ACT 42/2015 AMENDS ARTICLE 1964 OF THE CIVIL CODE (STATUTE OF LIMITATIONS ON ACTIONS)

Act 42/2015, of October 5, reforming Civil Procedure Act  1/2000, of  January  7 ("Act 42/2015" ), amends article 1964 of the Civil Code to reduce from fifteen to five years the statute of limitations for personal remedies for which there is no applicable statute, with the aim to achieve a balance between creditors' interests in claim preservation and the need to establish a time frame for filing causes of action. This article clarifies the residual statute of limitations period (applicable in the absence of a specific statute to the given action), providing it with an extensive and case-spec ific scope of application (for example, regarding breach of contract actions).

A transitional regime was established so that the new rule can apply to actions arising before the date the reform enters into force (October 7, 2015) .

ACT 42/2015 REGULATES THE JUDICIAL ONLINE AUCTION PROCEDURE UNDER THE CIVIL PROCEDURE ACT

Act 42/2015 also affects the regulation of the online judicial auction system introduced into the Civil Procedure Act by Act 19/2015,of July 13, on administ rative reform measu res to the Justice Department and the Civil Register ("Act 19/2015"), and includes some technical clarifications regarding the procedure. This new regime came into force on October 15, 2015.

Main changes to the judicial auction procedure under Act 42/2015:

  1. The auction must be conducted online and through the State Auction Porta l of the Official Gazette of the Spanish State.
  2. Notice of the auction will be published in the Official Gazette of the Spanish State and, for informational purposes, in the State Auction Portal of the Justice Department, at least 24 hours before the start of the period for submitting proposals. The Portal will also provide the edict with the general and special terms and conditions of the auction and property, as well as the value of the property, which will help determine the auction type.
  3. To participate in the auction, a bidder must register in the Portal and set aside by electronic means 5% of the property value. A creditor can participate, as long as there are other bidders, and will not be required to set aside funds for bidding.
  4. The valuation will determine the type of tender. Proposals for an amount higher, equal to, or lower than the highest pre-existing bid will be admitted, although in the latter two cases it is understood that these offers are made as reserve bids in case the winning  bidder does not satisfy the sale price.
  5. Bids can be submitted for at least 20 calendar days from the opening of the auction.

ACT 40/2015 AMENDS ARTICLE 90.1.6 OF THE INSOLVENCY ACT (PLEDGES OVER FUTURE CREDIT RIGHTS)

The 5th Final Provision of Act 40/2015, of October 1, on the Legal Framework for the Public Sector, amends article 90.1.6 of the Insolvency Act, on the treatment of pledges over future credit rights in insolvency proceedings. The amendment took effect on October 22, 2015 .

Interpretation of the unclear drafting of Act 38/20112 has led to widespread debate in doctrine and case law. The new text explicitly refers to pledges over future credit rights and ascribes special privilege status to those with this kind of guarantees, provided (i) the contracts giving rise to the pledged credits are executed before the declaration of insolvency; (ii) if the pledge is ordinary, it is recorded in a public instrument and, if it is a non-possessory pledge, it is registered in the chattel registry; and (iii) in the case of rights derived from concession contracts for public service works or management, the pledge is approved by the contracting authority and published in the Official Gazette of the Spanish State or regional gazettes.