SPAIN Law and Practice Contributed by: Antonio Paredes, Carlos Saldaña, Manuel Martínez and Román Mejías, ZADAL
6.3 Foreign Court Judgments Court Judgments
Enforcement Routes and Restructuring Practice Enforcement methods depend on the security type and typically involve judicial foreclosure or, for cer - tain security (mainly mortgages and some pledges), non-judicial enforcement before a notary. In restruc - turings, private credit enforcement most often focuses on share pledges at holding company level to obtain control without disrupting operating assets, and fre - quently also on bank account pledges and receivables assignments. Real estate enforcement is commonly viewed as a later option given timelines and value- recovery considerations. Practical Constraints for Private Credit Lenders Beyond process, lenders must factor in corporate and structural limitations, including corporate ben - efit, required corporate approvals and, in acquisition contexts, financial assistance restrictions. Where critical operating assets are pledged, lenders also weigh business continuity and value preservation, and insolvency proceedings may further limit individual enforcement actions. 6.2 Foreign Law and Jurisdiction Choice of Law and Jurisdiction Spanish courts generally uphold an express choice of foreign law under the Rome I framework, subject to Spanish public policy and overriding mandatory rules that may still apply to particular issues. Submission to a foreign jurisdiction is also usually enforceable if val - idly agreed, but it may be limited for consumers and for matters of exclusive Spanish jurisdiction, notably certain rights in rem over real estate located in Spain. Within the EU, Brussels I bis supports recognition and enforcement of judgments, while outside the EU the position depends on treaties or Spanish domestic rules. Sovereign Immunity Waivers of sovereign immunity are generally valid if expressly granted by an authorised state representa - tive, but Spanish law distinguishes between immunity from jurisdiction and immunity from enforcement. As a result, even where jurisdictional immunity is waived, execution against state assets may still face restric - tions depending on the nature of the assets and the applicable immunity rules.
In Spain, foreign court judgments can generally be rec - ognised and enforced without a retrial on the merits. EU member state judgments benefit from the Brussels I Recast regime, which enables enforcement through a streamlined procedure and excludes any review of the substance. Non-EU judgments are enforced under applicable treaties or, failing that, under Law 29/2015 through an exequatur process focused on formal safe - guards (jurisdiction, due process, public policy and no conflict with existing Spanish judgments), rather than re-litigation. Arbitral Awards Foreign arbitral awards are enforceable in Spain under the New York Convention and the Spanish Arbitra - tion Act. Recognition is obtained from the competent Spanish court and likewise does not involve a mer - its review, with refusal grounds applied narrowly (eg, invalid arbitration agreement, due process defects or public policy concerns). 6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights Key Enforcement Considerations for Foreign Private Credit Lenders Foreign private credit lenders enforcing in Spain should factor in insolvency constraints (including potential stays and limitations once proceedings start), clawback risk for recently granted security, and corporate law issues such as financial assistance and corporate benefit, particularly for upstream or cross- stream support. Proper perfection and registration of security is critical to preserve enforceability and prior - ity, and cross-border structuring should also address consumer credit regulatory exposure (where relevant) and reputational considerations through careful local law design. 6.5 Timing and Cost of Enforcement Timing and Costs of Enforcement in Spain Enforcement timelines and costs in Spain depend on the collateral and whether the route is judicial or notarial: judicial mortgage foreclosure commonly takes 12–24 months, while enforcement of share or receivables pledges can often be completed in a few months if uncontested; notarial enforcement, where
241 CHAMBERS.COM
Powered by FlippingBook