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Enforcement

Spain’s instrument of accession to the Convention was deposited with UNIDROIT together with declarations under Articles 52 and 54(2) of the Convention. Other than the classical declaration regarding Gibraltar status under Article 52, the declaration made under Article 54(2) is particular pertinent for enforcement purposes.

According to Article 54(2), “(a) Contracting State shall, at the time of ratification, acceptance, approval of, or accession to the Protocol, declare whether or not any remedy available to the creditor under any provision of this Convention which is not there expressed to require application to the court may be exercised only with leave of the court”. Spain does accordingly declare that all remedies available to the creditor in the Convention may be exercised only with leave of the court. Since the declaration is made at the time of accession to the Convention without ratification of any Protocol, the scope of the declaration has to be further considered.

To solve that asynchronous situation up, all three Protocols[1] provide a rule stating that: “(d)eclarations made under the Convention, including those made under Articles 39, 40, 50, 53, 54, 55,57, 58 and 60 of the Convention, shall be deemed to have also been made under this Protocol unless stated otherwise”. Therefore, the need of leave of the court for the exercise of remedies in case of defaults will be applicable to all further ratified Protocols unless otherwise declared by Spain at the time of ratification, acceptance, accession to, approval of any of the Protocols.

An immediate conclusion that can be reasonably inferred from the aforementioned declaration appears to be that Spain departs from any extra-judicial enforcement of security interests over assets. Even if the categorical statement of the declaration under Article 54(2) does unavoidably implies that, non-judicial enforcement is not nevertheless unfamiliar to Spanish legal system on secured transactions. Contrarily, extra-judicial enforcement proceedings before a Public Notary are contemplated in the legislation regulating non-possessory pledges and mortgages on chattels[2] whose exercise requires no prior agreement between the parties, and, to a certain extent, acknowledged in hire-purchase agreements and leasing contracts too - as well as the effects of Law 5/2015, of July 2, on Voluntary Jurisdiction.[3]

The instrument of ratification of the Protocol has represented the opportunity to clarify the scope of the declaration as further explained below.

A schematic outline of the non-judicial enforcement model in the aforementioned cases may better illustrate its features and its scope. As an example, Article 16 of the Spanish law on Hire Purchase Agreements[4] will be split up in its component parts. Along with the logical affirmation that the creditor is entitled to enforce his/her interest in a declarative proceeding or an executive one before a court in conformity with domestic procedural rules, a special proceeding for hire purchase agreements is provided for. The special enforcement proceeding in case of default can be applied provided that the hire purchase agreement is duly registered in the Registry of Movables according to the official form. In case of default, the creditor is entitled to ask a Public Notary to claim the debtor the fulfilment of his/her obligations.

  • - Within the next three working days after being claimed, the debtor can pay the claimed amount or transfer the possession on the object to the creditor or the designated person for that purpose.
  • - If the debtor neither pays nor delivers the object, a court will order to foreclose the object in an executive proceeding. Should the debtor voluntarily convey the possession of the object, two procedural options are possible. Either the object is sold in public auction under the supervision of a Public Notary; or the creditor decide to satisfy the secured obligations by vesting the ownership of the object without public auction according to the tables values and scale of depreciation indexes included in the contract.
  • - If the value of the object is larger than the amount due by the debtor, the creditor will pay to the creditor the excess. Likewise, if the value of the object is not enough to satisfy the due amount, the creditor will conserve his/her rights against the debtor to claim the remaining debt.

  • [1] Article XXXI Aircraft Protocol; Article XXIX(1) Protocol on Matters specific to RailwayRolling stock, Article XLI Protocol on Matters specific to Space Assets.
  • [2] Articles 86-88 and 95-96, Ley sobre Hipoteca Mobiliaria y prenda sin desplazamiento de pos-esion, of 16 December 1954, published in the Official Bulletin, num 352, 18 of December of 1954.
  • [3] Ley 5/2015 de la Jurisdiction Voluntaria, published in BOE num. 158, 3 July 2015.
  • [4] Ley 28/1998, of 13 of July, de venta a Plazos de Bienes Muebles, published in Official Bulletinnum 167, dated on 14 of July of 1998.
 
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