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Litigation

Court system

What is the structure of the civil court system?

The Spanish civil court system may be divided into four levels:

  • At the municipal level, the first instance courts, the courts of peace and certain specialised courts deal with all civil disputes. Civil specialised courts include commercial courts, courts specialised in foreclosure proceedings and Community trademark courts. A single judge sits in all of them. Their judgments may be appealed before the provincial courts. The commercial courts, which are the most relevant specialised courts, hear cases related to insolvency, industrial and intellectual property, antitrust, advertising, transport regulations and class actions under the rules on general terms and consumer protection, among others. They are governed by the same rules as first instance courts except for insolvency proceedings, which have their own procedural rules.
  • At the provincial level, the provincial courts of appeal issue decisions over appeals filed against the first instance and commercial courts’ judgments. They comprise one president and two or more judges. Their decisions are subject to limited review by the Spanish Supreme Court or the High Courts of Justice.
  • The High Courts of Justice have jurisdiction over appeals filed against the provincial courts of appeal’s judgments on regional civil law where applicable (ie, Catalonia). They also have jurisdiction to hear actions to set aside arbitral awards, the appointment and removal of arbitrators and the recognition of foreign arbitral awards or other decisions. The High Courts of Justice are divided into three chambers: civil and criminal; administrative; and social. In the civil and criminal chamber, there is a president of the High Court, a president for the chamber and a number of judges established by the law applicable to each chamber. Their judgments may not be appealed.
  • Chamber I of the Supreme Court hears appeals from the provincial courts in cases of national civil law. There is a president and a number of judges determined by the law applicable to each division. Their judgments may not be appealed, except in some particular cases, and are binding for all lower courts.

Civil litigation proceedings may be divided into ordinary proceedings and special proceedings. Ordinary proceedings are the proceedings by default related to any subject matter whatsoever and any claim exceeding €6,000. Some of the most relevant special proceedings are the following:

  • Oral proceedings for disputes not exceeding €6,000, eviction, unpaid rent, and prohibitory action to protect consumers’ collective and diffused interests.
  • Order for payment procedure, seeking an order for payment of invoices or other documents providing for unpaid amounts. If the debtor challenges the claim, ordinary proceedings will commence.
  • Negotiable instruments: cheques, promissory notes and bills of exchange are subject to expedited proceedings.
  • Recognition of foreign judgments (exequatur), which may be dispensed by European regulations or international treaties.
  • Enforcement of enforceable documents under Spanish law (public deeds, commercial agreements signed by the parties and a commercial broker, recognised judgments and awards, etc).
  • Action to set aside arbitration awards.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

The role of the judge is to apply the law to the case, considering the facts and means of evidence submitted and to decide on the matters brought by the parties. Although, as a rule, judges must act upon request by the parties and are bound by any parties’ agreement, they also act as guardians of public policy and may take or may have to take some decisions relevant to the proceedings ex officio, such as filing a case for lack of jurisdiction or analysing whether there are unfair terms that would prevent an enforceable title from being enforced.

Access to the judicial profession is based on the principles of merit and capacity to perform judicial duties. Entry is possible through any of the three levels that make up the judicial profession: Supreme Court magistrate, magistrate or judge. The first two categories may be accessed by qualified jurists with more than 15 or 10 years of professional experience, respectively. Access to the judicial profession as a judge requires passing an open competition process and theoretical and practical course training in the Judicial School.

Pursuant to section 125 of the Spanish Constitution, juries are only available in some criminal proceedings, so in civil litigation there are no jury trials.

Limitation issues

What are the time limits for bringing civil claims?

The most common limitation periods for bringing civil claims are set out in the Spanish Civil Code. Notwithstanding, there are many exceptions to general terms of limitations set out in the corresponding special rules (eg, IP law, insolvency, corporate law, certain regional rules - ie, Catalonia). The general rule, which applies for personal actions that have no specific time limit, is that the claimant has a five-year period from the date on which fulfilment of the obligation could be requested to submit the complaint. Other relevant time limits laid down in the Spanish Civil Code are:

  • 20-years for foreclosure of a mortgage;
  • one year for civil tort liability; and
  • four years for an action for annulment.

