Clifford Chance
Redemption of disputed debt: Good news finally, for portfolio holders
17 March 2020
In its Judgment of 5 March 2020, the Spanish Supreme Court confirmed that the redemption of disputed debt established in the Civil Code does not apply to the sale and purchase of portfolios.
The Supreme Court thus ends the heated debate between those who defended the power to unilaterally cancel debts held by those debtors whose positions had been included in a portfolio and those who, by contrast, invoked the special characteristics of these types of transactions to defend that the redemption of disputed debt is not applicable.
This Judgment also confirms that disputes regarding certain clauses of loan agreements (such as floor clauses) cannot be used to convert.
