Once a judgment has been passed, Spanish procedural legislation requires that the defendant discloses to the court that its assets are sufficient to satisfy the claim. Failure to comply with such requirement will result in the imposition of fines and may give rise to a criminal offence.
Should the defendant persist in this conduct, the claimant may request that the court requires any bank, public body and registry and any natural or legal persons he or she designates to disclose whatever goods, money or assets belonging to the defendant of whose existence they may be aware. In its request, the claimant must succinctly justify the reasons that lead him or her to believe that the required person or institution may have information relating to the asset position of the defendant.
The ownership of landed property is publicly available information in Spain. The information relating to the ownership of other assets is not public, but must be revealed by the person that is aware of its existence if it is required by a court to do so in the above-referenced manner. The intermediation of a court once a judgment has been rendered is the sole legal means whereby a party may identify another party’s asset position.
Domestic judgments or non-judicial titles involving enforcement are as follows.
Different types of domestic judgments are available, as follows.
The legal framework for civil and commercial enforcement of domestic judgments is governed by the Civil Procedural Act. The specific rules that would apply to enforcement proceedings depend on the relief granted in the judgment.
Options Available to Enforce Judgments
When enforcing domestic judgments or authenticated public documents, general rules are applied and specific rules will only apply depending on the type of relief which is granted (monetary obligations or specific performance). Only when enforcing the first notarial copy of a mortgage deed (non-judicial title) are special enforcement rules to be used. The main difference is based on faster mortgage foreclosure proceedings and the action in rem that is exercised in mortgage foreclosure.
General proceedings (Procedimiento de ejecución Ordinario) enforce judgments with monetary and non-monetary obligations, such as specific performance, third-party debt order, etc). Therefore, in monetary obligations, all assets of the defendant are suitable to be targeted and used to pay for the debt being claimed. In money judgments, a court's enforcement order will include the attachments of all or part of the debtor's assets identified in the writ of enforcement. Otherwise, further means of investigation should be carried out by the court to trace potential debtor's assets to attach.
The monetary or non-monetary nature of the obligation to be enforced will determine the way coercive measures will be used by courts.
To enforce judgments ordering payment in monetary obligations when the opposition writ to enforcement is dismissed requires the following court actions.
To enforce judgments related to non-monetary obligations (ordering the defendant to perform certain actions, to refrain from performing such actions or to undo actions already performed), when the opposition writ to enforcement is dismissed, requires the following enforcement actions.
Enforcement proceedings start without hearing the defendant or the debtor object to the enforcement and with an application (ex parte or in audita parte) to enforce the judgment. The application for an enforcement order should be filed before the Court of First Instance, where:
No security for cost is needed when starting enforcement proceedings. The Enforcement Court's order and enforcement application are served together to the defendant, who can oppose it during the following ten business days, on grounds for opposition on final judgments, on provisional judgments and on mortgage enforcements (articles 556, 528, 695 CPA).
The court order declaring the initiation of enforcement proceedings cannot be appealed, only opposed or objected, in order to avoid unnecessary delays. Opposing (objecting) the court order of enforcement takes place before the First Instance Court which dictated the order, and will not stay the proceeding, as a general rule. Only in exceptional circumstances (see 2.5 Challenging Enforcement of Domestic Judgments), is it possible that the court decides to stay proceedings.
When the opposition motion is served to the party seeking to enforce the judgment, fast-track proceedings will take place. The judge will render a ruling within the next five days after the hearing, declaring the following:
This ruling can be appealed but it will not stay the enforcement actions already taken, except in very limited cases, listed in 2.5Challenging Enforcement of Domestic Judgment.
Domestic judgments and judicial decisions are immediately enforceable, as a general rule, regardless of any appeal:
Representation by lawyers and court agents in enforcement proceedings is legally mandatory if the economic value of the enforcement process is over EUR2,000.
Typical Costs Involved
As a general rule, the debtor being target of the enforcement will bear the costs of proceedings for not complying voluntary with the judgment in the term of 20 days after it was rendered and, thereby, forcing the creditor to start enforcement proceedings (Article 539.2 CPA).