The law distinguishes between limitation and prescription periods. While prescription periods may be interrupted by bringing an action before the courts, by an out-of-court claim or by any act of acknowledgement of the debt by the debtor, limitations cannot be extended. While personal actions, mortgage actions and tort liability are subject to prescription periods, actions for annulment are subject to limitation. This is also the case for the five-year time limit for enforcing awards and other titles. As per the obligations regarded as null and void there is no time limitation.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

Even though, in general, no specific actions are required before bringing civil actions, the Spanish Civil Procedure Act (SCPA) provides for some pre-action instruments, different from interim measures, aimed at preparing the claim, gathering evidence and examining the means of evidence in advance.

Preliminary proceedings

Their purpose is to obtain specific information or documents necessary for the preparation of the proceedings. For example, section 256 of the SCPA sets out that a hearing may be prepared by:

  • an application for the exhibition of the insurance policy by those who consider themselves damaged by an event that may be covered by civil liability insurance;
  • an application for the exhibition of a deed of last will by whomever who consider themselves to be an heir, co-heir or legatee; or
  • an application by a party intending to bring legal action for IP rights for the exhibition of documents or information of the person against whom possible action may be addressed.

Examining evidence in advance

Before the commencement of the proceedings the party intending to initiate them, or any of the parties during the course of the proceedings, may request the court to examine evidence in advance, provided that there is a grounded fear that, due to the persons or state of things, the taking of evidence cannot take place at the usual procedural time (section 293 et seq of the SCPA).

Taking of evidence

Prior to the commencement of any proceedings the party intending to initiate them, or any of the parties during the course of the proceedings, may request the court to adopt measures to preserve things or situations or put on record their actual existence and characteristics to prevent it becoming impossible to carry out the required taking of evidence at the designated time (section 297 et seq of the SCPA).

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

The proceedings start with the filing of a writ of claim drafted in Castilian or another Spanish language. The claimant must include a full description of the facts under dispute, attach relevant pieces of evidence, duly translated into Spanish, and indicate the legal grounds supporting the claim. The claimant’s statement of claim sets the framework of the dispute, which may not be modified after the submission of the statement of defence. Further submission of evidence or inclusion of new relevant facts or legal grounds is only permitted in exceptional circumstances.

After examining the claim, the court clerk issues an order admitting the claim, which includes a preliminary analysis on the capacity of the claimant to take part in legal proceedings, the jurisdiction of the court and the type of proceedings to be conducted. The claim must be personally served on the defendant, either by a court agent of the claimant or the appointed court clerk.

Courts’ caseload is distributed using a rotation system, which courts cannot change. Notwithstanding the above, they have some discretion to set hearings and formal deadlines to issue judgments and other decisions, which are usually extended.

Timetable

What is the typical procedure and timetable for a civil claim?

Ordinary proceedings comprise four stages: filing of a claim (referred to in the previous question); the statement of defence; a preliminary hearing; and a trial.

Statement of defence

By means of the order admitting the claim the defendant is granted a 20-working-day term to answer as from the service of the claim. The statement of defence must also include the factual background of the dispute, the legal grounds and all relevant documents, provided that the exceptions for further submission of evidence and facts applicable to the claimant also apply to the defendant.

The statement of defence may only request the dismissal of the claim or the offset of amounts and must raise any procedural exceptions that would prevent the valid processing of the action, such as:

  • lack of legal standing;
  • lis pendens or res judicata;
  • inappropriateness of the proceedings;
  • a defective claim; or
  • lack of due joint litigation (request that a third party be called as a co-defendant).

It is also possible for the defendant to totally or partially accept the claim at the time of filing the statement of defence. Procedural issues regarding jurisdiction and competence must be raised by filing a preliminary plea within 10 days as from service of the claim. In that event, the 20-working-day term granted to submit the statement of defence is interrupted until the decision on the jurisdiction and competence is issued.

When responding to the claim, the defendant may file a counterclaim if there is a connection between the motions set out in the claim. The counterclaim must meet the same requirements as the claim and the answer to the counterclaim must meet the same standards as the statement of defence.

