Regardless of the fact that the United Kingdom left the European Union in 2020 trade between the UK and Spain is still substantial. The Office of National Statistics (ONS) latest report states that Spain is the UK's eighth largest trading partner accounting for 3.4% of its total trade, amounting to £59.1 billion in the previous four quarters to the end of 2023
Inevitably British businesses will experience unpaid outstanding invoices within that level of trade. The current economic climate being experienced in the UK has put considerable pressure on all companies and recovering any outstanding debts accrued is always an unwelcome challenge.
Giambrone & Partners' highly experienced dispute resolution and litigation lawyers point out that cross-border debt collection between the United Kingdom (UK) and Spain can involve complex legal issues, in the post-Brexit period. The importance of instructing a law firm with a multi-jurisdictional capacity is vital. Giambrone & Partners has offices throughout Spain with English-speaking multi-jurisdictional lawyers.
Gonzalo Butori, a partner, commented "A key factor is which jurisdiction in the original contract between the parties was chosen in the event of a dispute. England and Wales is a very popular jurisdiction due to the fact it is perceived as being unbiased." Gonzalo further pointed out "Cross-border trade should always be supported with carefully drafted robust contracts including clauses aimed at protecting the business should a contentious issue arise. Clauses stating that a form of alternative dispute resolution (ADR) must be followed initially as well as a jurisdiction clause enabling businesses to pre-select the jurisdiction provides some degree of control over a dispute and the way it is to be managed."
If the inclusion of such clauses has been overlooked it may be possible to instruct a cross-border litigation lawyer to approach your debtor in an attempt to negotiate a solution through ADR. This is in the best interests of all parties and will show that you are making all reasonable efforts to attempt to achieve a resolution without recourse to the courts. If a negotiated resolution can be achieved there is a greater chance of preserving the business relationship.
If all steps to resolve the dispute by a negotiated settlement fail, then there the only course of action that remains is to have the matter dealt with through the courts once the applicable law and jurisdiction has been established. A letter before action should be issued providing one last opportunity for the debtor to pay the outstanding debt before court action.
Once a successful court decision has been achieved you are then faced with enforcement of the judgment. Britain's exit from the European Union has made this process significantly more complex and time consuming. Brussels I Regulation (recast) and Lugano Convention ceased to apply. There is more than one approach, enforcement can be achieved either by The Hague Convention on Choice of Court Agreements (2005) or the domestic law of Spain. The Hague Convention, comparable to the Brussels Regulation and both the Spanish and UK courts should honour the jurisdiction clause in the contract and enforce any judgment arising from court action. However, enforcement under The Hague Convention depends on the jurisdiction clause being exclusive.
It is strongly recommended that the enforcement procedure should be managed by experienced expert cross-border lawyers and must followed meticulously as any breaches can result in the judgment being unenforceable and the creditor can be faced with legal costs and no satisfactory conclusion.
Gonzalo Butori acts in a wide range of international and domestic commercial disputes. He has experience dealing with complex, high-value cross-border litigation.He has particular proficiency with regard to dispute resolution and represents claimants and defendants in all jurisdictions on civil and commercial matters and regularly appears at mediation and arbitration hearings. He has acted as co-advocate in international commercial disputes under ICC rules as well as in other Alternative Dispute Resolution (ADR) proceedings.
Gonzalo is recognised for his pragmatic approach and solution-based strategies as well as his robust capacity when pursuing his clients' best interests. When heavy disclosure in foreign languages is required, he develops and delivers technical solutions to ease the cost burden for clients. He has assisted in a number of cross-border transactions involving various EU jurisdictions and achieved successful results. He also specialises in the conflict of laws and jurisdiction. He regularly advises international clients in connection with family and inheritance-related cross-border matters. Throughout his experience, he has dealt with high-value and complex matters both contested and non-contested which have given him valuable exposure and experience.
Gonzalo also leads the Latin America LATAM Desk in London where he assists companies and individuals with interests in the United Kingdom in a wide range of matters from commercial contract disputes to advisory work for businesses wanting to enter new markets. He also assists in the development of the Porto office in Portugal.
In addition to being admitted to practise in England & Wales as a Registered Foreign Lawyer (RFL), Gonzalo is admitted in to practice as an Abogado, a Spanish-qualified lawyer in Spain, as well as Avvocato Stabilito in Italy and divides his time between the London, Barcelona and Naples offices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.