Enforcement creditor will only bear the cost of incidental questions (ie, substantiating objections to enforce the judgment by the creditor) in the following cases:
The enforcement debtor will even bear enforcement costs, if payment is made at the time of the request or prior to the dispatch of the enforcement order, unless he or she demonstrates that, for reasons not attributable to him or her, he or she was unable to make the payment before the enforcement creditor lodged the writ of enforcement, according to Article 583 CPA.
Estimated Length of Time
The estimated time to enforce domestic judgments depends on how easily the defendant's assets could be converted into cash money. Attaching the defendant's bank accounts is the easiest and fastest way to pay the debt. Unfortunately, they normally do not cover the total debt and an auction of the defendant's assets will have to be carried out, delaying the payment of the debts, especially if there are third parties who claim ownership of the attached or seized assets (tercería de dominio o de mejor derecho, Article 595 and Article 614 et seq CPA).
Most Efficient Options
The most efficient option consists in seeking enforcement of mortgage notarial deeds. Mortgage enforcement procedures are faster than the common ones. Therefore, it is recommended to the bank seeking enforcement of notarial deeds (ie, first notarial copy of the mortgage deed), to use this option of enforcement, but only if there are no potentially “unfair terms” included in the mortgage contract (clauses of early termination based on trivial grounds of breach of contract, etc).
The post-judgment procedure for determining the defendant's assets is described in Article 590 CPA (judicial investigation of the state of the enforcement debtor).
The defendant's assets must be identified by the judgment debtor in the enforcement claim (Article 549 CPA), but if there are concerns in relation with debtor’s asset whose foreseeable value does not cover the amount for which the enforcement has been ordered, further search and investigation by the court should be required.
At the expenses and request of the enforcement creditor who cannot designate sufficient assets of the enforcement debtor, the court clerk shall issue and order to move proceeding forward (Article 590 CPA). Measures contemplated in the order will consist of the following.
As a general rule, the enforcement court’s orders can be challenged on the following grounds: (i) procedural matters (Article 559 CPA), and (ii) substantive law matters (Article 560 CPA)
These grounds of opposition are different depending on the type of domestic judgment or non-judicial enforcement document:
Common grounds to stay enforcement proceedings based on domestic judgments or non-judicial enforcement documents are as follows:
Specific grounds to challenge provisional judgments (Article 528 CPA): these are the same grounds already listed for final judgments, plus grounds based on the impossibility to reverse the situation created by the provisional enforcement of a judgment which is not final, but potential serious damages could arise when enforcing a provisional judgment (Article 525 CPA). The burden of proof remains on the party seeking to stay enforcement and he or she should provide security to cover any potential losses of the party seeking to enforce the judgment.
Specific grounds to challenge mortgage enforcement proceedings: Article 695 CPA. As a general rule, enforcement proceedings will be not stayed despite the filing of the writ of opposition to enforce the notarial document (ie, mortgage deed). As exception to the general rule, mortgage foreclosure may be stayed when:
Once proceedings are stayed, precautionary measures, such as attaching/seizure assets could be enforced or remain operative if they were already in force.
Rulings on motions to stay enforcement can only be appealed on the following grounds (Article 695.4 CPA):
There are some types of judgments which are unenforceable, as follows.
Provisional judgment are unenforceable in the following matters:
Final judgments are unenforceable in the case of:
There is not a specific judgment debtor register, but it is possible to make a note or inscription in the suitable public registry (Land Property Registry, Public Bankruptcy Registry, etc), declaring the starting of enforcement proceedings. Once the debt is paid (in case of a monetary obligation), the inscription in the registry will be cancelled. To provide evidence to the Property Registrar that the enforcement judgment has been complied with, the defendant needs to provide the appropriate court ruling stating the satisfaction or settlement of the claim.
The principal legal issues relating to enforcing a foreign judgment in Spain depend on the foreign country of issuing of the judgment, because different legal instruments will be applied and, therefore, an automatic recognition and enforcement will or will not be applied.
Automatic Recognition and Enforcement without any Declaration of Enforceability or Exequatur Proceedings for EU Member States (Except Denmark)
General Rule: automatic approval and enforcement without any need of an exequatur, according to Article 36 (recognition), Article 39 (enforcement) and Article 66.2 of EU Regulation No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter, the “Recast Brussels Regulation”) Chapter III, sections 1,2,3 and 4), notwithstanding a potential opposition to the recognition and enforcement of the judgment on the ground of Article 45 of the Recast Brussels Regulation.