Preliminary hearing

After the filing of the statement of defence or the answer to the counterclaim a preliminary hearing is held (section 414 et seq of the SCPA). At such hearing the court:

  • asks the parties whether it is possible to settle the dispute. If the parties have reached a settlement, they may ask the court to judicially approve it so as to obtain an enforceable decision;
  • decides on the procedural exceptions raised by the defendant;
  • gives the parties the opportunity to raise additional arguments without changing the subject of the dispute, clarify any plea, add additional complementary pleas and allege relevant facts for the dispute coming out after the filing of their writs (usually subject to narrow interpretation);
  • gives the floor to the parties in order to challenge the documentary evidence proposed by the opposing party in the writ of claim and the statement of defence;
  • requests the parties to establish the facts under dispute. The court may outline the most relevant facts, on the basis of the allegations submitted by the parties in the claim and in the statement of defence;
  • decides on the admission and challenge of the means of evidence to be produced at the trial. The court may point out further means of evidence if it considers that the evidence proposed by the parties is insufficient. Spanish courts are reluctant to order discovery; and
  • sets a date for trial in the event witnesses or experts are to be examined. If only documentary evidence is to be produced, the court may not arrange a date for trial and discretionally order the parties to submit final conclusions (orally or in writing).

Trial

At the trial, the admitted means of evidence are produced, such as the examination and cross-examination of witnesses and experts. Parties will make closing statements. In the event there is evidence that cannot be examined at the trial (eg, a witness cannot attend the hearing), the parties may request the court to set a final hearing to examine that particular piece of evidence.

After producing all admitted means of evidence, the court will issue a judgment, which may be appealed before the provincial court of appeal within 20 working days upon service thereof.

The duration of ordinary civil proceedings at the first instance varies considerably depending on the court’s workload. A time frame of 12 months as from the filing of the particulars of claim could be regarded as a reasonable period of time to obtain a judgment (excluding any possible procedural issues that may lengthen the proceedings).

Case management

Can the parties control the procedure and the timetable?

Even though the timetable is set by the court, notwithstanding some statutory limits, the parties may apply for a postponement of the hearings or a stay of the proceedings under certain circumstances, particularly if they are conducting negotiations to reach a settlement agreement (section 19(4) of the SCPA).

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

There is no general duty to preserve documents and other evidence pending trial in the SCPA. Notwithstanding the foregoing, such duty may be laid down in other laws, such as the tax and corporate regulations or even in certain criminal laws.

The burden of proof usually rests on the claimant, although availability of the evidence for each party will be taken into consideration. There is no obligation to share relevant documents with the other parties so the parties usually decide on the evidence they want to submit to the court. However, at the preliminary hearing the exhibition by the other parties of any documents relating to the matter under dispute may be proposed as evidence. This possibility is strictly interpreted and it is usually far from the discovery procedure. Non-litigant third parties or public bodies may be also required by the court, upon a party’s request, to exhibit particular documents or to answer to specific questions in writing.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Documents and information exchanged between the lawyers and their clients are privileged, as well as the communications between the parties’ legal counsel (there is a right and a duty of confidentiality). Advice, documents and communications exchanged with an in-house lawyer are not privileged.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

As far as witnesses are concerned, it is uncommon and there is no legal regulation on it. Conversely, experts’ reports must be submitted to the court together with the claim or the statement or defence. Should this not be possible (which is usually the case for the defendant given the short time the defendant has to answer to the claim), there is an additional term expiring five days prior to the preliminary hearing or, in the event the issuance of such report is agreed upon at the preliminary hearing, five days before the trial.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Witnesses usually give oral evidence. Experts give oral evidence if requested at the preliminary hearing by any of the parties should the court understand that there are questions addressed in their reports to be clarified or if it is considered appropriate in view of the complexity of the case.

The plaintiff’s evidence is examined first, followed by the examination of the defendant’s means of evidence. In both cases, this must follow the legally prescribed order, which is: (i) examination of the parties, (ii) examination of witnesses, (iii) examination of experts, and (iv) sound or video recording. Counsel are free to ask questions of their own choice and the court then decides whether or not to allow these questions, depending on the relevance and usefulness for clarifying the facts under dispute. The court could also ask questions under certain circumstances laid down in the law. If the legal representatives of the witnesses do not speak Spanish, they can either request the court, with sufficient advance notice, to designate an interpreter or attend the trial with their own interpreter (the latter being the most common option).

Interim remedies

What interim remedies are available?

There is a wide range of interim remedies available in civil jurisdiction. In accordance with section 726 of the SCPA, the main characteristics of interim remedies are:

  • Instrumentality. Precautionary measures are accessorial to the main proceedings they seek to protect. They must be exclusively aimed at guaranteeing the effectiveness of the protection that may be granted in a favourable judgment for the claimant so that such judgment cannot be set back or hampered by any circumstances arising while the relevant proceedings are still under way.
  • Proportionality. It essentially means that a relevant precautionary measure may be replaced by another one, should it prove to be equally effective or less onerous or detrimental for the defendant.
  • Temporary nature. They must be temporary, provisional and may be reviewed by the court that granted it if the circumstances of the case change.

