such as the rents resulting from such an agreement, but it is not per - mitted to assign only the rights and benefits without also assigning the corresponding obligations of the lessor, given that when a party assigns its contractual position it also assigns its rights, benefits, duties and obligations. 3.2.6 Choice of Foreign Law Under Spanish law, a security assignment of a lease may not establish a definitive security, or the crea - tion of a jus in rem. To serve this purpose, a secu - rity assignment must be revised as a pledge of rights and formalised as a Spanish public deed. A security assignment under New York/English law will only function in terms of contract law, establishing only personal rights (jus in personam) between the parties involved. 3.2.7 Formalities/Mandatory Terms to Create and Perfect Security Assignments A security assignment would have to be redrafted as a pledge of rights and formalised as a Spanish public deed. 3.2.8 Domestic Law Security Instruments Cape Town filings provide more efficient and more economic protection than the Spanish local filings. In this respect, just AEP codes are needed. Domestic law security is subject to stamp duty (around 1% of the value of the aircraft). Moreover, Spanish notary translators and registers charge considerable fees, which depend on the value of the aircraft. 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws A security assignment would have to be redrafted as a pledge of rights and formalised as a Spanish public deed. 3.2.10 Transfer of Security Interests Over Aircraft/ Engines The transfer of security interests over an aircraft and/ or engines is recognised and permitted.
3.2.11 Effect of Changes in the Identity of Secured Parties Should the identity of a secured party change, the security interests are not jeopardised as long as this change is duly documented. 3.2.12 “Parallel Debt” Structures Spanish law does not envisage purely parallel debt structures where “parallel obligations” which mirror the obligations of the underlying debt owed by such borrower are created in favour of the security trustee for the same amount and payable at the same time as the underlying debt. 3.2.13 Effect of Security Assignments on Residence of Secured Parties A secured party under a security assignment would not be deemed to be resident or domiciled in Spain. As to fees/taxes, only notarial fees and registration charges apply (if the pledge is in respect of future rights and is recorded in the Register of Goods and Chattels). Recording a security assignment (as a re-charac - terised Spanish mortgage) incurs a 1% stamp duty assessed on the amount of the payment obligation (loan) secured plus an amount of interest that cannot exceed the amount of interest accrued during a period of five years. If re-characterised as a pledge of rights without delivery of possession, no Spain stamp duty would apply. There are also considerable notarial fees and registration charges. Enforcing a security assign - ment entails user fees payable to the Spanish court system, capped at EUR6,000. 3.2.14 Perfection of Domestic Law Mortgages To enforce a domestic law mortgage over an aircraft or engine, it must be recorded in the Register of Goods and Chattels. This process requires granting a notarial deed, a 1% stamp duty on the value of the asset, and registration. The security is perfected upon reg - istration. Spanish registers will meticulously verify the security document’s compliance with Spanish law.
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