For recognition and enforcement of judgments on specific matters not included in the scope of the Recast Brussels Regulation, the following EU Regulations will apply aside from international treaties to which Spain would be a signatory:
Recognition and Enforcement Applicable to Third Countries which are not Members of the EU
Once Brexit will be fully effective, the future recognition and enforcement of judgments between the UK and Spain will be governed by an old bilateral treaty, the Convention on Civil and Commercial Procedure signed in London on 27 June 1929, and for matters not covered by said bilateral convention in the case of UK judgments to be recognised in Spain, by the provisions of law 29/2015 dated 30 July on International Legal Co-operation in Civil matters (hereinafter, the “Legal Cooperation Act”).
We distinguish between judgments coming from EU member countries and from third countries, because EU judgments do not need to be final in order to be enforceable.
Enforcement for EU Judgments
In civil and commercial matters, recognition and enforcement of EU judgments or authentic instruments from members states have the same approach if they had an enforceable nature in the estate member of origin, according with chapters III and IV of the Brussels Recast. No distinction is made depending on the type of judgment. Recognition and enforcement may be suspended according to Article 38 Brussels Recast, if the EU judgment is challenged in the member state of origin.
Enforcement for Third Countries Judgments
No distinction between judgments from third countries is made. They are all considered foreign judgments independently of the state of origin. In order to enforce third-countries judgments, it is required to apply:
In principle, only final judgments coming from third countries are enforceable in Spain. Interim orders dictated by third countries' courts can only be enforced if refraining from enforcement will run against the principle of due process of law (“tutela efectiva”) as provided such foreign measure would have not adopted ex parte.
In the following paragraphs, foreign judgments not suitable to be enforced are listed and categorised, depending on the grounds alleged for refusal of recognition and enforcement.
Categories of EU Judgments
Grounds for refusal of recognition
Despite the automatic recognition of any EU judgments, the refusal to enforce some judgments will be based on the following grounds, according to Article 45 of the Recast Brussels Regulation:
Grounds for refusal of enforcement
According to Article 46 of the Recast Brussels Regulation, enforcement of a judgment shall be refused where one of the grounds of Article 45 is found to exist.
Categories of Third Countries
If no bilateral treaty is applicable, grounds for not enforcing third-country judgments are subject to the provisions of the Legal Co-operation Act.
Grounds for refusal enforcement according to Article 46 of the Legal Co-operation Act are very similar to grounds on Article 45 of the Recast Brussels Regulation. As an additional ground for refusal enforcement, the Legal Co-operation Act includes the following: where Spanish courts have exclusive jurisdiction or, in respect of other matters, if the jurisdiction of the court of origin is not based on a reasonable connection.
As a general rule, declaratory judgments are not enforceable.
Process when Enforcing an EU Judgment
The following are the summarised steps that need to be taken.
Process when Enforcing a Third-Country Judgment
According to Article 44 to 55 of the Legal Co-operation Act, the requirements are very similar to the Recast Brussels Regulation, the difference is based on extra requirements such as a certificate issued by the court of origin declaring the following.
These steps are common in both proceedings. Once the defendant is served, he or she has 30 days to file his or her opposition to enforcement. The defendant can appeal the decision to the Appeal court and to the Supreme Court.
EU judgments by means of application of the Recast Brussels Regulation provide a faster recognition and enforcement proceedings. In the event of an uncontested claim, the fastest option to enforce a judgment is by application of Regulation 805/2004 and not by the Brussels Recast.
In case of EU protective measures, it is faster to apply for the order directly to the addressed court, not by the recognition and enforcement of a protective measure issued by the estate member of origin.
Dealing with judgments of third countries is a longer process due to the need to start a declaration of enforcement proceedings; this is not necessary with EU judgments.
When international or bilateral treaties are silent in relation to judgment enforcement and recognition costs, the CPA's enforcement costs provisions will be applied in accordance with Article 50.2 of the Legal Co-operation Act.
In general terms, costs associated with the enforcement of third country--judgments are higher due to the length of the proceedings, by virtue of the required declaration of enforceability.
Once the defendant is served, he or she has 30 days to file his or her opposition to the enforcement. The grounds for challenging the enforcement of an EU or third-country judgment has been set out in 3.3 Categories of Foreign Judgments Not Enforced. The defendant can appeal the decision to the Appeal Court and to the Supreme Court.