The general test for any interim relief requires compliance with three requirements:

  • Periculum in mora (or danger in delay). The applicant for interim relief must provide the court with reasonable evidence in order to support that if the interim measure is not granted, the main judicial protection would be endangered as a result of the development of the proceedings.
  • Fumus boni iuris (or presumption of sufficient legal basis). The applicant also needs to prove that the main judicial protection sought has a chance of success. In this regard, it is necessary to provide all means of evidence in order to convince the court to issue a provisional and circumstantial judgment favourable to the request, without pre-judging the merits of the main case.
  • Granting a caution. Finally, the applicant must offer the constitution of a caution in order to ensure compensation in a speedy and effective manner for any potential damages that the interim relief may cause to the defendant and that may be claimed after the lifting of the interim measures.

There is no limitation as to the number of interim remedies as long as the interim relief requested complies with the above-mentioned requirements. Some of the remedies specifically referred to in the SCPA are the following:

  • freezing of property;
  • intervention or court-ordered receivership of productive assets;
  • deposit of movable assets;
  • the drawing up of inventories of assets;
  • preventive annotation of ongoing legal actions at the relevant registries, and other relevant annotations;
  • court resolutions ordering (i) cessation of a certain activity, (ii) refraining from certain conducts, or (iii) a prohibition on interrupting certain provisions that have been carried out;
  • the intervention and deposit of incomes deriving from illicit activities; and
  • the temporary deposit of originals, objects or assets allegedly produced under breach of intellectual property rules.

Applications for interim measures are ordinarily submitted together with the main claim. However, they may be exceptionally requested before and after the submission of the claim in main proceedings. They are usually granted after hearing the parties, unless the case is of extreme urgency.

Interim remedies are also available to the parties to an arbitration agreement prior to the arbitration proceedings or to anyone who proves to be a party to the pending arbitration in Spain or, in institutional arbitration, anyone who may have duly filed an application or commission to the relevant arbitral institution, according to their regulations.

Remedies

What substantive remedies are available?

Spanish courts may grant damages, specific performance, or the performance of the obligation in question by a third party, at the defendant’s expense, and issue declaratory judgments confirming or denying the existence of a right. Interest may be payable on judgments ordering payment. Punitive damages are not available in Spanish civil proceedings.

Enforcement

What means of enforcement are available?

Under section 517 of the SCPA, only the following instruments are enforceable:

  • final judgments, court decisions approving or confirming court settlement and arbitration awards of Spanish courts or arbitral courts;
  • certain notarial documents (ie, first demand guarantee, mortgage, pledge);
  • certain securities; and
  • other court decisions and documents which by virtue of the SCPA or another law are enforceable (ie, foreign judgments, decisions and arbitral awards).

Enforcement may involve a request by the plaintiff for the return of a certain amount of money, or the right to ask the defendant to do something or to refrain from doing something:

  • Monetary enforcement. With some exceptions, all movable and immovable property, as well as claims and real state property rights, are subject to enforcement. Some means of enforcement available are attachment of property and rights, preventive attachment entries of real state property and other assets or rights subject to registration, setting up receivership and, particularly, the realisation of the attached assets. This may include the direct handover to the party seeking enforcement of any assets for their nominal value (cash, balances of current accounts, convertible foreign currencies, among others), the disposal of shares, bonds or other securities admitted to trading in a secondary market, judicial or notary public auctions or the disposal through a specialised person or organisation.
  • Non-monetary enforcement. Where an enforceable right should include a penalty or an affirmative or negative obligation or an obligation to hand over something other than an amount of money, the court dealing with the enforcement will require compliance with whatever may be set forth in the enforceable instrument. In the event of disobedience, the court may impose coercive fines, use the aid of public law enforcement forces, or charge the disobedient party with contempt of court.
  • Decisions that are merely declaratory or constitutive judgments are not enforceable. Only decisions that contain a conviction are enforceable. Merely declaratory or establishing judgments (those that create a new legal status, such as divorce judgments) may be registered and modifications may be made in public registries with no need for enforcement to be carried out.

Public access

Are court hearings held in public? Are court documents available to the public?

As a general rule, court hearings are held in public. Exceptionally, for reasons of public policy or of protection of public rights and freedoms, the courts may limit the scope of their publicity, stating the grounds for this decision.

