Recognition and Enforcement of Foreign Titles in España

To obtain relevant information about the debtor before initiating the process of recognition and enforcement of judgments, various online sources can be consulted. Among the most useful platforms and websites are:

• Commercial Registry: Provides data on the financial and legal statuts of companies.
• Official State Gazette (BOE by its Spanish acronym): Publishes information on judicial and administrative proceedings affecting individuals and entities.
• Infoempresa: Offers detailed business and financial reports on companies.
• Axesor: A platform that provides risk and solvency reports for companies and the self-employed.
• D&B Reports: Provides business, financial, and business risk information.
• e-Informa: Offers commercial and financial reports of companies and freelancers.

These sources allow a general understanding of the debtor's situation, although the information may not always be accurate or up-to-date at the time of the request. This is particularly true regarding economic data, as financial statements are typically filed seven months after the fiscal year-end, considering that they may be approved by the shareholders' meeting up to six months after the year-end.

Under Spanish law, the recognition of foreign judgments (defined as judgments issued outside the EU) is an essential prerequisite for their enforcement. This process, known as exequatur, ensures that a judgment issued by a foreign court is homologated and has legal effect in Spain.

The exequatur procedure is governed by Law 29/2015, of 30 July, on international legal cooperation in civil matters. According to this legislation, a foreign judgment cannot be enforced directly in Spain without prior recognition by Spanish courts. This recognition involves a formal review of the judgment to verify compliance with the requirements established by Spanish law and applicable international treaties.

The primary requirements for the recognition of a foreign judgment before enforcement include:

• Jurisdiction of the foreign court: The court issuing the judgment must have had jurisdiction under the rules of private international law.
• Notification and right of defense: The parties must have been duly notified and given the opportunity to defend themselves in the foreign proceeding.
• Finality of the judgment: The judgment must be final and conclusive in the country of origin.
• Compatibility with Spanish public policy: The judgment must not contravene Spanish public policy.
• Reciprocity: In some cases, recognition may require reciprocity between Spain and the country of origin of the judgment.

Once an exequatur is granted, the foreign judgment attains the same enforceable status as a Spanish court judgment, thereby enabling its enforcement within Spanish territory.

The recognition process for European judgments in Spain is regulated by Regulation (EU) No. 1215/2012, known as the Brussels I bis Regulation, while for judgments from non-EU countries, Law 29/2015 of July 30 on International Legal Cooperation in Civil Matters (LCJICC, by its Spanish acronym) applies.

The LCJICC has extended its scope to include e foreign interim or precautionary measures, provided two cumulative conditions are met: (i) The measures were adopted following a hearing of the opposing party; (ii) Denial of enforcement would result in a violation of the right to effective judicial protection.

Given the difficulty in proving the second condition, it is recommended in practice to request interim or precautionary measures directly from Spanish authorities under the Civil Procedure Act (LEC, by its Spanish acronym) and, where appropriate, use the foreign resolution as evidence of fumus boni iuris (prima facie case) or even periculum in mora (risk of harm from delay).

The conditions and process for such recognition are detailed below:

• Jurisdiction of the Originating Court: The judgment must have been issued by a court competent under the jurisdiction rules established in the Brussels I bis Regulation.
• Nature of the Judgment: The judgment must pertain to civil and commercial matters. Tax, customs, and administrative matters are excluded.
• Enforceability: The judgment must be enforceable in the Member State of origin. Provisionally enforceable judgments cannot be executed in Spain, even if security is provided.
• Absence of Grounds for Refusal: Recognition cannot be denied unless: (1) It is contrary to the public policy of the requested State or (2) It conflicts with a judgment between the same parties in the requested State or (3) It conflicts with an earlier judgment from another Member State or a third country that meets the conditions for recognition in the requested state.

The conditions and process for such recognition include:

• International jurisdiction of the Originating Court: The issuing court must have jurisdiction under the Spanish private international law.
• Notification and Right of Defense: It is essential that the defendant has been duly notified of the proceedings and given the opportunity to present their defense. Lack of proper notification may constitute grounds for denying recognition. In cases of default by the party against whom recognition is sought, this aspect can become particularly significant.
• Consistency with Spanish Public Policy: The judgment must not be contrary to Spanish public policy. This includes, but is not limited to, constitutional principles and fundamental rights.
• No Pending Litigation or Conflicting Judgment in Spain: No ongoing litigation or conflicting Spanish judgment on the same matter should exist between the parties.
• Reciprocity: In certain instances, reciprocity between Spain and the country of origin may be required.
• Exequatur Application: The process begins with the submission of an exequatur application to the competent Court of First Instance. If the matter pertains to commercial resolutions, the Commercial Courts will have jurisdiction, and in the case of judgments related to insolvency proceedings in Spain, the Spanish insolvency judge will be competent. This application must be accompanied by the original judgment or a certified copy, as well as an official Spanish translation if the judgment is in another language.
• Examination of Documentation: The court will review the submitted documentation to verify compliance with the aforementioned conditions. This includes assessing the jurisdiction of the originating court, the notification of the defendant, and conformity with Spanish public policy.
• Hearing and Resolution: In some cases, the court may convene a hearing to allow the parties to present their arguments before rendering a decision. Ultimately, the court will issue a resolution either granting or denying the exequatur.
• Appeal: The court’s resolution may be appealed before the corresponding Provincial Court (Audiencia Provincial). The decision of the Provincial Court may, in certain cases, be further challenged through cassation before the Supreme Court (Tribunal Supremo).