Under Spanish law, and a result of Regulation Rome I on the law applicable to contractual obligations, time limitation for contractual claims will be determined by the governing law of the contract, which can obviously be a law other than Spanish law. The Spanish time limitation for contracts is five years. This substantive limitation will be applicable to judgments coming from EU countries. However, in the case of third-county judgments, bilateral treaties should apply. If there is no bilateral treaty applicable, Article 50.2 of the Legal Co-operation Act provides that the limitation period action to enforce third-country judgments will be governed by the CPA. Article 518 CPA also establishes a five-year limitation period.
Arbitral awards in Spain may be enforced in equal terms as court rulings. It must be noted that arbitral awards cannot be challenged based on substantive reasons (ie, on account of the legal reasoning of the award).
However, arbitral awards may be set aside if the applicant alleges and furnishes due proof that either the arbitration agreement does not exist or is invalid, that the applicant was not given proper notice of the appointment of the arbitrator or of the proceedings, that the award contains decisions on questions not submitted to arbitration, that the dispute is not apt for the settlement by arbitration, or that the award is in conflict with public policy.
Awards may be enforced even when action has been brought to set them aside. Nevertheless, in such scenario, the party may request from the competent court the suspension of the enforcement providing that he or she provides security for the value of the sentence plus damages that stem from the delay.
Spanish legislation does not distinguish between different categories of arbitral awards, and thus the provisions relating to the enforcement of these resolutions are applicable regardless of their nature.
The only arbitral awards which may not be enforced are those that by the nature of their adopted decision are not subject to enforcement. Therefore, arbitral awards which dismiss the case or which merely grant a declaration devoid of material orders may not be enforced.
As it has been explained above, the enforcement of awards may be suspended if the corresponding action to set them aside has been brought forth, and if the interested party provides security for the value of the sentence, as well as damages stemming from the delay resulting from the suspension
In the first place, a claim to enforce the arbitral award must be filed before the lower courts from the place where the award must have its effects. The deadline is set at five years since the arbitral award has been notified, otherwise the action of enforcement may no longer be brought. Spanish Procedural legislation establishes that no enforcement of arbitral awards may be initiated until 20 days have elapsed.
Once the court has examined the request and if it deems that the request meets all the applicable requirements, it dictates that the enforcement procedure be carried out and notifies the affected party.
The affected party may oppose the enforcement of the award within ten days on the grounds that the payment has already been met, or that an agreement between debtor and creditor has been reached. It may also oppose the enforcement in view of procedural defects.
The claimant is subsequently granted five days to allege whatever it deems opportune regarding the opposition, and the Court finally renders its verdict.
We must bear in mind that the enforcement of arbitral awards may only be suspended in very special cases, such as when insolvency proceedings have been initiated before the respective Commercial Court. The enforcement of the arbitral award shall be completed once the creditor has been paid in full.
Unless otherwise agreed by the parties, arbitrators shall decide the dispute within six months of the date of the submission of writ of defence or by the expiration of the time limit for submitting the writ, according to Article 37.2 AL. Arbitration proceedings could be extended for a maximum period of two months, unless agreed on the contrary by the parties.
Arbitration cost will include:
In general terms, grounds for challenging awards (domestic or foreign awards) do not include revision on substantive matters of law applied or the proper applicable law to the arbitration.
Grounds for challenging domestic and foreign arbitral awards are different, as are the actions and procedural rules established to challenge them.
Nevertheless, grounds for challenging foreign awards under the New York Convention 1958 (hereinafter, “NY Convention”) and grounds for challenging domestic awards under the Spanish Arbitral Law Act 2003 (hereinafter, “AA”) are very similar. The aim is to provide flexible enforcement proceedings of foreign awards, due to the undeniable extent and use of the NY Convention.
Foreign awards have the same category as domestic judgments. They are considered to be a similar category of judicial titles, suitable to be enforced, without any exequatur proceedings.
Domestic awards can be challenged in two different ways:
Foreign awards can be challenged thought exequatur proceedings on grounds of Article V of the NY Convention or on grounds established in another international or bilateral treaty ratified by Spain.
