Hitachi Energy organized a round table with customers on 7 April to discuss current world events and their possible impact on the company.

Ignacio Guillén, from Giménez Torres Abogados, spoke alongside Sven Hoffmann, from Heussen, Germany; David Gu, from JunHe, China; and Philip D’Costa, from Penningtons Manches Cooper, UK, reaching a hearing of 70 Multilaw member lawyers, world-leading network of independent law firms of which Giménez Torres Abogados is a founding member.

FIRST COURT DECISION IN SPAIN. REBUS SIC STANTIBUS

On 25 September 2020 the First Instance Court No. 81 of Madrid passed a judgment adopting precautionary measures in application of the rebus sic stantibus clause.

The doctrine of the rebus sic stantibus clause is a reasonable theoretical construction from an equity point of view but devoid of regulation. It is, above all, a clause of exceptional and extraordinary application.

The fact is that rebus sic stantibus is a Latin expression that can be translated as “things being as they are” and refers to a principle of Law by virtue of which it is understood that the stipulations established in contracts take into account the concurrent circumstances at the time of their conclusion, that is to say, any substantial alteration of these circumstances could modify those stipulations.

However, this clause vigorously clashes with the principle of contractual security, better known as pacta sunt servanda or “the pacts [agreements] are made to be fulfilled”, hence the exceptionality of the clause under consideration.

Consequently, only atypical and extraordinary situations caused by “absolutely unforeseeable circumstances” and resulting in an “exorbitant disproportion between the services provided by the parties” will lead to a loss of contractual security for the purpose of applying the rebus sic stantibus clause, according to the Spanish Supreme Court.

The first judgment passed in Spain in application of this exceptional clause, motivated by the critical economic scenario (as a consequence of the current health emergency situation) settles in a precautionary basis ––before the trial takes place, and in order to preserve the effectiveness of a possible definitive estimation of the claim–– the controversy between: (i) the lessee of a night club whose opening is not permitted from the time of the declaration of the state of alert and until further notice; and (ii) the lessor owner of the night club who did not accept to the lessee’s request to suspend the payment of the rent.

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1. Background

On March 14, the Spanish Government approved the declaration of the state of alarm to deal with the health emergency caused by COVID-19 in Spain, through Royal Decree 463/2020.

This Royal Decree established “the suspension and interruption of procedural periods“, that specified that their calculation “shall continue at the moment the Royal Decree or its extensions end“.

Besides it stated the “suspension of administrative deadlines” and the substantive deadlines (i.e., the corresponding deadlines of the actions and rights that could be affected by the statute of limitations and lapse ––“caducidad” and “prescripción” in Spanish Law).

So far, it seemed clear that the deadlines would be continued when the state of alarm ended, but they would not be restarted.

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On April 28, 2020, the first procedural reform was made to meet the challenge posed by COVID-19 to the Administration of Justice. To this end, the Royal Decree-Law is divided into three chapters; the first dedicated to procedural measures; the second with regard to measures in the field of bankruptcy and corporate; and the third in relation to measures of an organizational and technological nature. We now turn to a summary of the most significant ones.

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Decreto-16-20-medidas-procesales-EN.PDF

Measures in the field of leasing

The self-employed workers and small and mid-sized enterprises (SMEs) that are tenants of buildings intended for (i) use other than as housing or (ii) industry, which meet the requirements set out below, may request from the lessor if and to the extent that the latter is a public housing company or entity or a large holder, a deferment on the payment of rental income. Such deferment must be accepted by the lessor unless the parties had previously come to an agreement in relation to the postponement of the payment of the rental income or a reduction in its amount, in which case the provisions of such prior agreement will apply (art. 1).
The requirements to be met by the beneficiaries of this deferment on the payment of rental income are as follows (article 3):

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– NOTE_ON_ROYAL DECREE-LAW _(leases).pdf

Measures on tax deadlines and tax procedures

Not surcharges applicable for late payment of certain tax debts in the case of COVID-19 financing.

Late payment of tax debts corresponding to tax returns with filling and payment deadline between 20 April 2020 and 30 May 2020 will be considered as paid within the voluntary period and therefore no surcharges for late payment will be required, provided that the following conditions are met:

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– NEW_TAX_MEASURES_ROYAL_DECREE_LAW.pdf

Public service and supply contracts with successive performance of obligations

Those contracts in force at the entry into force of Royal Decree-Law 8/2020, of 17 March, the performance of which becomes impossible as result of COVID-19, will be suspended, in whole or in part, from the time the situation that prevents their performance arises and until such performance can be resumed. It will be understood that performance may be resumed when the contracting authority notifies the contractor the termination of the suspension.

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Measures in the field of Public Procurement.pdf

 

Last Sunday, 29 March, Royal Decree-Law 10/2020 was published in the Official State Gazette – which came into force on the same day – and a few hours later Order SND/307/2020, 30 March, was also published, establishing the interpretative criteria for the application of Royal Decree-Law 10/2020, 29 March, and the model of responsible declaration to facilitate the necessary travels from the place of residence and the place of work.

This Royal Decree-Law contains and specifies the measures that the Government had already announced regarding the suspension of all non-essential economic activity. Thus, workers whose jobs are not considered essential will not have to go to work between Monday 30 March and 9 April 2020.

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– NEWSLETTER GTA RDL 10-2020 RECOVERABLE PAID LEAVE

GIMÉNEZ TORRES ABOGADOS publishes newsletters, from different perspectives, regarding the scope and repercussion of Royal Decree-Law 8/2020, of 17 March, in order to address the economic and social impact of COVID-19.

Trusting that you are all doing well in these difficult times, we continue working and available to our customers.

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