The importance of “Rebus Sic Stantibus” clause in a crisis scenario

In times of crisis such as the one Spain is currently facing due to the COVID-19, both personal and commercial circumstances may drastically change without someone or something being able to avoid it; exceptional circumstances during which individuals and companies are prevented from complying with any contractual obligation of any kind they are engaged in. In this scenario, the so-called “rebus sic stantibus” clause becomes important. 

The purpose of this clause is to cope with substantial amendments to conditions that might occur unexpectedly and unpredictably, and that will undoubtedly affect the contracting parties during the validity of the contractual relationship. These amendments, presumably, avert current conditions from those that favoured the contract signing under the agreed terms and make that the fulfilling of obligations and commitments arising from the contract cause extraordinary damages to one of the parties.

The health crisis that we are undergoing might serve us well as an example of substantial amendments to conditions; phenomenon we might observe in the transportation sector (cancellation of maritime line services, cancellation of flights, breach of charter contracts, paralysis of supply chains, suspension of orders, etc.) as well as in many other sectors of industry and commerce, which in general terms have been severely struck since the declaration of the state of alarm. A crisis that has been defined by the World Health Organization (WHO) as an absolutely unpredictable and unavoidable situation.  

In a situation like this, the “rebus sic stantibus” clause might open up possibilites for contract amendments on the basis of articles 7 and 1258 of the Civil Code, among others, in accordance with the requirements of good faith. This clause does not, under any circumstances, have recessive, resolutory or extinctive effects on the contract; the purpose of this clause is to set a framework of renegotiation of conditions of the contract between the parties in order to compensate, to some extent, for the generated imbalance.   

Although the legal regulation does not explicitly recognize this definition, the Spanish jurisprudential doctrine does as it is evidenced by the Judgements delivered by the Supreme Court in the previous national economic crisis. However, this clause does not apply automatically and in order to be able to apply the “rebus sic stantibus” clause, the jurisprudence lays down some essential requirements: 

  • – Extraordinary alteration of circumstances during the validity of the contractual relationship, in contrast to the circumstances existing at the time of the execution of the contract. 
  • A radical change in the obligations assumed by one of the parties that destructs the balance of the services in an exorbitant manner.
  • Everything is produced by the occurrence of absolutely unpredictable circumstances.

As we can observe when analysing the requirements for the application of the clause demanded by the jurisprudence, its historical application has been very restrictive. Nonetheless, the scenario of the economic crisis (for instance, the 2009 crisis) has extended its application since such circumstances may seriously affect the development of contractual relations.

Hence, the Supreme Court in its Judgment No. 214/2019, rec 3204/2016, of the Civil Chamber, First Section, April 5 2019, and in the Judgement No. 455/2019, of 18 July 2019, in order to accept the alleged amendments to contract, stipulates that these modifications must alter the relationship and the provisions of the contract, and must occur in an unpredictable and unavoidable manner. In other words, if the parties have been able to assume expressly or implicitly the risk that something might occur or they had to do so because this risk already existed at the time of executing the contract or it was reasonably predictable, the clause cannot be invoked. Nor can it be invoked in cases where the alteration is within the normal risks of the contract.

Similarly, in its Judgement of the First Civil Chamber No. 156/2020, rec 2400/2017 of, March 6 2020, the Supreme Court stipulates that, in order to be able to apply the clause, the referred contract must have duration equal to or more than one year, must be of a consecutive nature or of deferred execution. In fact, the Court assumes that it is unlikely that, in the case of contracts of less than one year, anything extraordinary and unpredictable, which would create a disproportion between the claims of the contracting parties, might occur. It remains to be seen if this aspect prevails in a situation such as that arising from the COVID-19 crisis. 

In addition to these two criteria, the Supreme Court considers that in order to effectively apply the “rebus sic stantibus” clause, the alleged situation cannot be contemplated or qualified as a habitual, normal or inherent risk or deriving from the contract (Judgement of the SC (Civil) Section 1, S 30-06-2014, rec 2250/2012).

If we analyse the actions of the Spanish Government, we can realize that it is adopting particular measures which seem to be inclined towards the effectiveness of the clause. An example of this is the Royal Decree Law 11/2020, of March 31, which exceptionally authorizes the suspension of electricity, natural gas and oil derivative products invoicing during the period of validity of the State of Alarm. 

As a conclusion in view of this difficult crisis situation that individuals and companies are facing, from AIYON Abogados, we advise to avoid, to the most possible extent, disputes and litigations in a situation that affects us all. Therefore, we recommend to preserve the contractual balance and respect the criteria of equity and good faith that should always underpin the agreements, promoting so the reestablishment of the balance in the relationship. For that reason we advise to foster agreements and negotiations between the affected parties to a contract, who can always count on the expert advice of our team of lawyers in pursuit of a satisfactory conflict resolution.      

AIYON Abogados cooperates with the Master’s programme of the IME (Spanish Maritime Institute)

AIYON Abogados maintains its commitment to cooperate with diverse institutions and associations involved in the progress and application of maritime law in Spain, as well as with Universities and educational institutions engaged in the formation of future professionals of the sector. This is evidenced by our already consolidated relationship with the IME (Spanish Maritime Institute) over the last several years, teaching subjects that belong to our area of expertise.

This year, due to the lock-down, the partners of our Madrid and Bilbao offices, Ms. Verónica Meana and Mr. Mikel Garteiz-Goxeaskoa, gave their annual lecture at the IME through video-conferencing system.  In particular, the lecture was focused on the applicable wreck removal provisions and the Nairobi Convention (not in force in Spain), as well as on the Civil Liability for Carriage of HNS goods regime under the 2010 Convention (still to enter into force).