Grounds for challenging foreign arbitral awards are split in two different proceedings:
Recognition proceedings are known as exequatur and only final awards are subject to be recognised or enforced.
Once the foreign award is recognised, it could be enforced as a domestic judgment (Article 46.2 AA) under the domestic enforcement procedure established in the Spanish CPA.
Grounds for challenging foreign awards are subject to international treaties and bilateral treaties signed by Spain. The main ones are the following.
The NY Convention is the most commonly used international treaty, due to its natural tendency to facilitate the recognition and enforcement of foreign awards. Therefore, in most of the cases, a foreign award could be challenged in application of Article V of the NY Convention:
The grounds in Article V (2) can be examined ex officio and, therefore, can be examined even if the request for enforcement is unopposed. They are:
Special consideration has to be taken when defining “public policy”. Public policy is an abstract concept linked with national sovereignty and jurisdiction as designed in the domestic Constitution. The Spanish Supreme Court has limited and framed “public policy” as grounds, causing “real and substantive constitutional breach of rights” (lack of impartiality of the arbitrator, lack of reasoning of the award, res iudicata or non bis in idem, etc).
The Spanish Arbitral Law Act 2003 (AA), identifies what legal issues are suitable to be settled by arbitration:
In relation to time limits to challenge the awards, domestic awards should be challenged not later than two months after the notification of the award (Article 41.4 AA). The time limit for challenging foreign awards depends on the specific content of each international treaty signed by Spain. Silence in the NY Convention means that domestic laws are the ones that should be applied to establish the limitation period for challenging or enforcing the foreign award under the NY Convention.
Increased Use of Virtual and Semi-virtual Hearings as a Consequence of COVID-19
The COVID-19 pandemic has boosted the implementation of technological solutions in the legal sector and judiciary both to avoid gathering people in judicial premises and the potential collapse of the court process by cancelling or postponing previously scheduled court hearings.
As a remedy to the above-mentioned problems, different jurisdictions have been forced to embrace virtual hearings as an option to help resolve the present crisis. The extension of the implementation of virtual and semi-virtual hearings has not been homogeneous across the globe. Some jurisdictions have implemented the use of virtual hearings for a wide range of cases, especially in civil jurisdiction, and in very flexible way, giving prevalence to the need to provide expeditious justice over other legal considerations.
In Spain, priority has been given to guaranteeing procedural principles during hearings over expeditious justice if it could risk the right of defence and the requirements of a fair trial. Therefore, virtual hearings are limited to certain types of cases – for example, it is forbidden to use virtual hearings in criminal cases for crimes subject to imprisonment above five years. The defendant must be physically present in court in front of the criminal judge in order to guarantee the right of defence, the right to be heard and the right to a fair trial.
Judgments and/or arbitral awards rendered for certain types of cases using virtual hearings – either wholly virtually (ie, where none of the participants is present in the same room or court premises) or semi-virtually (where, for example, some or all of the witnesses give evidence by video link outside court premises) – will face challenges when it comes to their enforcement in Spain.
Potential grounds for refusal of enforcement of such judgments and/or arbitral awards are the violation of the following procedural principles.
Immutability of the source of evidence
No communication platform to date, no matter how sophisticated, can guarantee that the witnesses or experts during cross-examination are not being assisted or coached by another person, so their declaration may be contaminated.
In order to avoid the court's refusal to enforce such judgments or arbitral awards, evidence should be provided to the enforcement court that the witness has not been assisted by any third party during the cross-examination. A solution could be providing evidence that a camera was positioned behind the witness if the witness has two cameras, or by turning the camera 360º at intervals, to show the whole room when only one camera was used.
Witnesses, while giving evidence, must not consult documents other than those in the agreed electronic bundles
This is difficult to guarantee if the witness is giving evidence out of court premises. Therefore, Spanish courts are reluctant to allow witnesses to give evidence at home, at a barrister's chambers or at a law firm's premises. At present, witnesses give evidence in court in front of the judge.
Right of defence and right to a fair trial
Right of defence could be at risk if technical problems arise during virtual hearings, especially where the internet connection is lost and is not recovered in a reasonable period of time. Relevant technical problems arising during the cross-examination of witnesses are strong grounds to challenge the judgment's and the award's enforcement.
