Legal Abroad

Recognition of Foreign Judgments in Spain

Introduction

The recognition and enforcement of foreign judgments in Spain is outlined at several levels:

  • Judgments handed down in the context of the European Union, to which the provisions of Regulation EU 1215/2012 (known as “Brussels Ibis” and which originates from the former Brussels Convention of 1968) apply;
  • Judgments handed down by member states of the European Trade Association (EFTA), i.e. Norway, Iceland, Switzerland and Liechtenstein, to which the Lugano Convention applies (which is a replica of the Brussels Convention, with nuances and different versions of application depending on the country);
  • Judgments rendered by states that are not part of the above groups but have signed Convention No. 16 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters of the Hague Conference on Private International Law; and
  • Judgments handed down by states that are not found in any of the above cases.

In this article we are going to deal with the last of the cases, the common system provided for in Spanish law, which is none other than the Law on International Legal Cooperation in Civil Matters (LCJI). This is the procedure that applies to countries such as the United Kingdom.

Decisions that can be recognized

The scope of the LCJI is defined by three elements: the subject matter of the dispute; the date of the request for exequatur and the type of decision. The LCJI applies to the recognition and enforcement of foreign court decisions in civil and commercial matters, including civil liability arising from torts and employment contracts Temporarily, it applies to applications for exequatur after its entry into force, regardless of the date on which the foreign judgment was issued; that is, any exequatur claim filed after August 21, 2015 is subject to the regime of the new Law, even if the foreign judgment had been issued previously.

In principle, only final or final foreign decisions are eligible for recognition and enforcement in the case of foreign decisions arising from voluntary jurisdiction proceedings. The Act includes a definition of final decisions: those decisions adopted by a foreign judicial authority, or another authority having powers equivalent to those of a judicial authority, and against which “there is no appeal in the State of origin”. On the other hand, judgments provisionally enforceable in the State of origin may not be enforced in Spain, even if the person concerned provides security.

The LCJI has also extended its scope of application to foreign provisional or precautionary measuresunder two cumulative conditions: (i) they have been adopted after hearing the opposing party and (ii) the refusal to enforce them entails a violation of effective judicial protection. Given the difficulty of proving compliance with the second condition, for practical purposes, it is advisable to apply for precautionary or provisional measures directly to the Spanish authorities under the Code of Civil Procedure (LEC) and, where appropriate, to use the foreign decision as evidence of the appearance of good law (fumus boni iuris) or even of the risk of insolvency (periculum in mora).

Recognition and enforcement

The LCJI distinguishes between the recognition of a foreign judgment and its enforcement.

The recognition of a foreign judgment means that its effects are enforced. In principle, there are two typical procedural effects of a judgment: its effectiveness as res judicata, positive and negative, and its enforceability. The LCJI provides that the recognition of a foreign judgment, typically its force as res judicata, may be requested principally, through the exequatur procedure, or incidentally. Enforcement in the proper sense, on the other hand, can be carried out only after the foreign judgment has been enforced.

The LCJI is based on the principle of extension of the effects of foreign judgments but adds some nuances regarding their enforceability. A foreign judgment, once recognized, will produce in Spain “the same effects as in the State of origin” (Article 44.3). The solution is the same as that which inspires Community legislation and means that the scope of res judicata of a foreign judgment is set by the law of the State of origin, not by Spanish law. In the case of unknown measures, the law provides for the possibility of adaptation under the principle of functional equivalence.

The enforceability of a judgment is also determined by the law of the State of origin, although the enforcement procedure will be governed by Spanish law. The LCJI expressly resolves the issue of the law applicable to the lapse of the enforcement action. The 5-year period provided for in our LEC also applies to foreign judgments. Consequently, once this period has elapsed, the foreign judgment will not be enforceable in Spain, even if the enforcement action under the law of the State of origin has not yet expired. If, on the other hand, the time limit is shorter under the law of the State of origin, the decision will also not be enforceable, which means that in practice the shorter limitation period prevails: that of Spanish law or that of the law of the State of origin. Revocation under the latter may arise, depending on the circumstances of the time, as a ground for opposition to enforcement or as a ground for refusal of the exequatur for lack of one of its prerequisites.

Grounds for refusal

The LCJI establishes, in accordance with the principle of cooperation, that foreign judgments must be recognized and enforced in Spain unless they incur in any of the grounds for refusal set forth in the law. The cast is taxed: recognition or enforcement cannot be refused on other grounds. The Law also clarifies that the foreign decision may not be subject to review on the merits. And that partial recognition is possible: when the foreign decision rules on several claims, the mere fact that some of them incur in some cause for refusal of recognition will not prevent the recognition of the others.

Thus, the law provides for six grounds for refusal to recognize a foreign judgment:

(a) When it is contrary to public policy

Unlike supranational texts, the LCJI does not require that it be a “manifest” contrariety. However, the underlying principles of the Act mean that this clause is exceptional and, therefore, that in practice the omission is not particularly relevant.

(b) When it has been issued in manifest violation of the rights of defence of any of the parties.