We hope the students enjoy the lectures in the same way as our partners do, and we are grateful for IME’s support and effort that makes possible that the formation continues also during the COVID-19 crisis.

 

 

Current situation arising from Covid-19, developments in Mobility and Transport

One of the main reasons why the Spanish Government advocates maintaining the State of Alarm is to be able to guarantee restrictions on citizens’ mobility, both in and beyond their territory.

At national level, the Ministerial Order TMA/400/2020, of 9 May, which establishes the conditions to be applied in the first phase of the de-escalation of mobility, was approved. In order to guarantee the mobility of the Canary and Balearic Islands by means of Air Transport, it has been decided, among others, to lift the ban on regular commercial operations between islands, to establish a minimum of daily frequencies, always guaranteeing the safety distance, as well as to keep the Directorate General of Civil Aviation (DGAC) informed.

With regard to Railway Transport, either in suburban trains or in any other state-owned service, it has been agreed to gradually increase it until the effective recovery of 100% of its services and lines.

If we refer to the Maritime Transport of the Balearic and Canary Islands, specifically in the Canary Islands:

1) The disembarkation of passengers from RoRo passenger ships that provide regular services between the Peninsula and the Islands is prohibited, with the exception of drivers on board of ro-ro cargoes.

2) The Autonomous Community of the Canary Islands is authorised to lay down conditions for the provision of regular inter-island services or shipping lines.

3) The following vessels and boats may navigate between ports or points on the coast of the same municipality and nearby inhabited islands

– Those of tourist transport of passengers.

– Those devoted to practical trainings and courses.

– Those used for recreational/sports purposes by their owners or in nautical rentals.

If we focus on the Balearic Islands, and conditioned to guarantee health protection measures:

1) Transport on lines between the Peninsula and the Balearic Islands is authorised.

2) The embarkation/disembarkation of passengers and vehicles is permitted on RoRo passenger ships and passenger ships providing regular services on the inter-island maritime lines of the Autonomous Community.

3) Recreational sailing is permitted between points on the coast of the same municipality and nearby uninhabited islands.

On both islands, the above restrictions shall not apply to state ships or cargo ships, or to ships sailing for humanitarian, medical or emergency purposes.

At international level, three Ministerial Orders have been agreed which directly regulate entry to and exit from the country by the different means of transport (Order INT/396/2020, of 8 May, Order INT/409/2020, of 14 May and Order TMA/410/2020, of 14 May), and a fourth additional one (Order SND/403/2020, of 11 May).

Order INT/396/2020, of May 8, extending internal border controls and maintaining limited access, among others, for Spanish citizens and residents in Spain, cross-border workers, persons traveling for exclusively work purposes. It is important to note that these restrictions will not affect the transport of goods. Under the heading “transport of goods” we must also consider the crew members of ships in order to ensure the provision of maritime transport services and fishing activities, and the aviaiton personnel necessary to carry out commercial air transport activities.

The restrictions set out in this order are complementary to those already established at land borders and at the external borders of ports and airports (originating in countries outside the Schengen area).

Order INT/409/2020, of 14 May, extending the criteria for the application of a temporary restriction on non-essential traveling from third countries to the European Union and associated Schengen countries for reasons of public order and health, as a result of the health crisis caused by COVID-19.

Entry shall be denied on grounds of public policy and public health in connection with the health crisis caused by COVID-19 to any third-country citizen, subject to the proposed exceptions which include habitual residents in the European Union, the Schengen associated States or Andorra, cross-border workers or personnel engaged in transport of goods in the course of their work (ship and flight crews). This shall not apply at the land border with Andorra or at the checkpoint of persons with the territory of Gibraltar.

The Order TMA/410/2020, of May 14, which limits entry to aircrafts and passenger ships restrictions on mobility of citizens through designated points of entry with the capacity to respond to public health emergencies of international importance, updated by Order TMA/415/2020 of May 17, which aims to designate the ports and airports that will be enabled as the only point of entry into Spain, for passenger flights from any airport located outside Spanish territory or for passenger ships or passenger vessels and ROROs that provide a regular line service originating in any port outside Spanish territory (provided that the passengers transported are not the drivers of the road vehicles). Specifically, the airports of “Sevilla”, “Menorca”, “Ibiza”, “Lanzarote-César Manrique”, “Fuerteventura”, “Tenerife Sur”, “Alicante-Elche” and “Valencia”, and the ports of Barcelona, Bilbao, Las Palmas de Gran Canaria, Málaga, Palma de Mallorca, Tenerife, Valencia and Vigo will be operational.

These limitations do not apply to State aircrafts or vessels, aircrafts making stopovers for non-commercial purposes, exclusive cargo flights or vessels, or positional, humanitarian, medical or emergency flights or vessels.

Bearing in mind, in any case, the Order SND/403/2020, of May 11, by which all persons coming from abroad will be quarantined for 14 days after their arrival; order that came into force on May 15.

Maritime transport

With regard to the maritime transport sector, there have been abundant Ministerial Orders and recommendations of the Ministry of Transport, Mobility and the Urban Agenda since the State of Alert was decreed on 14 March. Therefore, we have decided to emphasise two Ministerial Orders, Order TMA/419/2020, of 18 May, and Order TMA/374/2020, of 28 April, for their relevance.

