Despite Britain's exit from the EU the latest statistics published by the Government regarding current trading with Spain show that the value of goods and services traded between Britain and Spain in the past four quarters amounted to £34.2 billion. Spain is Britain's 9th largest trading partner with British companies exporting £13.1 billion of goods and services to Spain to the end of quarter three of 2020.
Cross-border trade must be supported with robust contracts incorporating a range of clauses to protect the business, including jurisdiction clauses and alternative dispute resolution clauses (ADR) in the event of a contentious issue arising, allowing you to pre-select the jurisdiction and require the obligation to use a form of ADR to resolve an issue. This provides you with a degree of control over a dispute, by setting out the way it is to be managed and also removes any element of surprise, such as your trading partner litigating in an unusual jurisdiction
The contract should also ensure that settlement terms related to payment of invoices are fair but strict. Cash flow is the life-blood of all companies, outstanding debt can cause even the most successful companies to falter.
In the event of an unpaid invoice due from a Spanish customer and you find yourself facing collecting a debt from Spain, you should always attempt to implement ADR, either mediation or arbitration if you have incorporated ADR clauses in your contract.
Gonzalo Butori, a partner based between the London and Barcelona offices commented "even if you have not included ADR clauses in your contract you should approach your debtor with an offer to mediate or arbitrate to resolve the issue. Being seen to attempt to find resolution before taking court action will show that you making every reasonable attempt to resolve the dispute without recourse to costly and time-consuming litigation" Gonzalo further remarked "Also, resolving the dispute through a negotiated settlement has a better chance of preserving the business relationship. Should ADR prove to be unsuccessful or not be possible, there are a range of options open through the courts to bring about settlement"
If there appears to be no other choice but to embark on litigation, your debtor should receive a letter before action (LBA) setting out the debt and requesting payment within a set number of days – seven or ten are typical – and stating that on expiry of that period of time, a claim will be issued through the court. The claim form will invite your debtor to pay the outstanding amount of file a defence. If your debtor files a defence then the matter will be heard before a court where both parties will present their argument through their legal representative before the judge and the judge will decide the case.
If the judge decides in your favour and the debtor still has not paid the outstanding invoice, Giambrone & Partners' litigation and dispute resolution lawyers will guide and advise you as to the best option to recover your debt, which can include amongst other actions, sending in bailiffs to remove the debtor's possessions to the value of the outstanding amount, issuing a third party debt order or in some cases an attachment to earnings order.
Gonzalo has acted in a wide range of international and domestic commercial disputes. He 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 focus on resolution for his clients as well as his robust capacity when pursuing his clients' best interests. He has assisted in a number of cross-border transactions involving various EU jurisdictions and achieving highly successful results for his clients. He specialises in conflict of laws and jurisdiction.
Gonzalo also leads the Latin America LATAM Desk in London where the focus is assisting companies and individuals from South America with interests in the United Kingdom in a variety of matters including contract disputes as well as assistance for businesses wanting to enter new markets.In addition to being admitted to practice 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.
