The insolvency system established under Royal Decree-Law 5/2005 applies to interest rate swap agreements if they are subject to a contractual compensation agreement, even when there is only a financial transaction under that agreement. Any claims arising from these agreements that might have accrued after the declaration of insolvency will be charged against the insolvency estate.

This decision focused on determining the nature of the claims arising from interest rate swap agreements arising after the insolvency. First, the court of appeal rejected the comparison with interest argued by the insolvency administration and the possible classification as a subordinated credit. It considered that the purpose of these agreements is not to replace the agreement on interest, even if it were linked to a loan agreement, but to secure the parties’ financial position in view of the changes the rate agreed might undergo in the future. The cause of the agreement was not the remuneration of the capital provided, or to act as a dissuasive measure regarding non- fulfillment or late fulfillment; it aimed to reduce the risks inherent in the fluctuation of interest rates. It was an agreement that was autonomous and independent of the swaps the risk of which it intended to cover. The court added that article 92 IA cannot be interpreted extensively to cover subordinated loans other than those described.

The judgment then referred to the debate resolved by the Supreme Court7 regarding the insolvency classification of these claims. It recalled that the Supreme Court states that these agreements cannot be considered reciprocal because they do not give rise to functionally reciprocal obligations, but only arise for one party. Swaps are a calculation or determination mechanism, and any settlement carried out has no causal relation to those arising in the future for the other party. It excluded application of article 61.2 IA and considered that any claims for settlements after the  insolvency are insolvency claims.

The court of appeal acknowledged the generally established criteria, but clarified that this would only be applicable when the swap is not subject to any contractual compensation agreement under Royal Decree-Law 5/2005. In the case examined, the financial institution provided a financial transaction master agreement aiming to regulate the relations between the parties arising from transactions, including swap transactions. For the court, this agreement fell conceptually within the definition of contractual netting agreement under Royal Decree-Law 5/2005 and, even if the swap were the only transaction in the netting agreement, the insolvency system established under this regulation would apply. Therefore, the existence of a transaction of this  nature  is enough, if it alone results in credit and debit flows subject to mutual netting or offset. Thus, any claims for settlements after the declaration of the insolvency can be classified as claims against the insolvency estate.