If we delve into its content, the Order TMA/419/2020, of 18 May, which updates the measures in general  management of maritime navigation adopted during the state of alarm  to deal with the health crisis caused by the COVID-19 to the de-escalation process. It presents restrictions on the entry of ships into Spanish ports (i) for cruise ships from any port; (ii) for foreign ships or recreational vessels that do not have their port of stay in Spain (with exceptions).

On the other hand, it regulates the management of ballast water and ship sediments, the procedures to be followed for the transfer of ships, whether for repair or maintenance purposes or for sale and purchase, and the transfer of ships between ports. In addition, in its Single Repeal Provision it repeals certain Orders and modifies Order TMA/258/2020, of 19 March, by rewriting the article on titles whose validity is extended and on inspection activities.

On the other hand, Order TMA/374/2020, of 28 April, which establishes the documentation with which the crew members of the vessels may prove their condition in order to facilitate their movement to ensure the provision of maritime transport services, due to the health crisis situation caused by the COVID-19. The order stipulates the necessary documentation to allow changes of crew in Spain and the return to their countries of residence or boarding another vessel calling at a Spanish port. Specifically:

– Certificate of Competence or Seafarers’ Identity Card or Discharge Book

– Employment agreement or letter of appointment. This documentation shall include at least the name of the vessel and its flag, the port where the vessel is located and the estimated date of embarkation/disembarkation.

Likewise, the Ministry of Transport, Mobility and Urban Agenda has published preventive recommendations to be implemented in maritime passenger stations and on board of the ships for the restart of passenger traffic in order to prevent and minimize the risks of possible COVID-19 infections when passenger traffic is re-established.

Maritime Administration Inspection activities / Administrative Certificates

Due to the exceptional situation generated by COVID-19, the Administration has taken action by extending the validity of certain administrative titles and suspending significant part of its inspection activities.

The titles whose validity is extended if they expire during the State of Alarm are: (i) professional cards and certificates issued to seafarers, as provided for in international conventions and national regulations; (ii) certificates and documents issued to ships governed by international instruments of the IMO, ILO and the European Union; (iii) certificates and documents issued to ships and vessels operating services, as provided for in national regulations; (iv) certificates of maritime training issued to seafarers in accordance with the STCW Convention and health regulations; (v) certificates of medical fitness issued to seafarers in accordance with the STCW Convention and national regulations; (vi) certificates of medical fitness issued to seafarers in accordance with the STCW Convention and national regulations; (vii) fitness certificates expired during the State of Alert.

In addition, the conduct of scheduled inspections and surveys by the Maritime Administration, as provided for in the Regulations on Inspection and Certification of Civilian Ships, has been suspended, unless they result from emergency situations, and the conduct of periodic inspections of foreign ships, with the exception of those to (i) ships subject to a report or notification by another Member State; (ii) ships which cannot be identified in the inspection database; (iii) ships which have been involved in a collision, grounding or stranding on their way to port; (iv) ships which have been accused of violating allegedly the provisions in force concerning the discharge of hazardous substances or effluents; (v) ships which have manoeuvred in an erratic or unsafe manner.

Plan for Transition towards a “New Normality” – RDL 16/2020, of April 28

Within the State of Alarm which continues in force in Spain, a plan for transition towards a “new normality” or “de-escalation” of confinement that currently is living the society and that affects, to a great extent, small and medium-sized companies, was approved last Saturday, April 28.

The plan has been divided into four differentiated phases (from phase 0 to phase 4) that will start on May 4. These phases, as a general rule, will last fifteen days each and will follow a preconceived schedule but, in case of a new resurgence of the pandemic, might be modified or even revoked. In fact, the criteria established by the Government as a marker to advance from one phase into the following one are the health-system capacity, the epidemiological situation of the area, collective protective measures and socio-economic and mobility data. The State of Alarm confers on the central Government power of control over “de-escalation”, although meetings with the Autonomous Communities will be maintained to establish criteria adapted to each area.

If we focus on the area of Administration of Justice, on April 29, the Royal Decree-Law 16/2020 issued on April 28, regarding the procedural and organizational measures to deal with the COVID-19 in the field of the Administration of Justice, was published. The RDL comes in force on April 30 and incorporates:

Impulse to Recover Judicial Activity and Digital Transformation   

With the aim to resume the ordinary court activity and in order to address the expected increase of litigations which will arise as a consequence of the health crisis we are undergoing, the creation of judicial units of cases deriving from the COVID-19 is expected and August 2020 will be, exceptionally and partially, enabled as a working month, being the working period established between August 11 and August 31, excluding Saturdays, Sundays and public holidays.

With this regard, there are several Bar and Procurators Associations (among them the Bar Association of Biscay) that have shown their concern regarding the decision to enable a part of August for judicial practices. In fact, they have already revealed their total opposition to this decision, since they consider that it violates the right to rest, underscoring the implicit sacrifice that this decision will entail for the professionals working in the justice system when there is no evidence that this decision will be efficient against the collapse of the Courts.

Similarly, it will be permitted to assign the regionally appointed Judges preferentially to matters arising from the pandemic. It will also be permitted that the officers of each court, public prosecutor’s office or tribunal perform their duties in other units of the same locality and jurisdictional, and lawyers in the Administration of Justice in training, those who have passed the competitive examination but have not yet joined in the courts as official lawyers, are authorized to carry out substitutions and tasks of reinforcement.

Lastly, the use of digital identification and signature systems in the administration of justice will be enabled and improved to ensure that the procedural management systems of the courts and tribunals allow telework of the professionals and the parties concerned.