The length of the process of recognizing foreign judgments can vary significantly depending on several factors.

In general terms, the process of recognition of foreign judgments in Spain may take between six months and two years, although in exceptional cases it can take even longer. It is important to note that these timeframes are approximate and may vary depending on the specific circumstances of each case.

• Case complexity: Cases with multiple parties or complex legal issues may require more time to resolve.
• Debtor cooperation: Debtor non-cooperation can delay the process, especially if multiple objections are raised.
• Court workload: The availability and workload of the competent court can also affect the duration of the process.
• Appeal procedures: If one of the parties decides to appeal the court’s resolution, the process can be significantly prolonged.

The costs associated with this process can vary depending on several factors. The most common costs include:

• Attorneys' Fees: Legal representation is mandatory for these proceedings. Lawyers’ fees can vary greatly depending on the professional’s experience and the complexity of the case.
• “Court agent” fees: In Spain, the intervention of a procurador (that might be translated as court agent, which legally represents the client before the court) is mandatory in most judicial proceedings, and their fees vary depending on the amount in dispute, in accordance with the provisions of the law governing their fees.
• Translation Costs: Translation costs can be significant, especially if the document is extensive or technical and requires a sworn translation.
• Court Costs: If the court imposes legal costs on one of the parties, that party will bear the costs of the process, including the legal fees of the opposing party's lawyers and court agent.

The grounds for opposition may include:

• Public policy: Recognition of the judgment may be refused if it is manifestly contrary to the public policy of the Member State where recognition is sought. This includes situations where the judgment violates fundamental principles of the Spanish legal system, such as fundamental rights and public freedoms.
• Violation of the Rights of the Defence: If the judgment was issued without the defendant being properly represented in the proceedings, recognition may be refused if it is demonstrated that the defendant was not duly served with notice of the claim in accordance with the law, thereby depriving them of the opportunity to mount an adequate defense.
• Conflict with a prior judgment: Recognition may be denied if the judgment is incompatible with a prior judgment rendered between the same parties in Spain.
• Conflict with a Judgment Issued in Another Member State or Third Country: Recognition may also be refused if the judgment is incompatible with an earlier judgment rendered in another Member State or third country involving the same parties and addressing the same subject matter.

Outlined below are the main grounds for opposition in accordance with Spanish regulations: 

• When it is contrary to Public Policy.
• Violation of the Rights to Defense: A manifest infringement of any party's right to defense can serve as grounds for opposition. If the judgment was issued by default, a manifest violation of the right to defense is deemed to exist if the defendant was not properly served with a summons or equivalent document in a timely and regular manner, thus preventing them from defending themselves.
• Exclusivity jurisdiction of the Spanish courts: Recognition may be refused if the foreign judgment relates to matters that fall exclusively within the jurisdiction of Spanish courts. Furthermore, for other matters, recognition may be denied if the jurisdiction of the originating court lacks a reasonable connection to the case.
• Conflict with a prior judgment rendered in Spain or in another State, provided that the latter meets the requirements for recognition in Spain.
• Pending Litigation in Spain: Recognition may also be refused if there is an ongoing case in Spain between the same parties and regarding the same subject matter, initiated before the foreign proceedings.

The LEC establishes a five-year expiration period for enforcement actions based on judgments, beginning from the date the judgment becomes final and no longer subject to appeal. However, does this rule also apply to the enforcement of judgments issued in other countries? Or, conversely, should the enforcement period prescribed by the law of the state where the judgment was issued be considered?

As previously explained, the exequatur procedure is required exclusively for judgments from countries outside the European Union, as judgments issued by EU Member States benefit from automatic recognition under the Brussels I bis Regulation. In such cases, the five-year expiration period applies without difficulty.

Conversely, in cases where the enforcement of a foreign judgment in Spain requires prior exequatur, the five-year expiration period under Spanish law applies both to the filing of the exequatur request (within five years from the date the foreign judgment became final) and to the subsequent enforcement (calculated from the date the exequatur is granted).

