SPAIN Law and Practice Contributed by: Pablo Silván and Fernando Manzanedo, Ramón y Cajal Abogados, S.L.P.
9.2 Approach of the Courts Spanish courts adopt a generally pro-enforcement stance toward arbitral awards, especially under the framework of the New York Convention and the ICSID Convention, to which Spain is a party. However, there are nuanced standards and exceptions – particularly around public policy and sovereign immunity – that shape enforcement outcomes. Spanish courts typically favour enforcement unless there is a clear and compelling reason to refuse it. Spanish courts distinguish between the following. • Domestic public policy – this refers to fundamental principles of Spanish law, such as due process, legality, and non-discrimination. Enforcement may be refused if the award violates these principles in a manifest and serious way. • International public policy – this is a broader and more flexible category, encompassing Spain’s obli- gations under international law, including human rights and treaty commitments. Spanish courts tend to apply international public policy when assessing foreign awards, especially in investor– state disputes. The violation must be “manifest, serious and intoler- able” to justify refusal. Minor procedural irregularities or controversial findings are not sufficient. Spanish courts recognise two types of immunity. • Jurisdictional immunity – this is generally waived when a state consents to arbitration. Spanish courts follow the principle that consent to arbitra- tion implies waiver of jurisdictional immunity, espe- cially in treaty-based investor–state disputes. • Execution immunity – this is more robust and harder to overcome. Spanish courts protect non- commercial assets (eg, embassies, military prop- erty, and central bank reserves) but commercial assets may be subject to enforcement if the state has waived immunity or acted in a commercial capacity. Spain has resisted enforcement of several ICSID awards by invoking execution immunity, but courts
in other jurisdictions (the UK, US and Australia) have increasingly rejected these defences. 9.3 Asset Tracing and Recovery Spanish courts can enforce foreign arbitral awards under the New York Convention or ICSID Conven- tion, but enforcement against foreign assets located in Spain depends on several factors. • If the assets belong to a foreign state, Spanish courts recognise sovereign immunity from execu- tion for non-commercial assets (eg, embassies, and military property). Commercial assets (used in trade or business) may be subject to enforcement if the foreign state has waived immunity or acted in a commercial capacity. Spanish courts apply a restrictive theory of sovereign immunity, meaning immunity does not apply to commercial activities. However, enforcement is still subject to judicial decision and public policy considerations. • When enforcing awards abroad against Spanish state assets, the approach depends on the jurisdic- tion. Most jurisdictions (eg, the UK, US and France) apply restrictive immunity, allowing enforcement against commercial assets (bank accounts held by Spanish government or agencies, real estate not used for diplomatic purposes, receivables from commercial contracts, and state-owned compa- nies operating abroad). Spain has attempted to resist enforcement by invoking execution immunity, especially in cases involving Antin, NextEra, and CSP Equity. Courts abroad may allow discovery proceedings to trace Spanish assets, especially in common law jurisdictions. Spanish courts – and many foreign courts – will pierce the corporate veil only in exceptional cases, such as fraud or abuse of legal personality, asset shielding to avoid enforcement, and economic unity between the state and its corporate vehicle. In Spain, the doctrine is grounded in civil law principles (good faith, and pro- hibition of abuse).
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