Procedural Measures  

After the suspension of the terms and procedural deadlines on March 14, with the necessary exceptions, the RDL determines to restart the calculation of the time limits, not taking into account the time that has elapsed prior to the declaration of the State of Alarm. Therefore, the time limits will be calculated again from the beginning, being the first day of the calculation the first working day following the day on which the State of Alarm ends.

It is also agreed to extend, for a period equal to that determined by law, the deadlines for filing appeals against sentences and other resolutions that end the process and are notified during the suspension of the deadlines established by the RD nº 463/2020 of March 14, as well as those that are notified within 20 working days following the lifting of the suspended procedural deadlines, allowing thus these to be filed in stages. These deadlines will be extended by a period equal to that established for the announcement, preparation, formalization or filing of the appeal in its corresponding regulatory law. The provisions will not apply to procedures whose deadlines were exempted from suspension in accordance with the second additional provision of the RD nº 463/2020 of March 14.

On the other hand, and without prejudice to the preferential nature of other procedures recognized in accordance with procedural laws, the following procedures will be processed in a preferential manner:

  1. – The proceedings or files of voluntary jurisdiction in which the measures referred to in article 158 of the Civil Code are adopted, as well as the special and summary proceedings provided for in articles 3 to 5 of this Royal Decree-Law.
  2. – In the civil jurisdiction order, the processes deriving from the lack of recognition of the legal moratorium on the mortgages of habitual residence and of properties affected to the economic activity by the creditor entity, the processes derived from any claims that could be raised by the tenants due to the lack of application of the legally foreseen moratorium or of the obligatory extension of the contract, as well as the bankruptcy procedures of debtor who is a natural person and that does not have the condition of entrepreneur.
  3. – In the contentious-administrative jurisdictional order, the appeals lodged against the acts and resolutions of the Public Administrations denying the application of the aid and measures legally provided for to relieve the economic effects of the health crisis produced by the COVID-19.
  4. – In terms of social jurisdiction, proceedings for dismissal or termination of contract, those arising from the procedure to declare the duty and form of recovery of working hours not worked during the paid leave provided for in Royal Decree Law 10/2020, of 29 March, which regulates recoverable paid leave for employees who do not provide essential services in order to reduce the mobility of the population in the context of the fight against COVID-19; the procedures for the application of the MECUIDA plan under article 6 of the Royal Decree-Law 8/2020 of 17 March; the procedures for individual, collective or ex officio challenges to temporary employment regulation proceedings on the grounds regulated by articles 22 and 23 of Royal Decree-Law 8/2020 of 17 March; and those for the implementation of distance working or the adaptation of the working conditions provided for in article 5 thereof.

In accordance with the procedural modality of Collective Conflict, claims filed regarding suspensions and reductions in working hours, adapted in application of the provisions of article 23 of Royal Decree Law 8/2020, of 17 March, will be processed, when these measures are applied to more than 5 workers. The representative commission provided for in the labour regulations to mitigate the effects of the COVID-19 in relation to temporary employment regulation proceedings will also be entitled to promote this collective conflict procedure.

In relation to family law, a special and summary procedure will be regulated “ex novo” for the resolution of issues relating to family law directly arising from the health crisis, articles 3 to 5 of the present RDL. It will last throughout the State of Alarm and up to three months after its termination.

With regard to the Civil Registry, a provision is introduced to ensure that marriage files that have already been processed and suspended due to confinement do not have to be processed again (the idea is that people who have planned their wedding and have not been able to celebrate it will not face further delays. In other words, the “vacatio legis” of Law 20/2011 of 21 July on the Civil Registry is amended and extended until 30 April 2021.

Increase of Bankruptcy Proceedings in Commercial Courts

With regard to the bankruptcy and corporate area, new measures are added to those already adopted by the Royal Decree Law nº 11/2020 of 31 March, with three objectives: a) economic continuity of companies and professionals and the self-employed, b) to encourage the financing of companies to meet their temporary need for liquidity c) to avoid the collapse of the Commercial Courts.

The measures adopted are as follows:

  1. – The duty to request the opening of the liquidation phase is postponed when, during the term of the agreement, the debtor becomes aware of the impossibility of complying with payment commitments and obligations contracted after the approval of the agreement.
  2. – The modification of the agreement or the extrajudicial payment agreement or the approved refinancing agreement is facilitated. In addition, the filing of a new application is permitted without the need for a year to elapse from the filing of the previous application.
  3. – Claims arising from financing commitments or the provision of guarantees by third parties are classified as claims against the estate in the event of liquidation. The claims of persons especially linked to the debtor in insolvency proceedings that may be declared within two years of the declaration of the State of Alarm shall be classified as ordinary claims.
  4. – A series of rules are established to speed up the bankruptcy process.
  5. – The suspension of the duty to apply for a declaration of bankruptcy is extended until 31 December 2020.
  6. – It is foreseen that for the purposes of the legal cause for dissolution due to losses, those of the current financial year will not be taken into account.
  7. – Article 43 of Royal Decree Law 8/2020 of 17 March is repealed.

Safety at Work

During the term of the State of Alarm and up to 3 months after its end, the celebration of procedural acts is established through the telematic presence of the intervening parties to guarantee the protection of health and minimize risks. However, in the Criminal Jurisdictional order, the celebration of trials by means of telematic presence is excluded in the cases of procedures for serious crimes, in which the physical presence of the accused is necessary.

Likewise: (i) public access to all oral proceedings is limited; (ii) the public will be served by telephone or e-mail and, only if necessary, in person but always by appointment; (iii) medical – forensic reports may be made on the basis only of the existing medical documentation available to them; (iv) lawyers are exempted from  wearing of togas in public hearings; (v) morning and afternoon sifts are established to prevent overlapping of workers, which allows trials and hearings to be held not only in the morning but also in the afternoon.