This dual temporal framework finds its legal basis in Article 50 of the LCJI. Obtaining the exequatur is an essential requirement for the foreign decision to acquire enforceability comparable to a national decision. Therefore, the calculation of the second five-year period must necessarily begin from the issuance of the order granting recognition.

To streamline this process, Article 54 of the LCJI allows consolidating the  exequatur request and the enforcement request in a single filing. However, enforcement will remain suspended until the exequatur is favorably resolved. This procedural option is particularly useful to avoid the potential complexity of managing two separate expiration periods (exequatur request and judgment enforcement), although submitting both requests separately remains a valid alternative if preferred.

Once a foreign judgment has been recognized in Spain, various enforcement measures can be adopted to ensure compliance. These measures are regulated by the LEC and may include:

• Seizure of assets: Movable and immovable assets of the debtor can be seized to satisfy the debt recognized in the judgment. This includes bank accounts, wages, properties, and other assets.
• Judicial intervention: In certain cases, judicial intervention in the debtor’s businesses or companies may be requested to ensure that revenues are directed toward paying the debt.
• Public auction: Seized assets can be sold through a public auction to generate funds for paying the debt. The auction is conducted in accordance with procedures set out in the LEC.
• Garnishment of Income: The debtor’s income, such as wages or pensions, may be garnished (subject to applicable limits and exemptions) until the debt is fully satisfied.

Nothing prevents the initiation of a recognition procedure, however, the enforceability of the foreign judgment may be suspended when, previously, the bankruptcy of the company subject to conviction has been declared in the foreign judgment to be enforced in Spain. Here are the key points to keep in mind:

• Suspension of Proceedings: In the context of insolvency proceedings, recognition and enforcement of foreign judgments may be temporarily suspended. This is due to the general principle that individual executions are not allowed within insolvency proceedings, which aim to treat all ordinary creditors equally. If the creditor holds a privileged claim, the rules of priority and satisfaction under the Spanish Insolvency Law will apply as outlined below.
• Priority of Claims: Claims recognized in a foreign judgment may be subject to the priority rules established under Spanish Insolvency Law. This means that such claims must be classified and paid according to the ranking of credits as set forth in the Insolvency Law.
• Role of the insolvency Administration: The insolvency administrator has the authority to intervene in the recognition and enforcement process of foreign judgments. This includes the ability to challenge the validity of the judgment or negotiate payment agreements with foreign creditors.

The interaction with insolvency proceedings certainly introduces an additional layer of complexity in the recognition and enforcement of foreign judgments.

The recognition and enforcement of foreign arbitral awards in Spain are mainly regulated by Law 60/2003, of 23 December, on Arbitration, and 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Spain is a signatory.

• Application for Recognition and Enforcement: The application must be submitted to the Civil and Criminal Chamber of the High Court of Justice of the Autonomous Community where the party against whom recognition is sought resides or is domiciled, or where the effects of the award are to be carried out. Subsidiarily, territorial jurisdiction is determined by the place of enforcement or where the arbitral award is to have its effects. Once the award is recognized, the enforcement process begins with the submission of a request to the Court of First Instance of the place where enforcement is sought. The application must include the original arbitral award or a certified copy, as well as the original arbitration agreement or a certified copy.
• Translation of Documents: If the award is not in Spanish, an official translation of the award must be provided.
• Hearing and Resolution: The court may hold a hearing to allow the parties to present their arguments before making a decision on recognition. The court’s decision may be appealed to the Provincial Court (Audiencia Provincial).

Recognition of a foreign arbitral award may be denied on the following grounds, in accordance with Article V of the New York Convention: 

• Incapacity of the Parties: If any of the parties to the arbitration agreement lacked the legal capacity under the applicable law.
• Improper Notice: If the party against whom the award is invoked was not properly notified of the appointment of the arbitrator or the arbitral proceedings, or was otherwise unable to present their case.
• Matters outside the scope of the arbitration agreement: If the award refers to a dispute not covered by the arbitration agreement or contains decisions on matters outside the scope of the arbitration agreement.
• Irregularities in the Composition of the Arbitral Tribunal: If the composition of the arbitral tribunal or the arbitral procedure did not conform to the agreement between the parties or, failing that, to the law of the country where the arbitration was conducted.
• Suspended or Annulled Award: If the award is not yet binding on the parties or has been annulled or suspended by a competent authority of the country where, or under whose law, the award was made.
• Contrariety to Public Policy: If the recognition or enforcement of the award would violate the public policy of the country where recognition is sought or if the subject matter is not arbitrable under Spanish law.