Only the parties and third parties with legitimate interest may have access to the books, files and judicial records that are not restricted, as provided for by law on their exhibition, testimony or certification.

Costs

Does the court have power to order costs?

In Spain, the general rule on litigation costs is that the ‘loser pays’ unless the court reasonably decides that the case was solved with serious doubts about the facts or the applicable law. The party that has been unsuccessful must usually bear all costs that are included under the concept of ‘costas’ (procedural reimbursable costs), as well as the fees of the lawyers or expert witnesses and any other costs reasonably incurred during the proceedings. There is a limit of one-third of the amount of the claim payable for all fees that are not subject to special tariffs (as lawyers’ fees), unless the court declares the recklessness of the party ordered to pay costs. If the upholding or dismissal of the plea is partial, each party shall bear its own costs and the common costs shall be equally shared.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

‘No win, no fee’ agreements are permitted under Spanish law. They were prohibited until 2008, when the Supreme Court confirmed that the prohibition then in force that prevented a client and a lawyer from freely fixing the fees of the latter was a restraint to free competition, and declared any regulation to the contrary null and void.

Third-party funding of litigation is permitted, as well as agreements to share litigation risks. In particular, over the past few years, sales of non-performing loans (mortgage loans and consumer credits) by Spanish financial institutions have become very common. In these contracts of sale, the subject matter may be the acquisition of the full ownership of the portfolio’s loans or of its results. Whether there is an acquisition of the full ownership of the rights of the claim, the buyer will have to communicate the transfer of the credit to the debtor and will have to act as the successor of the seller in the legal proceedings to collect the debt-claims. If the investor only acquires some rights depending on the results of the proceedings, there will be no need to communicate such agreement to the court and it will only have effects between the parties to it.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

Legal expenses insurance is available, including potential liability for an opponent’s costs. Pursuant to the Insurance Contract Act, insurance to cover legal costs must be the subject of an independent agreement and must include the insured person’s right to freely choose the court clerk and lawyer who should represent him or her in legal proceedings.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The collective litigation phenomenon has been a very important part of the legal landscape in Spain in recent years, in particular due to the big impact of some Supreme Court judgments favourable to consumers in 2010.

The statutory rules governing ‘class’ litigation are mainly laid down in the SCPA (referring to consumers’ and users’ rights and to effective equality between men and women) and in the statutory rules about consumers’ and users’ protection.

Although the SCPA does not provide for special proceedings for collective group litigation, it does contain some specific procedural rules.

Thus, on the one hand, ordinary instruments of joinder of claims or proceedings or consolidation of claims provided for by sections 71 to 80 of the SCPA may apply. They allow several parties to jointly claim whether the facts or the basis of the claims are the same. Sections 76(2)(1) and 78(4) specifically refer to the joinder of proceedings brought by consumer organisations seeking the protection of collective and diffuse interests.

And, on the other, there are some specific rules regarding the enforcement of group and diffuse interests of consumers which enable proper collective actions to be taken. For example, section 11 recognises the standing for the defence of the rights and interests of consumers distinguishing between (i) ‘collective’ or ‘group’ interests (referring to consumers or users identified beforehand or easily identifiable) and (ii) diffuse interests, affecting a number of consumers or users not identified or not easy to be identified (section 11(2) and(3) respectively).

The most common remedies are injunctions and actions for damages. Also, there are some specific provisions concerning standard terms in contracts that provide for three particular remedies only available in class actions:

  • injunctions aimed at preventing the defendant from keeping using particular standard terms in its contracts;
  • claims seeking a judgment that orders the defendant to rescind a recommendation to use some standard terms; and
  • actions for the court to declare that a particular clause must be considered a standard term in contracts and be registered in the Registry of Standard Terms in Contracts (available through the Registry of Moveable Goods).

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

The SCPA states that parties may appeal courts’ decisions and court clerks’ decisions negatively affecting them.

In general, any first instance judgments may be appealed before the provincial courts of appeal except for judgments rendered within oral proceedings not exceeding €3,000.

