PORTUGAL Law and Practice Contributed by: Manuel Requicha Ferreira and Diana Avillez Caldeira, Cuatrecasas
provided that the exclusive jurisdiction provisions set forth in Council Regulation (EC) No 1215/2012 are complied with. A waiver of immunity is also recognised, except where, as previously mentioned, the assets are in the public domain ( bens do domínio público ), allocated to public interests or owned by states and diplomatic entities. 6.3 Foreign Court Judgments Judgments rendered by EU member state courts are enforceable in Portugal in accordance with the terms of Regulation 1215/2012. Judgments rendered by foreign courts outside the EU, should there be no bilateral treaty, will also be recognised and enforced in Portugal according to the procedures set out in the Portuguese Civil Procedure Code on the recognition of foreign judgments, pro- vided certain requirements are met. In respect of foreign arbitral awards, the enforcement scenarios may vary depending on the actual situation, and on whether or not they are covered by the New York Convention or by any bilateral agreement. 6.4 A Foreign Lender’s Ability to Enforce Its Rights Aside from the foregoing, there are generally no other matters that might impact a foreign lender’s ability to enforce its rights under a loan or security agreement. However, all documents, including any enforcement titles, have to be translated into Portuguese. The declaration of insolvency automatically triggers, in principle, the acceleration of the liabilities of the insolvent entity. As such, there will be, in principle, an automatic acceleration of the loan. In respect of guarantees, the declaration of insolvency gives rise to the automatic claw-back actions of: • granting of security ancillary to pre-existing obli- gations, or others that replace them, within six 7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes
months prior to the beginning of the insolvency proceeding; • personal guarantees, sub-guarantees, sureties and credit mandates made within six months prior to the beginning of the insolvency proceeding and not corresponding to transactions with a real benefit for the insolvent entity; and • granting of security simultaneously with the crea- tion of the secured obligations within 60 days prior to the beginning of the insolvency proceeding. These automatic claw-back actions do not apply to financial collateral arrangements, such as financial pledges. In addition to such automatic claw-back actions, acts performed or omitted within the two years prior to the insolvency proceedings may gener- ally be subject to claw-back if they are found to be detrimental to the insolvency and have been carried out in bad faith. Additionally, enforcement of guarantees and security is carried out within the insolvency proceeding of the guarantor – except for, for example, financial collat- eral arrangements. Therefore, all future enforcement proceedings will no longer be allowed, those currently pending will be suspended and creditors will need to lodge their claims in the insolvency proceeding. 7.2 Waterfall of Payments The Portuguese Insolvency Code provides for the fol- lowing credit classes and rankings. • Guaranteed credits: credits secured by security, including special statutory liens. These include real estate special statutory liens (eg, state cred- its related to real estate property tax), third-party security rights (eg, mortgage, income assignment, pledge), and movable assets special statutory liens (eg, credits resulting from judicial costs). • Privileged credits: credits secured by general statu- tory liens over assets integrated in the insolvent estate up to the amount corresponding to the value of the assets that are the object of the guarantee or the general statutory liens. These include movable assets general statutory liens (eg, employment credits) and real estate general statutory liens. • Common credits: all credits not included in another class.
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