In a nutshell, this Royal Decree Law 16/2020, of April 28, extensively develops, with a relatively sound approach, diverse areas which are of vital importance for the impulse and development of tasks related to justice and which, undoubtedly, will lead to recovering normality as soon as possible.

The Spanish Congress of Deputies authorized a new extension of the State of Alarm until the 26th of April

At the last plenary session, the Congress of Deputies authorized the extension of the State of Alarm enacted in the Royal Decree 463/2020 of March 14th, which declares the state of alarm to manage the health crisis situation caused by COVID-19. 

This extension will be prolonged until 00:00 hours on Sunday April 26th and will maintain the same conditions established in the Royal Decree 462/2020 of March 14th, but it is subject to further extensions if necessary.

The Government has also decided to extend the controls at the land borders with France and Portugal for a further 14 days. The extension will be in force until midnight on Saturday April 25th.

With regard to the last 15 days, some differences can be observed with respect to the conditions and restrictions to which we are subjected. For example, transport recovered, since Monday 13th, the service level of the second week of confinement, established by Order 273/2020 of the Ministry of Transport, Mobility and Urban Agenda of March 23rd, which issued instructions for the reduction of passenger transport services. On the other hand, the Ministry of Justice, the General Council of the Judiciary, the Public Prosecutor’s Office and the Autonomous Communities agreed to maintain essential services in the Administration of Justice. The telematic presentation of documents, limited since March 18th, will be authorized from today, April 15th. 

Despite this, each competent authority in each Autonomous Community will specify which documents can be submitted telematically. For example, in Biscay, the distinguished Lawyers Association of Biscay has specified that its telematic platform “JUSTIZIASIP” does not allow, for the time being, the submission of initial documents of a procedure; thus only documents relating to legal proceedings already in progress that are not linked to interrupted or suspended terms or deadlines may be submitted, until they give rise to procedural actions that initiate procedural time periods that must be suspended. 

To ensure the proper functioning of the Administration of Justice during the state of alarm, in addition to determining staffing levels of headquarters and courts to cover essential services and those that are available, the following provisions have been adopted, among others:

– Registration of births and deaths in the shortest possible time, as well as the management of non-essential services of the Civil Registry (as far as the resources permit it). 

– Registration of documents submitted electronically to the judicial and public prosecutor’s offices and their distribution to the competent judicial bodies. This shall not affect the suspension of procedural deadlines. 

– Services that are considered essential will be provided. 

– Management of all non-essential procedures, as far as the resources permit. 

This decision shall not affect the fact that the procedural time bar, as well as the prescription and expiration time bar, remains suspended.

News about the State of Alarm in Spain (April 6th, 2020)

On April 4th, the President of the Spanish Government announced his intention to request the Congress of Deputies to agree to the extension of the State of Alarm for at least 15 days more. Therefore the State of Alarm, enacted on March 14th, will be maintained until midnight of April 25th.

His petition seems to have the support of the leaders of the rest of the political forces in the State; nevertheless, the extension will not be made official until it is approved by the Congress of Deputies at the forthcoming plenary session scheduled for April 9th.

However, and as the President Pedro Sánchez has already announced, the extension of the State of Alarm does not necessarily imply the extension of the suspension of non-essential activities, a suspension tackled in our publication of April 2 (RDL 10/2020 of March 29th – Suspension of Non-essential Activities) that, since these restrictive economic measures were made public, has received a lot of criticism and pressure to analyse its possible moderation or suppression. Both on part of the industries that asked to maintain their essential activities in order to prevent the total economy freeze, and the political forces in the country. Therefore, and depending on the decisions made by the Government, these non-essential activities might be reactivated from April 9th. 

As we have seen, during the three weeks of the State of Alarm that we have already undergone in Spain, this situation is having an enormous impact on all social and economic sectors in Spain and, in particular, the sectors of industry, commerce and trade, and a part of the transportation sector have been severely hit by this situation.

 

FISHERIES SECTOR 

The Ministry of Agriculture, Fisheries and Food published Order APA/315/2020 of April 1st in the BOE (Official State Gazette). This Order establishes new criteria for the management of fishing quotas assigned to the Kingdom of Spain in order to optimize their use and modifies certain Ministerial Orders that regulate these concepts since 2014.  

This Order is mainly applicable to the stocks subject to the total allowable catches and quotas in the peninsula waters of the Atlantic Ocean. 

These are the main measures that have been taken: 

  • Flexibilization of the transmissions of fishing possibilities (quotas) for the vessels with individual distribution, thus allowing a better adaptation to the fisheries within the previously established distribution, that is to say, that the vessels themselves through the transmissions regulate the distribution of quotas. Those operating in the Bay of Biscay and the Northwest, Gulf of Cadiz and those trawling in Portuguese waters. 
  • Establishment of a mechanism for the annual optimisation of the boilermakers’ quotas. As of October 1st, vessels that have already exhausted their quotas will be able to continue fishing and using the quotas that will be left over for other vessels, thus guaranteeing the full use of the quotas allocated.
  • Establishment of procedures for the management of quotas allocated to Spain but which, until now, have mostly not been established. 
  • Establishment of criteria for the annual allocation of quotas not yet allocated in Spain, (blue whiting or horse mackerel in EU waters and swordfish in the North Atlantic). 
  • Establishment of uniform procedures for the cessation of activity and the closure of fisheries in cases where quotas have been exhausted. 
  • Establishment of management measures for recreational fisheries for sea bream in the Cantabrian Sea. 

