How to proceed with the enforcement of a worldwide freezing order in Spain

Worldwide Freezing Orders (WFO) – also known as "mareva injuctions" or "freezing injuctions" – ordered in civil and commercial matters can be enforced in Spain. However, depending on the State in which they have been issued, its recognition and enforcement will be subject to one or another rule.

1.?Recognition and enforcement of a WFO issued by a Court of a non-EU member: applicable law

The enforcement of a WFO issued by non-EU member Court – as is the case of Australia, United States or United Kingdom – will be governed by the Spanish Law no. 29/2015 of international legal cooperation in civil matters (LCJIC).

1.1. Need for an exequatur proceeding

According to the LCJIC, before enforcing any foreign judgement or decision, the previous obtention of the exequatur (declaration of enforceability) is required.

1.2. Competent court to grant the exequatur

The Spanish competent Court that grants the exequatur is the First Instance Court of the defendants’ residence.

Subsidiarily, the LCJIC provides other applicable jurisdiction forums, such as the Court of the place where the assets owned by the defendant are located; only in the case that these assets have been affected by the WFO.

1.3. The exequatur proceeding

The exequatur proceeding should be initiated by means of a lawsuit by the person who proves that they have a legitimate interest in its obtention.

In the application for exequatur, the applicant may request the enforcement of the WFO and the adoption of enforcement measures against the defendant, but they may not be ordered until the exequatur has been granted.

1.4. Formal requirements and necessary documentation

To obtain the exequatur, the applicant must comply with formal requirements and provide the following documents:

• The original WFO or an authenticated or apostilled copy.
• The document which proves that the WFO was served to the defendant or that it was given in default of appearance (this does not preclude that in certain cases a WFO given ex parte can be recognised and enforced in Spain).
• The document which proves that the WFO is a final decision.
• The translation of all the above documents into Spanish.

1.5. Opposition to the application for exequatur

The defendant may oppose the application for the exequatur within thirty days of its notification, based on the following grounds:

• Contradicting the authenticity of the WFO that is intended to be enforced.
• Requesting the correction of the defendant's summons.
• Contradicting the firmness and enforceability of the WFO.

1.6. Decision of the competent court on the application for exequatur

Once the defendant has opposed the application for exequatur or the deadline for filing an opposition has elapsed, the competent court will issue its final decision.

1.7. Appealability of the exequatur order

The disadvantaged party by the decision on the granting of exequatur may appeal before the Spanish competent Provincial Court.

If the appealed decision has granted the exequatur, the court may require the appellant to provide security to prevent that the appeal be used maliciously with the only purpose to delay the enforcement.?

Against the decision issued by the Provincial Court, the disadvantaged party may file a cassation appeal, which will be resolved by the Supreme Court.

1.8. Enforcement of the WFO

Once the decision declaring the enforcement of the WFO in Spain is final, the applicant may request the competent court to adopt several enforcement measures against the assets of the defendant, such as the preventive seizure of real estate or the retention of the funds it has in their Spanish bank accounts.

1.9. Mandatory intervention of the Prosecutor's Office

The intervention of the Public Prosecutor's Office in exequatur proceedings governed by the LCJIC is mandatory.?

In accordance with the Spanish Constitution, the Prosecutor's Office will control the legality of the exequatur proceedings and will ensure the protection of the public interest.

2. Recognition and enforcement of a WFO in Spain issued by a court of an EU-Member State: applicable law

Ireland is the only EU-Member State in which a WFO can be issued. If the WFO has been issued by an Irish Court, its recognition and enforcement in Spain will be governed by the Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction, and the recognition and enforcement of judgments in civil and commercial matters (the Brussels I bis Regulation).

Although the procedure for the recognition and enforcement of a WFO in Spain provided for in this regulation is very similar to the one regulated in the LJCIC, the procedure regulated in the Brussels I bis Regulation is simpler and faster.

2.1. Application for recognition and enforcement of the WFO under the Brussels I bis Regulation

According to the Brussels I bis Regulation, the applicant may jointly request the competent Court the recognition and enforcement of a WFO in Spain.?Such application must include the following documents:

• A copy of the authentic WFO.
• The certificate of the Annex no. I of the Brussels I bis Regulation.
• A sworn translation of the above documents into Spanish.

2.2. Refusal of recognition and enforcement

The defendant may request the refusal of recognition and enforcement of the WFO in Spain based on the following grounds:

• Recognition is manifestly contrary to public policy under Spanish law.
• The WFO has been given in default of appearance.
• The WFO is irreconcilable with a decision given between the same parties in the Member State addressed.
• The WFO irreconcilable with any earlier judgment given in another Member State or in a third State involving the same cause of action and between the same parties
• In case of conflict of jurisdiction.

2.3.??Decision of the competent court on the recognition and enforcement of the WFO in Spain

If the recognition and enforcement comply with the material and formal legal requirements, the competent Court will issue an Order granting:

• The declaration of the recognition and enforceability of the WFO in Spain.
• The enforcement against the defendant.
• An order declaring that the defendants’ assets mentioned in the WFO are seized.
• A complete patrimonial investigation of the defendants’ assets and rights, like the existing balances in bank accounts, real estate, movable property, salaries, amongst others.

2.4. Opposition to the decision of the competent court on the recognition and enforcement of the WFO in Spain

Whether the Court grants or rejects the recognition and enforcement of the WFO in Spain, the disadvantaged may appeal the decision before the competent Provincial Court.

As provided in the LCJIC, the second instance decision may be appealed by means of cassation appeal before the Supreme Court.

3. Other important issues to consider

In addition to the above, it is important to clarify other relevant questions referred to in both the LCJIC and the Brussels I bis Regulation:

3.1.1. Prohibition of review on the substance of the matter

Like the LJCIC, the Brussels I bis Regulation establishes that the WFO may not be subject to a review as to the substance by the competent Spanish Court in matters of enforcement.

For example, the competent Spanish court cannot refuse the recognition of a WFO on the ground that the court of origin has applied a different rule from the one that would have been applicable according to the Spanish Private International Law rules.

3.1.2. Adaptation of the WFO to the Spanish legal system

As there is no identical order to a WFO in the Spanish legal system, it must be adapted as far as possible to a similar order that has equivalent effects and pursues a similar purpose and interest.

In the Spanish legal system, what most resembles a WFO is the order of "preventive attachment of assets", which may be agreed on in order to ensure the enforcement of decisions on and the delivery of monetary amounts and other assets.

In the Spanish legal system, the most similar order to a WFO is the "preventive attachment order”. This kind of orders are issued to ensure the enforcement of the assets owned by the defendant and their recovery.

?4. Effects of the WFO on the defendants’ assets

A WFO is a precautionary measure consisting of the blocking of assets and the prohibition of performing acts that may alter their ownership (sale, donations) until a final decision is issued.?

Therefore, it is important to note that according to the Spanish Civil Procedure Act, the effects arising from the enforcement of a WFO in Spain can never exceed the provisional seizure of assets. This means that the Spanish competent court cannot order the enforcement against the assets affected by the WFO but can only declare them provisionally seized.

This is an issue that has given rise to many jurisprudential controversies in the field of enforcement of provisional measures. Indeed, some Provincial Courts have annulled enforcement orders issued by Courts of First Instance on the grounds that this exceeds the object of the WFO, as only provisional attachment can be granted.

In any case, although the enforcement of the debtor's assets will only be possible once the final judgment has been issued by the court of origin, the enforcement of the WFO will be an excellent protection measure for the creditor as it will prevent the defendant from distracting and disposing of his assets.