Holtrop S.L.P. blog
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Foreign receivers of a debtor who has assets in Spain may be liable here for any financial loss to the assets of the receivership, unless they can prove they have acted with due diligence. Without a doubt, one of the first duties, if not the first, that will need to be complied with is publication of the foreign judgement. According to article 221.3.2º of the Spanish Insolvency Law, once a foreign insolvency proceeding is opened, the receivers will be under the obligation to request the corresponding annotations in the public registers where the debtor has assets or rights listed.

While the aforementioned duty could seem quite straightforward, practice has proven differently. From Holtrop we have come across a Property Register which at first instance denied inscription of the foreign court decision declaring insolvency, under the mistaken belief that an exequatur procedure was required. Indeed, the exequatur procedure for foreign judgements is mentioned in article 220.1.2º of the Insolvency Law, and in this sense, the mistake is understandable. However, a very important distinction between judgements from member states and judgements of non-member states has to be drawn. While the exequatur procedure will be applicable to the latter, the former shall be recognized and produce the same effects in all other member states without any further formalities. This conclusion stems from article 16 of Regulation 1346/2000 on insolvency proceedings and was confirmed by our appeal before the property register in the Easylife file.

Parallel to the duty to register in the required public registers, we find the duty to publicise the judgement in the Official Gazette. Publicity is not always mandatory, only in the case where the debtor possesses an establishment in Spain, according to article 221.3.1º of the Insolvency Law. In the Interedil Srl case, the ECJ clarified that ‘"establishment" shall mean any place of operations where the debtor carries out a non-transitory economic activity with human means and goods.' To obtain the said publication, the receivers will first need a sworn transition of the judgement with a Spanish apostille. Then, the process can mostly be completed online through the National Agency of the Official Gazette, under section four, named Administration of Justice. Even though publicity is not always required, foreign receivers might nevertheless choose to do so for practical purposes, such as speeding up other actions, or the exact opposite, to deter certain actions. Sure enough, this is what we have seen in a current file we are dealing with (Groenewoud).   

 

As the proceedings of our files progress, keep your eyes open for further posts on dealing with foreign insolvency cases in Spain!