Legislation of the Day: Ecuador To Refuse To Enforce Spanish Mortgages
Posted on December 9, 2011
Nicolás Zambrana Tévar has posted at Conflict of Laws.net on an unusual and maybe ridiculous bill before the Ecuadoran parliament on the recognition and enforcement of foreign judgments. I’ve written before about the SPEECH Act, the new US statute that forbids recognition and enforcement of foreign judgments in defamation cases unless the foreign proceedings gave as least as much protection to free speech rights as the First Amendment. The proposed Ecuadoran law is similar in kind, but not as high-minded. According to Zambrana, it prohibits recognition and enforcement of foreign judgments on debts incurred to buy real property in Spain. Apparently many Ecuadorans purchased property in Spain during the real estate bubble there, and they supposedly did not realize that (as is the case in many but not all US states—contrary to the assumptions of some of the coverage of the Ecuadoran debtors in Spain) the debtor is on the hook for any deficiency after the creditor auctions the property.
I wonder whether this bill was directly related to the recent announcement that Banco Pichincha, an Ecuadoran bank, has purchased a portfolio of mortgage loans in Spain that were originally owned by GMAC?
I don’t know what this bill’s prospects are in the parliament, but if it passes, I wish Ecuadorans with business in Spain good luck in getting any Ecuadoran judgments recognized or enforced there!