Judgments issued by provincial courts of appeal may be appealed before the Spanish Supreme Court or High Courts of Justice (from the corresponding autonomous community). Notwithstanding, it should be noted that as long as the ordinary jurisdiction does end with the second instance judgment, there is no proper ‘third instance’ in Spain, so appeal proceedings conducted before the High Courts of Justice or the Supreme Court are quite limited. On a general basis, extraordinary legal remedy before the Supreme Court or the High Courts of Justice comprises two kinds of appeals, namely an extraordinary appeal for infringement of procedure and an appeal in cassation:

  • An extraordinary appeal for infringement of procedure must be based on the following grounds:
  • a breach of rules on objective and functional jurisdiction and competence;
  • a breach of procedural rules governing the judgment;
  • a breach of rules governing procedures and safeguards of the proceedings; and
  • a violation of fundamental rights regarding the fundamental right of defence.
  • An appeal in cassation may be only grounded on a breach of the rules that apply to decide on the merits of the case and may be only lodged:
  • where the judgment in the second instance is issued to protect fundamental rights other than those recognised by section 24 of the Spanish Constitution (right of defence);
  • when the amount of the proceedings exceeds €600,000; and
  • where the amount of the proceedings does not exceed €600,000 or the proceedings have been conducted due to their subject matter, provided that in both cases the decision on the appeal has reversal interest.
  • The appeal will be deemed to have reversal interest when the judgment subject to appeal:
  • contradicts the Supreme Court’s case law;
  • decides on points and issues about which contradictory case law from the provincial courts exists; or
  • there is no case law on previous rules with similar content.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

For EU member states, pursuant to Regulation No. 1215/2012 (known as Brussels I Recast), judgments from member states regarding general civil and commercial cases are easily recognised and enforced, without any declaration of enforceability being required. Recognition or enforcement of a judgment may only be refused if:

  • it is contrary to public policy in the member state addressed;
  • the judgment was given in default of appearance, if the defendant was not served with the document that instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him or her to arrange for his or her defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him or her to do so; or
  • the judgment is irreconcilable with a judgment given between the same parties in the state addressed or with an earlier judgment given by another state, if the earlier judgment complies with the requirements for recognition in the member state addressed (sections 45 and 46). The Lugano Convention, ratified by the EU and Switzerland, Norway and Iceland, seeks to achieve the same level of enforcement and recognition between the EU member states and those states.

For judgments other than those referred to above, other EU regulations and international treaties will apply. In the absence of those, the Spanish Act on International Cooperation in Civil and Commercial Matters provides specific rules for proceedings aimed at granting exequatur of final judgments and arbitral awards or, in the event they grant interim relief, if the non-recognition implies the infringement of the right of defence, provided that the other party was heard before adopting it.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

For EU member states, Regulation No. 1206/2001 of 28 May 2001 on cooperation between the courts of the member states in the taking of evidence in civil or commercial matters allows Spanish courts to directly request the competent court of another member state to take evidence or to take evidence directly in another member state.

Spain has signed the Hague Convention of 1970 on the taking of evidence abroad in civil or commercial matters with minor declarations and reservations. In the absence of particular treaties or rules, the Spanish Act on International Cooperation in Civil and Commercial Matters also provides for rules to obtain evidence in other jurisdictions effective in Spain.

Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

Yes. The Spanish Arbitration Act is based on the UNCITRAL Model Law with few changes.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

Arbitration agreements must be in writing in a document signed by the parties or in an exchange of letters, telegrams, telexes or any other means of communication that provides a record of the agreement. There is also considered to be an arbitration agreement when one party alleges its existence and the other does not deny it.

The validity of international arbitration agreements is subject to the requirements established by the rules of law chosen by the parties to govern the arbitration agreement, or the legal rules applicable to the merits of the dispute or Spanish law (section 9 of the Spanish Arbitration Act).

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

The Spanish Arbitration Act provides that parties are free to determine the number of arbitrators as long as there is an odd number. If there is no agreement to that effect, in ad hoc arbitration the procedure agreed upon by the parties will be followed and it if it is not possible to appoint arbitrators by that procedure, any of the parties may request the competent court to nominate arbitrators or to adopt the measures to that effect. In that event, the court will make a list of three names for each arbitrator to be appointed, after which appointment is made by drawing of lots. In institutional arbitration, the rules of the corresponding institution will apply.

An arbitrator may be challenged if there are justifiable doubts as to his or her impartiality or independence or in the event the arbitrator does not fulfil the qualifications agreed upon by the parties.