If the judgment has been rendered in default, it is understood that there is a manifest infringement of the rights of defence if the defendant was not served with a writ of summons or equivalent document in a regular manner and in sufficient time to enable him to defend himself.

The Spanish legislature attaches particular importance to procedural public policy and, therefore, establishes its most important aspect, the right of defence, as an autonomous ground for refusal. Foreign judgments that have been handed down in manifest violation of the rights of the defence will not be recognized. And it adds the most common case in practice of infringement of these rights: defective notification. In this case, the Spanish legislator has consciously departed from the European standard and includes the solution of the old Brussels Convention of 1968. If the judgment was delivered in absentia, it can only be recognised if two conditions, one legal and the other factual, are cumulatively satisfied: that there was a regular summons (within the parameters of Spanish law) of the defendant and that it took place in sufficient time to allow him to prepare his defence. In any event, the typical case does not exhaust the scope of the general clause: even if the notification was regular and in sufficient time, there may have been an infringement of the rights of the defence. Or, even if the defendant did not remain in default, there may still have been an infringement of his rights of defence.

(c) When it has ruled on a matter over which the Spanish courts are exclusively competent or, in other matters, if the jurisdiction of the court of origin is not due to a reasonable connection.

The existence of such a reasonable connection shall be presumed when the foreign court has based its jurisdiction on criteria similar to those provided for by Spanish law.

A foreign judgment shall not be recognised where there is no reasonable connection between the dispute and the State of origin of the decision. This will be the case, for example, where such competition has been based on so-called “exorbitant forums”. The legislature also adds a positive and negative specification of that general clause.

The first is based on the idea of bilateralising our forums of direct competition. It is presumed that there is a reasonable connection or linkage provided that the foreign judge has based its jurisdiction on criteria similar to those provided for by Spanish law.

The second is based on the protection of our exclusive jurisdictions: foreign judgments that have ruled on a dispute that was exclusively heard by the Spanish courts will not be recognized. In principle, the wording of the provision is broad enough to include decisions taken in contravention of a clause of exclusive jurisdiction in favour of the courts of Spain or of another Member State. Naturally, foreign judgments that contravene the protection forums established in Regulation 1215/2012 will not be recognised either.

(d) When it is irreconcilable with a judgment rendered in Spain, or

(e) When there is a pending litigation in Spain between the same parties and with the same subject matter initiated prior to the proceedings abroad.

In the first case, the consistency of the legal system is protected, and in the second, the rule of lis pendens. If there is already a judgment handed down in Spain, whether final or not, no foreign judgment that is irreconcilable with that judgment will be recognized. It is irrelevant, for these purposes, whether the foreign judgment is before or after the Spanish one.

Nor will the foreign judgment be recognized if there is a proceeding pending before the Spanish courts, between the same parties and with the same object, provided that it has been initiated prior to the process abroad. If the process here is earlier, the foreign judge is supposed to have accepted the lis pendens exception according to our procedural parameters. If he has not done so, he is sanctioned by refusing recognition of his decision. On the other hand, if the proceedings in Spain were subsequent, it is not possible for this reason (but for any other) to refuse recognition of the foreign judgment. The reason is that, in principle, the Spanish judge should have suspended the proceedings in favour of the foreign judge and the fact that he has continued is an anomaly that cannot prevent the recognition of the proceedings.

(f) When it is irreconcilable with a decision previously issued in another State, when the latter decision meets the necessary conditions for recognition in Spain.

The conflict between a foreign decision and a Spanish decision is always resolved in favour of the latter. The conflict between two foreign decisions, both of which are eligible for recognition in Spain, is resolved in favour of the first in time. In this case, the date of the decision is taken into account, not the date of initiation of the procedure (as, on the other hand, is the general rule in supranational texts).

Procedure

The LCJI distinguishes between the recognition and enforcement of a foreign judgment. Recognition may be applied for principally, through the exequatur procedure, or incidentally, in the context of a pending procedure. The enforcement of a foreign judgment always requires a prior exequatur procedure.

Incidental recognition shall not apply outside the proceedings in which it has been raised and shall not prevent an exequatur, i.e. a principal recognition, of the foreign judgment.

Exequatur is necessary in order to obtain recognition (or a declaration of non-recognition) in the main capacity or the enforcement of a foreign judgment The law determines territorial and substantive jurisdiction, and in particular confers jurisdiction on the insolvency judge for such recognition when the party against whom the exequatur is sought is subject to insolvency proceedings and the foreign judgment has decided on matters within the jurisdiction of the court of the contest. The procedure is adversarial, requires a solicitor and a lawyer, and begins with a statement of claim. The Law provides for appeals and cassation or extraordinary remedies for procedural infringement “in accordance with the provisions of the Code of Civil Procedure”. The intervention of the Public Prosecutor’s Office is maintained in all cases and “for which purpose all the proceedings will be transferred to it”.

In short, in the field of recognition and enforcement of foreign decisions, the LCJI represents an undoubted improvement over the previous regime (that of the old LEC of 1881). The LCJI is generous, which fits well with the need to seek effective judicial protection in the international aspect of people’s lives, which is quite precise in the most substantive aspects (i.e. the reasons for refusal of recognition).