News

CASE LAW REGARDING JOINT AND SEVERAL GUARANTEES.


The recent ruling of 13 April 2016 issued by Supreme Court nº 244/2016 dismissed an appeal for reversal in which the appealing party upheld that the need for the signatures of all the guarantors –three guarantors, one of whom had not signed- could not be regarded as an essential requisite for the existence of a guarantee contract with respect to the two signing guarantors and defendants. The High Court declared “According to the Spanish Civil Code the joint and several guarantee system is founded on the clear consortium-based relationship of the guarantors” projected in the manner of constituting the guarantee, “which implies the need for all the guarantors to sign in order for it to be considered valid”, as otherwise “the special link of severalty does not exist, and consequently, cannot be claimed”.

 

This ruling, along with Ruling no. 808/1996 of 14 October 1996, facilitates a potential basis for case law in relation to this matter.

VALIDATION OF THE ABENGOA GROUP REFINANCING AGREEMENT


Last 6 April 2016, Commercial Court number 2 of Seville issued a decision validating the refinancing agreement signed between Abengoa and its financial creditors.  The decision establishes that the refinancing agreement, which received the backing of creditors representing more than 75% of the Group’s financial liabilities “is limited to extending the maturity of the debtors’ obligations for seven months (..) in order to prevent their financial deterioration and  allocate the income generated by its activity to paying off non-financial credits (in particular, workers) and also reach an agreement to improve the financial conditions of the debtors”. Such improvements include the capitalisation of 70% of the existing debt, deferring the remainder of the debt and the contribution of between 1,500 and 1,800 million euros in additional finance and between 500 and 800 million euros in new guarantee lines.

THE PANAMA CANAL AUTHORITY (ACP) IS OBLIGED TO ASSUME PAYMENT OF PART OF THE ADDITIONAL COSTS INCURRED IN THE CANAL EXPANSION PROJECT


During the final stage of the Panama Canal Expansion Project, the Dispute Adjudication Board (DAB) has once again ruled that GUPC (the consortium awarded the project, which includes the entity Sacyr) is entitled to receive payment of the extra costs incurred in executing the works.

In a decision issued in December 2015, the DAB admitted that GUCP had the right to receive 17.5 million dollars from the ACP for additional costs and delays during the works caused by the strike and the incidents that took place in Panama in May 2014.

In January 2016, in a different decision, the DAB admitted another claim filed by GUPC amounting to 24.60 million dollars corresponding to additional labour costs.

The above amounts are in addition to the 233.4 million dollars the ACP was obliged to pay to GUPC following a prior decision in January 2015 in connection with the poor quality of the basalt that was to be used to build the new Canal road.

ISSUING OF A RULING AGAINST THE IMPROPER COLLECTION OF A “PRIVATE COPYING LEVY”.


On the 20th of October 2015, Commercial Court no. 5 of Madrid issued Ruling nº 76/2015, declaring that the payment of compensation for private copying or “private copying levy” collected from a company by certain author’s rights entities in 2006, 2007, 2008 and 2009 was completely unjustified, since the digital reproduction appliances and media were not purchased “for the purpose of” making “private copies of protected works, but for copying contents” related to the company’s activity. Consequently, the ruling has sentenced those entities to return the amounts paid by the companies which were unduly paid for that concept.

 

THE CNMV (SPANISH SECURITIES MARKET COMMISSION) AUTHORISES A TAKEOVER BID FOR A REAL ESTATE COMPANY LAUNCHED BY A REAL ESTATE INVESTMENT LISTED COMPANY


On 30 October 2015 the Spanish Securities Market Commission (“CNMV”) authorised the Takeover Bid for the purchase of shares in TESTA INMUEBLES EN RENTA, S.A. launched by MERLIN PROPERTIES, SOCIMI, S.A. at the end of August. The bid was launched for 100% of the share capital of TESTA INMUEBLES EN RENTA, S.A., consisting of 153,967,718 shares admitted for trading on the Stock Markets of Madrid and Barcelona and integrated into the Spanish Stock Market Interconnection System. The price offered is 13.54 euros per share and it was fixed by the bidder in accordance with the fair price provisions of article 9 of Spanish Royal Decree 1066/2007, of 27 July, on the takeover bid regulation system. After the termination of the Bid acceptance period, scheduled for 16 November 2015, the Bidder can complete the real estate purchase process initiated at the beginning of June 2015 through the subscription by MERLIN PROPERTIES, SOCIMI, S.A. of a capital increase in TESTA and a purchase and sale agreement for a stake in TESTA hitherto held by its majority shareholder. This is the first time that a company governed by Act 11/2009, of 26 October, on Publicly Listed Real Estate Investment Companies has launched a takeover bid for a company that was not previously subject to that legal system.