Parties may agree as to the procedure for challenging arbitrators. In the absence of such agreement, the challenging statement must be made within 15 days from the date the party becomes aware of the acceptance of the appointment or the existence of the circumstances that, from its view, justify said challenge. Unlike the Model Law, the Spanish system does not allow a party whose challenge has been refused to submit the challenge to the courts for review, although it may be brought in the appeal proceedings to set aside the award.

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

Parties are free to agree upon the procedure for the appointment of the arbitrators, as long as the principle of equality is respected. In arbitrations that are not decided in equity, unless otherwise agreed, if there is a sole arbitrator, such person must be a jurist. When the arbitration is to be resolved by three or more arbitrators, at least one has to be a jurist.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

The parties must be treated equally and be given a full opportunity to present their cases. The parties, the arbitral tribunal and, where the case may be, the arbitral institution, have a duty of confidentiality.

Court intervention

On what grounds can the court intervene during an arbitration?

The Spanish Arbitration Act provides that no court will intervene in cases governed by the Act except where so provided under the Act. Section 8 of the Act, under the title ‘Courts competent for assistance and supervision of the arbitration’, sets out the jurisdiction of the judges and courts to provide arbitration support. Thus, while High Courts of Justice have jurisdiction to appoint and remove court-appointed arbitrators, to hear actions to set aside arbitral awards and recognition of foreign arbitral awards and other arbitral decisions (see question 1), first instance courts have jurisdiction to provide assistance in taking of evidence, to adopt interim measures and compulsory enforcement of arbitral awards and other arbitral decisions.

Interim relief

Do arbitrators have powers to grant interim relief?

Yes. Unless otherwise agreed by the parties, arbitrators have jurisdiction to grant interim relief.

Award

When and in what form must the award be delivered?

Unless the parties have provided otherwise, the arbitral tribunal must deliver the award within six months as from the date of the submission of the statement of defence or the expiry of the submission deadline. Unless otherwise agreed, this period may be extended by two months by means of a reasoned decision.

The award must be in writing, signed by the arbitrators and state the reasons on which it is based.

Appeal

On what grounds can an award be appealed to the court?

An award may be set aside only on the following grounds:

  • if the arbitration agreement does not exist or is invalid;
  • if the claimant was not given proper notice of the appointment of an arbitrator or the arbitration proceedings or was unable to present its case;
  • if the arbitral tribunal decides on questions beyond its jurisdiction;
  • if the appointment of the arbitrators or the arbitral procedure did not respect the agreement of the parties or the Spanish Arbitration Act, unless such agreement was contrary to an imperative rule;
  • if the arbitral tribunal decides on questions that cannot be subjected to arbitration; or
  • if the award is contrary to public policy.

The application for setting aside the award must be made before the High Courts of Justice where the award is delivered, and within two months of the date of which the party making the application received the award or, if there was a request for clarification or supplement of the award, since the reception of the decision on that request or since the date on which making a decision concerning that request expired.

The arbitral award has res judicata effect and is only subject to a request for review in accordance with the provisions of the SCPA concerning final judgments. Such a request constitutes an extraordinary remedy to remove the res judicata effect where there are exceptional circumstances that, if they been known at the moment of delivering the judgment or award, may have justified a different decision by the court or tribunal if:

  • new decisive documents are obtained;
  • the award was issued on the grounds of documents declared false in criminal proceedings;
  • the ruling was issued on the grounds of a witness or expert testimony found guilty of false testimony; or
  • the award was rendered through bribery, violence or fraudulent conspiracy.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Domestic awards are enforceable in the same way as court decisions. Pursuant to section 45 of the Spanish Arbitration Act, an arbitral award is enforceable even when an action to set it aside has been filed. In that event, the party against whom the enforcement is requested may apply for the suspension of the enforcement, provided that it offers security for the amount granted in the award, as well as the damages derived from the delay in the enforcement. First instance courts have jurisdiction for enforcement.

Foreign arbitral awards must be recognised in a judicial decision, by means of exequatur proceedings. Section 46 of the Arbitration Act sets forth that the exequatur is to be regulated by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 1958 or by any other international treaty more favourable to its granting. Pursuant to section 8.6 of the Spanish Arbitration Act, the court with jurisdiction to hear the recognition of foreign awards is the High Court of Justice of the region where the party against whom enforcement is sought has its registered office or place of residence or, subsidiarily, where enforcement should take place or the award should produce its effects. No appeal may be filed against the decision on recognition. Jurisdiction for the enforcement of foreign awards relies on the first instance courts pursuant to the aforementioned criteria. Once recognised, the decision will be deemed domestic, so enforcement will be subject to the Spanish law. An appeal may be filed against the decision on the enforcement.