The Order APA/315/2020, of April 1st, reinforces Spain’s commitment to sustainable and responsible fisheries management and shows progress in the regulation regarding the fishing quotas assigned to Spain.  

 

LAND TRANSPORT

Many measures are being taken with regard to land transport as it is an essential resource to secure the local supply chain, above all on local and national level. 

Administrations are beginning to ensure the protection of truck carriers by distributing personal protective equipment by enabling filling stations and providing places for weekly rest of at least 24 hours. 

Likewise, the National Road Transport Committee communicated to the Ministry of Transport its commitment to maintain transport and guarantee the supply of medicines in hospitals during the Easter weeks. 

For its part, rail transport is also adapting to this situation and some initiatives are already beginning to be made public, such as adapting trains of the Operator Renfe for the transport of patients affected by COVID-19 between different autonomous communities. 

 

AIR TRANSPORT

The Spanish airports are adapting to the COVID-19, among other forms, by enabling their esplanades to offer parking to the planes that, due to the evident reduction of flights, are not operating and therefore have to remain on the ground. 

Since the health emergency does not only affect Spain but it is a global phenomenon, many flights and many regular lines operated by air operators will be suspended for an undefined period of time.

 

MARITIME TRANSPORTATION

With regard to maritime transport, it is important to highlight the change of direction that the maritime industry is taking in order to face the pandemic. 

Many shipping companies are temporarily suspending some of their usual shipping lines, as well as adapting their rotations to the progressive increase in Asian imports to the demanding European continent. This increase is materialized in the fact that rates from the Mediterranean to the Far East have increased by 42.4% and in the oil price crash. 

Although there are shipping companies that have decided to suspend temporary their services with stopovers in Spanish ports, there are still sufficient services to guarantee the supply chain. 

For its part, the Spanish ports have been taking measures to mitigate the effects that might arise from abandonment of goods and containers in the ports (in many cases forced). Let us take as an example the Port of Barcelona that has implemented the so called “flat rate” regarding the cost resulting from storage of the containers in the ports with the aim to mitigate the economic impact that COVID-19 is producing in the importing companies. 

This measure adopted by the Port of Barcelona shall be applicable to the import containers located in the container terminals of the enclave between March 31st and April 13th (for the time being). According the experts’ estimation, the cost of storage of the containers will be reduced by 65 % as a result of these measures.

As we can observe, all sectors are renewing and readapting themselves in this uncertain and unknown situation we are just undergoing in order to guarantee the supply chain of products and materials, securing so that basic needs of the citizens are met and that the industries, to the maximum possible extent, continue operating.

RDL 10/2020, of March 29th, Suspension of Non-essential Activities

The recent Royal Decree Law nº 10/2020, of March 29th  orders the suspension of companies and non-essential works as a consequence of the declaration of the state of alarm issued on March 14th, an order that certainly affects both the economy and society in a global way.  

This suspension will last 11 days, from March 30th to April 9th, both inclusive, establishing that March 30th is considered a day of adaptation to enable the closure of all non-essential activities that shall be suspended in the following days. During this period the remuneration of the employees will be secured by means of the “recoverable paid leave”, as approved by the Government on March 29th. 

The problem is that the classification of activities which are considered essential and those which are not has caused controversy the first day of the shutdown. Consequently, the Government issued the Order SND/307/2020, of March 30th, which establishes the imperative criteria for application of the Royal Decree-Law 10/2020, of March 29th, and the model of statement of responsibility which allows the necessary journeys between the worker’s residence and the workplace, which supplements the RDL but without clarifying all the questions and doubts arising from the very same RDL. 

Let us recall that the Royal Decree law 463/2020, of March 14th, by means of which the state of alarm was declared in order to manage the health crisis situation caused by COVID-19, states that the supply of the population must be guaranteed at all times, by facilitating and ensuring the transport of goods throughout the national territory. On this basis, it should be noted that land transport companies and those companies related to maritime and air traffic pursuing or enabling this aim (without being this a limiting list), as well as the facilities providing these services shall guarantee their activity throughout the whole period of the state of alarm. In fact, Mrs. María José Rallo, the Secretary General for Transport, declared that transport is obviously included within the essential activities, and State Ports has initiated an information campaign to emphasize the functioning of the state port system to guarantee the distribution of essential items and goods during the COVID-19 crisis. 

Abiding to the sixth point of the annex of the RDL nº 10/2020, states: “The recoverable paid leave regulated by this royal decree-law is not applicable to the following employees: 6. Those who carry out transport services, both for people and goods, which continue to be carried out since the declaration of the state of alarm, as well as those who must ensure the maintenance of the means used for this purpose, under the protection of the regulations approved by the competent authority and the competent authorities delegated since the declaration of the state of alarm”. 

Similarly, article 4 of the RDL 10/2020 specifies what shall be understood as the minimum indispensable activity: “The companies that must apply the recoverable paid leave regulated in this article may, if necessary, establish the minimum number of staff or work shifts that are strictly indispensable in order to maintain the essential activity. This activity and this minimum number of staff or shifts shall be based on the activity carried out during an ordinary weekend or on public holidays”.

Therefore, in accordance with the sixth point of the annex of the RDL nº 10/2020 (which regulates the non-application of the paid leaves regulated in the present Royal Decree-Law) the port services are considered essential services (art. 18 of the Royal Decree, of March 14th), being some of them even mandatory for the vessels when in ports. Moreover, we must understand that all the State Ports of General Interest are strategic infrastructures by their very definition, some of them also being critical infrastructures. All of them are guarantors of operation of services that are defined as essential and must therefore continue to operate, guaranteeing supply by facilitating the flow of goods in them. 

