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23 December 2008
Unlike other jurisdictions, Spain does not have specific legislation on state immunity. Spanish law provides only that Spanish courts have jurisdiction to decide on disputes taking place within Spanish territory and involving Spanish and foreign nationals. The only exceptions to this are in cases of either immunity from jurisdiction or immunity from enforcement as established in public international law. Notwithstanding this general rule, there are certain exceptions in case law. In general terms, assets belonging to a state which are employed for activities which could qualify as iure gestionis (ie, commercial acts) are not considered to be subject to the immunity of enforcement privilege.(1)
There is a modern trend in public international law in favour of restrictive sovereign immunity. However, while the difference between iure gestionis and iure imperii (ie, acts pertaining to sovereignty) is well recognized, neither court practice nor the opinion of scholars has been able to establish a clear distinction between the two.
The Constitutional Court has considered that the principle of sovereign immunity contained in Spanish law is not absolute and does not grant a state unlimited protection, but protects only its independence and equal rights as regards the state where the execution takes place (the ‘in parem non habet imperium’ principle). Therefore, in general terms, when undertaking an activity in which sovereign immunity is not involved, neither national nor international rules can prevent a court judgment or arbitral award from being enforced. Spanish case law provides that in this case, the constitutional right to have access to court protection would be infringed.
The fundamental problem here is how to determine whether the specific assets which the enforcement is pursuing are not assigned to sovereign activities and are thus under iure gestionis. There is no clear criterion in this regard. Case law establishes that the competent court granting the exequatur should determine whether the assets that are subject to enforcement are assigned to iure gestionis activities. However, it is not necessary for the assets to be directly related to the specific iure gestionis activity which gave rise to the dispute decided in the court judgment or arbitral award being enforced. In addition, the court has established that courts have a duty to carry out the required investigations and to adopt all necessary measures to enforce judgments and, by the same token, arbitral awards rendered against foreign states.(2)
Notwithstanding the above, the court, in a judgment regarding the US embassy, established that in the event of enforcement against a state, it is the state that should provide the court with information evidencing that a certain asset is assigned to iure imperii activities. Therefore, the burden of proof should not rest with the party requesting enforcement.(3) If the enforcing party does not accept the declaration made in this respect by the state, then the court shall decide on its own.
Central banks are also state entities that could be subject to enforcement in foreign states. Two of the most interesting Spanish court decisions dealing with execution against central banks concern the National Bank of Cuba.
In 2000(4) the Madrid Court of Appeals heard a case in which a German company applied for the enforcement of a debt acknowledgement document granted by the National Bank of Cuba before a Dutch notary. The court stated that the bank could not allege immunity of enforcement in its capacity as state bank because it was clear that when granting the debt acknowledgment, it was acting as a private entity and not vested with state prerogatives.
In 2005(5) the same court heard a case in which the enforcing company appealed against a lower court decision denying its request to extend enforcement against the Cuban state, in addition to the enforcement granted against the National Bank of Cuba. The appeal was dismissed on the grounds that under Spanish law it is not possible to enforce a decision against a party other than the party which was originally the subject of the decision.
(4) See Madrid Court of Appeals Decisions AC 2000/2362 and AC 2000/2544, where the court decided on appeals filed by the National Bank of Cuba against orders issued by the lower court which was deciding on the exequatur proceedings.
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