After foreign entrepreneurs terminate agency contracts, Spanish agents typically assert their compensation rights before the Spanish courts as a customary practice. This claim offers them greater convenience by eliminating the need to rely on lawyers from another country to safeguard their rights.
These agents often believe that the Spanish courts possess jurisdiction due to the second additional provision of the Spanish Law on Agency Contracts, which stipulates that the jurisdiction for actions arising from the agency contract shall correspond to the judge of the agent’s domicile, and any agreement to the contrary shall be null and void. However, this belief is erroneous since this law does not apply to determine international jurisdiction. It is an internal regulation applicable solely to establish territorial jurisdiction within Spanish territory.
On the contrary, the jurisdiction of the Spanish courts is determined by Regulation (EU) 1215/2012, where Article 7 permits the agent to initiate legal proceedings against the foreign entrepreneur in Spain if agency services have been provided within Spain.
What happens if the foreign entrepreneur is not domiciled in the European Union?
Spanish domestic law will govern jurisdiction in such a scenario, as Article 6 of Regulation (EU) 1215/2012 outlines. Specifically, Article 22 quinquies of the Organic Law of the Judiciary is the relevant domestic provision, which grants Spanish courts jurisdiction to adjudicate disputes involving a foreign entrepreneur when the obligation that is the object of the claim has been or should be fulfilled in Spain.
In our case, the agent is seeking payment of specific amounts from the foreign entrepreneur due to the termination of the agency contract. Consequently, this payment obligation becomes the subject of the claim. Therefore, the pivotal question arises as to whether the payment of the sums sought by the agent should be made in Spain or the foreign entrepreneur’s country, as this determination will be crucial in establishing the competence or lack thereof of the Spanish courts. In our assessment, Article 1.171 of the Civil Code answers this question. It specifies that the debtor’s domicile is generally considered the place of payment.
Consequently, considering the foreign entrepreneur as the debtor, we believe the agent’s claim should be honored in the country where the foreign entrepreneur is domiciled.
It would imply that the Spanish courts do not have jurisdiction to hear the legal proceedings. However, it is pertinent to note that some courts maintain a different criterion and may arrive at a different conclusion.
Given the time limitations for challenging the jurisdiction of the Spanish courts regarding the agency contract, the foreign entrepreneur should promptly seek the assistance of a competent professional to analyze the potential lack of jurisdiction of the Spanish courts.
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