The same interpretation shall be applicable to the companies that provide their services there: 

 – The commercial procurement service.

– The commercial supply service.

– The ship agency service.

– The commercial inter-port transport service.

– Port handling operations (dockers, etc.).

– The port passenger service.

– Mooring and unmooring service.

– The port towing service.

– The port consignment service.

– General services provided directly by the Port Authority or indirectly by third parties.

– The rest of the commercial activities related to the port activities, such as freight forwarders, customs agents, damage commissioners, container depots, etc.

With regard to road transport of goods, it is also asserted as essential and its workers can continue with their activity under the new exceptions to the compliance with driving and rest times implemented between March 29th and April 12th, both inclusive (Resolution of March 26th, 2020, of the Directorate General for Land Transport), and with the acceleration of driving facilitated by the so called cross-border “green lanes”. 

We should point out that transport activities remain fully operative as long as these are related to other essential economic activities (distribution of food and healthcare products, among others). What is more, the RLD n. 10/2020 is only applicable to the salaried employees, which means that the self-employed remain active except for those performing services for companies that were, on March 14th, classifies as no-essential and remain closed: restaurants and hospitality companies, sports companies, among others. 

Extension of the State of Alarm in Spain

The Congress of Deputies, at the plenary session on March 25, approved the extension of the State of Alarm for another 15 days, among other things. 

This means that all the measures, orders and decisions that have been implemented up to now and have been extended during the period of the State of Alarm shall be extended, a priori, for another 15 calendar days. In other words, the State of Alarm declared by the Royal Decree 463/2020 of 14th of March will last at least until midnight on April 11.

In fact, article 116 of the Spanish Constitution regulates the State of Alarm and establishes that it may be adopted by the Government for a maximum period of 15 calendar days. Yet it is precisely the article 116 of the Spanish Constitution that, in spite of limiting the action of the Government to declare the State of Alarm for a total period of 15 calendar days, in its second paragraph adds the possibility that the Congress of Deputies may extend such period, with unspecified time limitation. 

That is, as long as the Congress of Deputies approves the extension of the period of the State of Alarm the Constitution does not limit the duration of the period. Therefore, this could be prolonged if necessary.

Last measures adopted by the Spanish Government are:

LAND BORDER.- 

As we have already mentioned, the logical and direct consequence of the extension of the State of Alarm is that many of the Orders and Decisions that had been taken during the first two weeks of the State of Alarm shall also be extended during this second fortnight.

An example of this is the Order INT/283/2020, of 25 March, extending internal land border controls from 00:00 on 27 March 2020 to 24:00 on 11 April 2020. In other words, only the following persons will be allowed to enter the national territory by land: 

(a) Spanish citizens. 

(b) Residents of Spain. 

(c) Residents of other Member States or Schengen Associated States on their way to their place of residence.

(d) Cross-border workers. 

(e) Health or elderly care professionals on their way to work. 

(f) Those that provide documentary evidence of force majeure or necessity.

Exempt from these restrictions are foreign personnel accredited as members of diplomatic missions, consular offices and international organisations located in Spain, provided that they are travelling in connection with the performance of their official duties. Similarly, and in order to ensure the continuity of economic activity and to preserve the supply chain, these measures are not applicable to the transport of goods.

Another example is Order TMA/286/2020, of 25 March, which extends the ban on entry of passenger ships from the Italian Republic and cruise ships of any origin, on Spanish ports to limit the spread of COVID-19, from 00:00 hours on 27 March 2020 to 23:59 hours on 9 April 2020.

WORK.- 

At the same plenary meeting the Council of Deputies ratified the Royal Decree-Law, by means of which the objective dismissal for absenteeism was repealed (article 52.d of the Workers’ Statutes), which allowed dismissal for justified medical absences.

The main objective of the Minister of Health with the repeal of this article is to preserve the health of the workers, avoiding that they attend work while sick as they fear to be dismissed. Moreover, the Minister stresses that taking care of oneself, in addition to personal well-being, also guarantees the health of others. 

LAND TRANSPORT.- 

On the other hand, and in relation to the transport sector, on March 26th the Government enacted the Ministerial Order INT/284/2020 modifying the regulation that had been adopted during the State of Alarm for the management of traffic and circulation of motor vehicles. 

Article 1.1 states that the Minister of the Interior may agree to close to traffic roads or sections of roads for reasons of public health, safety or traffic flow, or to restrict access to certain vehicles on these roads for the same reasons. Furthermore, the paragraph 2 provides that, in the case of road closures or restrictions on the movement of certain vehicles, those intended for certain activities considered essential to ensure the supply of products and the provision of essential services to the population shall be exempted.

In particular, the vehicles considered essential to ensure the supply of essential goods and services are the following: 

a) Those of transport and health care, both public and private; those of the Security Forces and Corps, those of civil protection and rescue and those of fire extinction. 

b) Those transporting maintenance personnel or repair technicians for health facilities or equipment 

c) Those for the distribution of medicines and medical equipment. 

d) Those for the distribution of food. 

e) Those of the Armed Forces. 

f) Those for road assistance. 

g) Those of the road maintenance and conservation services. 

h) Those for the collection of solid urban waste. 

i) Those intended for the transport of melting materials. 

j) Those intended for the transport of fuels. 

k) Those intended for the production, marketing, processing and distribution of agricultural, livestock and fisheries products and their inputs; for the production, distribution, rental and repair of equipment and machinery for agriculture, fisheries, livestock farming and their associated industry, and for the transport and treatment of agricultural, livestock and fisheries waste and by-products and those of the food industry. 

l) Those intended for the carriage of perishable goods, understood as those set out in Annex 3 to the International Agreement on the Carriage of Perishable Foodstuffs (ATP) as well as fresh fruit and vegetables, in vehicles which meet the definitions and standards expressed in Annex 1 to the ATP. In any case, perishable goods must account for at least half the payload capacity of the vehicle or occupy half the payload volume of the vehicle. 

m) Those intended for the manufacture and distribution of cleaning and hygiene products. 

n) Those of the Sociedad Estatal Correos y Telégrafos, S.A. 