Costs

Can a successful party recover its costs?

Pursuant to section 37(6) of the Spanish Arbitration Act, unless otherwise agreed by the parties, arbitrators must decide as to the costs of the arbitration, including their own fees and expenses and, if appropriate, the fees and expenses of the defence or representatives of the parties, the costs of the services rendered by the institution that administered the arbitration and any other costs derived from the arbitration proceedings (eg, experts’ fees, translations, etc).

Alternative dispute resolution

Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

Mediation and conciliation are the most well-known ADR processes in Spain, which are increasingly common.

Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

ADR cannot be imposed on the parties, although they may agree to submit their dispute to a particular ADR process of any kind before arbitration or litigation.

Miscellaneous

Interesting features

Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

Yes. Since the entry into force of Act 15/2015, of Voluntary Jurisdiction (SVJA), some procedures have been modified (ie, the dissolution of mercantile companies) with the main objective of expediting the proceedings. Although the SVJA is referred to the SCPA in a supplementary manner, there are certain differences in the proceedings of voluntary jurisdiction that are important to highlight. Following our previous example, it should be noted that in the case of a request for the dissolution of a company, the defendant will have only five working days to oppose the aforementioned dissolution. Once the opposition is filed, a hearing is held according to the provisions of section 256 et seq of the SCPA. After the hearing, the judge will render a court order settling the controversy. This court order can be appealed before the provincial court.

Update and trends

Update and trends

Are there any proposals for dispute resolution reform? When will any reforms take effect? (Please also mention any ground-breaking recent cases, etc.)

On 27 May 2017 the Official State Gazette published the Royal Decree-Law 9/2017, transposing into the Spanish legal system Directive 2014/104/EU on antitrust damages actions. Among others, the Royal Decree-Law amends the SCPA, introducing a new section 283-bis that comprises the access to sources of evidence.

Its innovation lies in that claimants and defendants are entitled to request the disclosure of evidence that may be relevant to the case. The petitioner shall present a reasoned justification containing reasonably available facts and evidence sufficient to support the plausibility of its claim for damages derived from a competition law infringement (section 283-bis a (1) SCPA). In addition, the request shall identify the specific evidences or, at least, ‘the relevant categories of evidence, circumscribed as precisely and as narrowly as possible’ (section 283-bis a (2)). In order to avoid any abuse, the SCPA expressly envisages the possibility of the court requiring that the interested party offer a caution before the disclosure can take place.

With respect to the proceedings, the disclosure of documents may be requested in the claim, during the proceedings or even before the action is brought (in this case the applicant will have to submit its claim within 20 working days of the expiry of the evidence period). Then, the person against whom the measure has been requested will be served with it. Afterwards, an oral hearing will take place and the parties are entitled to plead their rights and submit further evidence. An appeal for reversal, with staying effects, can be filed against the decision on applications filed with the claim or during the proceedings and if this request is dismissed, the party may file an appeal at second instance. In the case of decisions on applications filed before the claim, the injured party may appeal to the immediately superior court in order to request the stay of execution of the said decision.

Regarding confidential information that may be disclosed, the courts are entitled to adopt any measures they consider necessary to protect confidentiality. For instance, the courts can restrict the persons allowed to see a piece of evidence or they can protect sensitive information, such as trade secrets, contained in a document. In addition, section 283-bis j provides specific rules regarding the disclosure of evidence contained in a competition authority’s file, as it states that disclosure shall be made ‘only after a competition authority, by adopting a decision or otherwise, has closed its proceedings’. Thus, information that is specifically prepared for the proceedings before the competition authority could not be disclosed until the administrative proceedings end. Lastly, the SCPA also provides a list of evidence that is excluded from this disclosure. For example, the statements made in leniency programmes cannot under any circumstances be ordered to be disclosed. In fact, if a party tries to submit this kind of document, the court is obliged to dismiss it. The SCPA also include measures in the event of an infringement of the confidentiality duties such as the full or partial dismissal of the claim, the declaration of civil liability for the harm caused, the adoption of fines or an order to pay the costs of the proceedings.

It is also worth noting the existence of a proposal to reform the Insolvency Act, through a Consolidated Text. The proposal has not yet been confirmed by parliament’s Codification Commission, so it is not yet possible to determine when this new Consolidated Text will be published.