Precautionary Measures for the Protection of Credit Originated in a Foreign Judgment.

The legal system of the Dominican Republic allows the creditor with a credit based on a decision of a foreign court to protect their credit by interposing on a conservatory or preliminary lien on the assets of their debtor located in the Dominican Republic.

One of the most effective conservatory measures that can be taken by the creditor is the provisional judicial mortgage.

The first aspect is to analyze the regulatory framework that allows for prosecution of legal actions on the basis of a ruling or decision emanating from a foreign court, namely:

a) Article 26, item 1 of the Constitution establishes that the Dominican Republic: “Recognizes and applies the norms of general and American International Law to the extent that their public powers have adopted them (…);

b) Article 122 of Law No. 834 of July 15, 1978: “Rulings rendered by foreign courts and acts received by foreign officials are enforceable in the territory of the Republic in the manner and in the cases as provided for by the law”.

c) Art. 89 of law No. 544-14: “Recognition of foreign judicial decisions in contentious matters. Foreign judicial decisions in contentious matters will be recognized in the Dominican Republic. ”

The most appropriate legal scenario is presented by the Civil Procedure Code, which establishes the right of creditors to request a competent judge to authorize the registration of a temporary judicial mortgage against the real estate of the debtor(s). In this sense Articles 54 and 55 of the Code of Civil Procedure express verbatim the following:

Art.-54: “The judge of the First Degree may also, in the same manner and under the conditions established in article 48, authorize the creditor to take a registration of a temporary judicial mortgage on some or all of the properties of his debtor. This provisional registration will only produce effects for three years; but may be renewed for equal time indefinitely, by submitting the order that authorized the first registration. The creditor must sue over the fund within the term indicated in the order authorizing the mortgage registration, under penalty of invalidity of the registration. Within a period of two months from the date on which the judgment on the merits has acquired res judicata, the creditor must convert the provisional registration into final registration, which shall take effect retroactively from the date of the first registration and will be done without cost. The creditor will pay the rights and expenses only once. In the absence of definitive registration within the indicated period of two months, the provisional registration will be retroactively without effect and its cancellation may be requested by any interested person, at the expense of the person who took the registration and by order issued by the judge who authorized it. ”

Article 55: “When the value of the Real State affected by the provisional registration, authorized in accordance with the preceding article, is notoriously greater than the amount of the sums entered, the debtor may limit its effects, at any time, by the Judge of the Referrals or by the judge who knows the merits of the claim, by notifying that the properties that are reserved have at least a double value to the principal credit amount, interest and expenses.

Procedure To Follow.

Once obtained the Ruling of the foreign court, the same must be legalized, either via Apostille, if the jurisdiction of origin of the Ruling is part of the agreement or via ordinary legalization.

An important aspect is that to make legal actions more viable to be filed in the Dominican Republic it is highly desirable that the decision of the foreign court expresses the amount or value of the precautionary measures against the assets of the debtors.

Once the decision or ruling is legalized, it must be translated into Spanish by a Judicial Interpreter, duly authorized for the purposes. Depending on the number of pages this process could take from 3 to 5 days, including the legalization of the translation by the competent authorities. It is recommended to translate the same documents and contracts that serve as the basis for the claim, as a way to cover it with the greatest possible weight.

Following and under the provisions of articles 54 and 55 of the Code of Civil Procedure must be drawn up an application or request to the Chief Judge of the competent court so that on the basis of the judgment and the documents and contracts that accompany it authorizes to take measures against the movable and immovable property of the customer’s debtors. It is worth noting that this procedure is essentially administrative, so in principle the counterparty does not participate.

It is optional for the judge to grant or deny authorization. To this end, the claimant must demonstrate the urgency and danger of collecting the credit. “The credit will be considered in danger and therefore there will be urgency when evidence is provided of a nature such as to allow the assumption or fear of imminent insolvency of the debtor, which will be recorded in the order issued by the judge[1].”

The document/act that authorizes the registration of the mortgage must indicate:

  1. The urgency;
  2. The amount by which the lien is authorized
  3. The period in which the creditor must sue before the competent judge on the merits, on the penalty of nullity.

The judge may demand from the creditor the prior justification of sufficient solvency or the presentation of a guarantor or bail, which will be done in the hands of the secretary or in the hands of a Conservator.

The document/act will be executed on schedule and notwithstanding any recourse.

In practice in civil and commercial matters the judge takes approximately 10 to 15 days to render his decision. It is worth noting that in its decision the judge usually grants a period of 30 days for the creditor to sue the content.

The competent court to file such an application may be both the domicile of the debtors and the place where the affected buildings are located.

With obtaining the authorization of the Dominican court to place precautionary measures against the property of the debtors, provisional judicial mortgages are registered in the Registry of Deeds of the places where the real estate is located. To do this, a physical and cadastral location of the location and situation of the affected property must have been previously made.

With the deposit of the decision in the offices of the Deed Registers the Real State property is taxed with a temporary judicial mortgage that follows the property regardless of who owns it. However it is worth noting that this does not prevent the property to be taxed by other definitive mortgages.

The registration of the Provisional Judicial Mortgage by the competent Registry of Deeds is done together with the two invoices referred to in article 2148 of the Civil Code. Due to the temporary nature of the mortgage, the effectiveness of the registration is reduced to three years, but can be renewed, for an equal period, indefinitely, by presenting the car that authorized the first registration.

It is necessary to make the notification of the Order authorizing the Provisional Registration of the Judicial Mortgage within the fifteen days of its registration, with election of domicile within the jurisdiction of the Registry of Titles where the registration or registration has been made[2].

It is important to take into account that the content must be sued within the period indicated in the order authorizing the registration of the mortgage, under penalty of invalidity of the inscription.

Once a final and irrevocable ruling has been obtained on the matter, the creditor will be obliged, within a period of two months from said Ruling to convert the provisional registration into final registration, which will produce its effects retroactively from the date of the first inscription.

With respect to the conversion of the provisional judicial mortgage authorized by the judge, into a final judicial mortgage, our Supreme Court of Justice has established that: “In order for a provisional judicial mortgage, taken with the authorization of the judge, to be converted definitively, Sufficient that the creditor is provided with a document proving the existence of his credit, but it is necessary that a Ruling with authority of the res judicata should have intervened that orders the debtor to pay the obligation incurred or that the claim is contained in a Authentic act with enforceability[3]“.

In the absence of definitive registration within two months, the provisional registration will be retroactively without effect and its cancellation may be requested by any interested person, at the expense of the person who took the registration and by order issued by the judge who authorized it.

Rodolfo Mesa Chavez

Twitter: @rodolfomesa

[1] Art. 48, Civil Procedure Code.

[2] Art. 56, Civil Procedure Code

[3] Cas.Civ.12 Jan 2000, B.J. 1070, pages. 94-98.