Never say never again: the risks of a misunderstood ‘compliance’ –

By José Antonio Guzmán

Concerning the Judgment of the Provincial Courtroom of Madrid of March 31, 2021 ECLI: ES: APM: 2021: 3710

1.- The events signed a transaction contract by advantage of which they put an finish to their variations and the arbitration process initiated earlier than the ICC of Paris, assuming new and reciprocal obligations. To ensure not solely the precise achievement of those “new obligations” but additionally, with the intention of to not sue once more “by no means once more”, a “penal clause” and a “penalty” had been agreed, the quantity of which (2 million euros) it appeared burdensome sufficient to perform each of the acknowledged aims.

2.- Nonetheless, the “new relationships” ran aground on the first change price and thus, even if the transaction contract acknowledged that the invoices must be paid within the
checking account indicated therein, the administration physique or a senior supervisor delegated by it, refused to pay them, arguing that the checking account the place the cost ought to be made was positioned in Liechtenstein and that compliance causes (reputational, tax, cash laundering) of capitals, and so on.) prevented paying into that account.

3.- Confronted with the shortage of cost as agreed, the injured social gathering filed a lawsuit and claimed the quantity of the unpaid invoices plus the quantity of the penalty supplied within the transaction contract in case of non-compliance.

4.- The primary occasion sentence acknowledged and declared the breach by which the corporate had incurred, because the transaction contract was clear within the sense that the invoices needed to be paid within the checking account indicated therein. Nonetheless, it didn’t condemn the penalty supplied by the events within the agreed legal clause, contemplating it extreme, which led to the suitable enchantment.

5.- The Provincial Courtroom of Madrid, revoking the judgment of occasion, has condemned the non-compliant firm to pay the penalty supplied by the events: two million euros. The Judgment recollects that the criterion of literalness should prevail when the phrases of the contract are clear (artwork. 1281 CCivil) and that the penalty can’t be categorized as extreme if the events themselves have freely and voluntarily agreed to it for that particular case of non-compliance. . And, moreover, being the non-payment, on this case, a principal and whole non-compliance, not partial, or irregular, there is no such thing as a moderation of any form by the Courts (artwork. 1154 Civil Legislation). The Judgment of the Listening to insists on ideas, doctrine and consolidated jurisprudence relating to the autonomy of the need, penal clause and interpretation of contracts. It doesn’t expose any new doctrine, nor does it elevate questions on which there is no such thing as a profuse and intensive jurisprudence. A transparent situation that continues to be, nevertheless, pending for the Supreme Courtroom to say the final phrase, since, as anticipated, the Judgment issued by the Listening to has been appealed in cassation by the social gathering sentenced to cost.

6.- It could be of further curiosity, replicate on some questions. Within the first place, on the non-public duty that the executive physique might have incurred when making the choice to not pay the invoices due within the checking account that the invoices themselves collected, even in opposition to the clear literality of the textual content of the transaction contract and even in opposition to the factors of his personal authorized division, which suggested making the cost in Liechtenstein. It’s well-known (and it doesn’t deserve that we elaborate on it) that one of these funds in “tax havens” they’re completely authorized so long as the reason for the cost is lawful and the Spanish laws are complied with (which is summarized in declaring the cost made to the AEAT and, the place acceptable, to the Financial institution of Spain). The angle of the executive physique of not eager to pay as agreed within the transaction contract, might imply that the corporate has to imagine the cost of a penalty of two million euros.

7.- Social legal responsibility motion clearly seems as essentially the most acceptable channel for the corporate itself to have the ability to compensate for the harm {that a} conviction of such an quantity might entail resulting from negligent habits by its administrative physique. We’ll speak one other day concerning the risk, on this case, of exercising particular person legal responsibility motion in opposition to the directors, however we’ll level out the chance that the negligent habits of the administrator, not eager to pay the invoices within the checking account stipulated within the contract, brought about direct harm, not oblique, or reflection, to the creditor, who needed to provoke a judicial journey within the face of stated refusal.

8.- The final reflection that I wish to level out is the function that regulatory compliance packages and people answerable for their satisfactory execution and supervision play. These hard-working professionals, on whom a substantial load of stress weighs, are so involved concerning the dangers of all types that may befall the corporate, that they will find yourself complicated the primary factor with the accent and, on this means, decided to investigate the fund marine, in case some sudden batrachian arises from the abyssal depths of some e mail account of the corporate or of some regulation provision hidden among the many algae of the sectoral authorized system, they give the impression of being and look boldly down, with out elevating their heads, with out taking off their eyes of his specific “glass backside boat”. In the event that they did, they might most likely understand the scale of the iceberg in entrance of them.


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