ñ) Funeral services. 

o) Those used by private security companies for the provision of security transport services, response to alarms, patrols or discontinuous surveillance, and those that are necessary for the performance of security services to guarantee essential services and supply the population.

p) Other vehicles that, if not included among the above, the agents in charge of traffic control and discipline consider, in each specific case, that they contribute to guaranteeing the supply of goods or the provision of essential services to the population.

Therefore, the circulation of these vehicles will be guaranteed during the entire State of Alarm, without limitation to restrictions, both existing and future.

The Judicial System and Administrative Procedures throughout the Spanish state

On March 14, 2020, the President of the Spanish  Government declared the State of Alarm (by means of RD 463/2020) throughout the National Territory, due to the exceptional situation of danger to the Public Health generated by the COVID-19 outbreak. Thus, the part of the legal activity of the country has been practically suspended, with certain exceptions.

The measures to be taken by the Government in this regard must be aimed for protecting the health and safety of citizens, minimizing the progression of the disease and strengthening public health systems, but also trying to mitigate the health, social and economic impact that this exceptional situation may generate.

From the legal aspect point of view the main  measures are:

  1. The suspension of all procedural and administrative terms, what means that all these proceedings are actually suspended.
  2. The suspension of time bar terms and the expiration of any actions and rights has also been ordered.

These suspensions will be operative as far as the State Alarm is maintained, in principle 15 days as from the 14thof March 2020, but an extension is already foreseen.

The General Council of the Judicial Power issued two Orders on March 14, 2020, suspending all scheduled Court trials  and all procedural deadlines except for Essential Services.

These adopted measures are immediately applicable since 14th March 2020, being applicable to the whole country and that will remain in force while the State of Alarm remains, that is to say, for 15 calendar days from their publication except if they are extended.

Likewise, the Permanent Commission of the General Council of the Judiciary, working together with the Ministry of Justice and the Attorney General’s Office, agreed on the “Essential Services” that need to be maintained during this State Alarm.

These “Essential Services” will guarantee:

  1. Any legal proceedings which, if not carried out, could cause irreparable damage.
  2. Urgent internments of article 763 of the Law of Civil Procedure (non-voluntary internments for reasons of psychological disorder).
  3. The adoption of precautionary measures or other actions that cannot be postponed, such as the measures for the protection of minors in article 158 of the Civil Code.
  4. The courts of violence against women shall provide the corresponding on-call services. In particular, they shall ensure that protection orders are issued and any precautionary measures taken with regard to violence against women and minors.
  5. The Civil Registry shall provide permanent attention during court hours. In particular, they shall ensure that burial permits are issued, that births are registered within the prescribed period and that marriages are performed in accordance with article 52 of the Civil Code.
  6. Proceedings with detainees and others that cannot be postponed, such as urgent precautionary measures, removal of bodies, entries and searches, etc.
  7. Any proceedings with prisoners or detainees.
  8. Urgent actions in the area of prison surveillance.
  9. In the contentious-administrative jurisdictional order, urgent and undelayable health entry permits, fundamental rights whose resolution is urgent, urgent precautionary and preventive measures, and contentious-electoral appeals.
  10. In the social jurisdictional order, the holding of trials declared urgent by law and urgent and preferential precautionary measures, as well as the processes of Files for the Regulation of Employment and Files for the Temporary Regulation of Employment.
  11. In general, the processes in which a violation of fundamental rights is alleged when this are urgent and preferential (those whose postponement would prevent or make very burdensome the judicial protection claimed).
  12. The President of the High Court of Justice, the President of the Provincial Court and the Chief Justice will adopt the necessary measures regarding the cessation of activity in the judicial dependencies where their respective headquarters are located, and the closure and/or eviction of the same if necessary, informing and coordinating with the competent Monitoring Committee.

To ensure that these essential services are provided, orders are issued, to keep the court buildings operational and open. This will be done, however, by providing judges with the necessary protective elements to prevent the spread of viruses, warning signs providing information on minimum safety distances, by promoting teleworking and, in the case of rotating shifts, special attention will have to be given to people whose personal characteristics may became more sensitive to COVID-19.

To conclude, we would like to highlight the fact that prior to the publication of these Orders on 14 March 2020, and in view of the exceptional situation of some different territories, some Autonomous Communities, in the exercise of their autonomies, took measures such as those established by the CGPJ, to eliminate the spread of the COVID-19 virus, for example, Madrid, the Basque Country or the towns such as Haro (La Rioja) or Igualada (Barcelona). For its part, the Royal Decree ratifies all the provisions and measures previously adopted by the competent authorities of the Autonomous Communities and local entities on the occasion of the coronavirus COVID-19, which will continue in force and produce the effects foreseen in them, providing that they are compatible with it.

It is also compulsory for citizens and legal professionals to interact with the administration through the usual electronic offices, by telephone or via email, reducing the physical relationship to the essential and unavoidable procedures.