Publicity of courts proceedings (audiencia pública)
Before COVID-19, the public was allowed to attend court proceedings as a general rule, in order to provide evidence of how justice was delivered and with the aim of testing the transparency of the justice system. In order to continue complying with the principle of publicity, courts during virtual hearings should provide passwords and codes for the authorised public attending the virtual hearing. They could have controlled access to the virtual hearing after waiting in “break-out” virtual rooms.
Principle of immediacy or proximity of the judge to the source of evidence provided (witness or expert)
Despite the high definition of TV screens used in virtual hearings, this cannot fully convey the credibility of the witnesses' and experts' reactions during cross-examination.
Therefore, in line with the above-mentioned, it should be taken into account that not all media used in virtual hearings have the same procedural guarantees and not all video-conference systems or platforms are suitable to guarantee compliance with the technical requirements for two-way sound and with the confidentiality requirements established in the Spanish legislation.
Cross-examinations using only an audio system, such as telephone, will not be considered a valid practice. According to the Spanish legislation, it is necessary to transmit the visual image of the person who is being cross-examined.
In Spain, Skype, Teams or Zoom platforms should not be used for virtual hearings, as they are video-conference systems that do not provide safe and secure two-way communication.
At present, only high-quality video-conferencing systems installed in court premises will comply with the requirements of Article 229.3 of the Judiciary Act 1985.
Under the present legislation, virtual hearings cannot take place without the physical presence of at least one participant in the courtroom, since witnesses must be cross-examined in court premises, according to paragraph 48 of the Guide to Virtual Judicial Proceedings issued by the Permanent Commission of the executive body of Judges (CGPJ).
In application of Article 268.2 of the Judiciary Act 1985, the judge could be allowed to connect remotely to the virtual hearing from a location different from the court premises, if the new location can guarantee no interruption in the communications during the virtual hearing. The judge's remote connection is allowed, when it is not possible for him or her to commute to the court premises.
In cases where the judge is not physically present at the courtroom, there will be a dissociation of location between the virtual courtroom (where the judge is physically present) and the physical courtroom. This dissociation of courts of justice is related to the concept of courts as "virtual" public services and not as mere physical "places" where justice is delivered. Justice can be delivered when the judge is connected to the virtual courtroom and not necessarily when the judge is at the physical seat of the court, as advocated by Professor Richard Susskind (IT advisor to the Lord Justice of England and Wales and author of the book Online Courts and the Future of Justice).
Courts understood as “public services” and not mere physical places are achievable using virtual hearings if the configuration of the virtual hearings comply with the procedural principles, technical and security requirements to guarantee data protection. Therefore, a virtual hearing will be a valid alternative only if the judge and the rest of participants can connect remotely, and only if the connection is structured and prepared by the safe and valid video-conference systems already implemented in the Spanish courts.
Judgments and Arbitral Wards Suitable to be Enforced When Rendered Using Virtual Hearings
These are examples of the type of judgments which will probably not face any enforcement challenge if the above-mentioned litigation principles are respected when using virtual hearings:
In accordance with current legislation, it is possible to hold entirely virtual hearings in certain and limited cases, without violating the litigation principles of legality, contradiction, immediacy, intangibility of the source of evidence, publicity, confidentiality and right of defence. Under the following conditions and limitations, judgments and/or arbitral awards rendered by using virtual hearings will be enforceable.
A final consideration
Should the holding of virtual hearings have as its sole objective an improvement in the efficiency of the judicial system, or should it rather be seen as an opportunity to transform it, allowing justice to be dispensed as a service provided in a completely new way? In fact, could the introduction of artificial intelligence (AI) be the ultimate architect of the digital transformation to a justice system without physical courts and even, potentially, without lawyers?
If we were to take something positive out of the COVID-19 crisis, we could highlight the increased use of new technologies in the legal and judiciary sector, which will undoubtedly bring us further benefits in the future.
Finally, this firm's own direct experience in this regard has been very satisfactory, having recently attended several pre-hearings or court management conferences and preliminary proceedings by virtual hearings, which have not required the presence of witnesses, only legal operators (judge, officer and lawyers). In addition, there is the benefit of time and cost-saving for both Spanish and international clients.
The future of justice lies in combining both actions – hearings in-person and virtual hearings – and thereby preserving the fundamental rights of the litigants.