Precautionary Measures for the Protection of Credit Originating from a Foreign Court Decision

Dominican legal system allows foreign creditors to protect their credit by seizing assets of debtors based on foreign court decisions.
April 25, 2024
Rodolfo Mesa Chavez
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The legal system of the Dominican Republic allows creditors with a credit based on a decision from a foreign court to protect their credit by conservatively or preliminarily seizing the assets of their debtor located in the Dominican Republic. One of the most effective conservative measures that a creditor can adopt is the provisional judicial mortgage. The first aspect to analyze is the regulatory framework that allows legal actions to be pursued based on a sentence or decision issued by a foreign court, namely:

a) Article 26, paragraph 1 of the Constitution establishes that the Dominican Republic: "Recognizes and applies the rules of general and American International Law to the extent that its public authorities have adopted them."

b) Article 122 of Law No. 834 of July 15, 1978: "Judgments rendered by foreign courts and acts received by foreign officials are enforceable within the territory of the Republic in the manner and in the cases provided by 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 suitable legal scenario is presented by the Code of Civil Procedure, which establishes the right of creditors to request from a competent judge authorization to register a provisional judicial mortgage against the real estate of their debtor(s). In this regard, articles 54 and 55 of the Code of Civil Procedure state the following:

Art. 54: "The judge of First Instance may also, in the same forms and conditions prescribed in article 48, authorize the creditor to take a provisional registration of a judicial mortgage on some or all of the real estate of their debtor. This provisional registration will only have effects for three years; but it can be renewed for an indefinite period of time, by presenting the order that authorized the first registration. The creditor must sue on the merits within the period indicated in the order authorizing the mortgage registration, under penalty of nullity of the registration. Within the period of two months from the date on which the judgment on the merits has acquired res judicata authority, the creditor must convert the provisional registration into a definitive registration, which will produce its effects retroactively from the date of the first registration and will be done at no cost. The creditor will pay the fees and expenses only once. In the absence of a definitive registration within the specified period of two months, the provisional registration will retroactively have no effect and its cancellation may be requested by any interested party, at the expense of the party that took the registration and by virtue of an order issued by the authorizing judge."

Art. 55: "When the value of the real estate affected by the provisional registration, authorized in accordance with the preceding article, is notably higher than the amount of the sums registered, the debtor may limit its effects, at any time, by the judge of the summary or by the judge who knows the merits of the claim, by notification that the reserved real estate have at least double the value of the principal credit, interests, and expenses."

Procedure to Follow.

Once the judgment of the foreign court has been obtained, it must be legalized, either by apostille, if the jurisdiction of origin of the judgment is part of the agreement, or by ordinary legalization. An important aspect is that to make legal actions to be filed in the Dominican Republic more viable, it is highly advisable for the decision of the foreign court to express the amount or value up to which precautionary measures will be taken against the assets of the debtors. Once the decision or judgment has been legalized, it must be translated into Spanish by a Judicial Interpreter, duly authorized for this purpose. Depending on the number of pages, this process could take 3 to 5 days, including the legalization of the translation by the competent authorities. It is recommended to translate in the same way the documents and contracts that serve as the basis for the claim, as a way of giving it the greatest possible weight. Subsequently, and by virtue of the provisions of articles 54 and 55 of the Code of Civil Procedure, an application or request must be drafted to the President Judge of the competent court so that, based on the judgment and the accompanying documents and contracts, they authorize the adoption of conservative measures against the movable and immovable property of the client's debtors. It is worth noting that this procedure is essentially administrative, so in principle, the opposing party does not participate. It is optional for the judge to grant or deny authorization. For these purposes, the plaintiff 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 of a nature is provided that allows to suppose or fear the imminent insolvency of the debtor, which will be recorded in the order issued by the judge" [1]. The order authorizing the mortgage registration must indicate:

  1. The urgency;
  2. The amount for which the seizure is authorized
  3. The period within which the creditor must sue before the competent judge on the merits, under penalty of nullity.

The judge may require the creditor to justify sufficient solvency in advance or the presentation of a guarantor or a bond, which will be deposited with the secretary or with a sequestrator. The order will be executed by minute and notwithstanding any appeal. In practice, in civil and commercial matters, the judge takes approximately 10 to 15 days to render his decision. It is worth mentioning that in his decision, the judge usually grants a period of 30 days for the creditor to sue on the merits. The competent court to file such a request may be either the domicile of the debtors or the location of the affected properties. With the authorization of the Dominican court to impose precautionary measures against the debtors' assets, provisional judicial mortgages are registered in the Title Registries of the places where the real estate is located. For this, a physical and cadastral location of the affected properties must have been previously made. With the deposit of the decision in the offices of the Title Registries, the real estate is encumbered with a provisional judicial mortgage that follows the property regardless of who the owner is. However, it is worth noting that this does not prevent the property from being encumbered by other definitive mortgages. The registration of the Provisional Judicial Mortgage before the competent Title Registry is made together with the two invoices referred to in article 2148 of the Civil Code. Given the provisional nature of the mortgage, the effectiveness of the registration is reduced to three years, but it can be renewed, for an equal period, indefinitely, by presenting the order that authorized the first registration. It is necessary to notify the Order authorizing the Provisional Registration of the Judicial Mortgage within fifteen days of its registration, with the choice of domicile within the jurisdiction of the Title Registry where the registration or record was made [2]. It is important to take into account that the claim must be filed within the period indicated in the order authorizing the mortgage registration, under penalty of nullity of the registration. Once a final and irrevocable judgment on the merits has been obtained, the creditor will be obliged, within two months from said judgment, to convert the provisional registration into a definitive registration, which will produce its effects retroactively from the date of the first registration. Regarding the conversion of the provisional judicial mortgage authorized by the judge, into a Definitive Judicial Mortgage, our Supreme Court of Justice has established that: "For a provisional judicial mortgage, taken with the authorization of the judge, to be converted into definitive, it is not enough that the creditor is provided with a document proving the existence of his credit, but it is necessary for a judgment with the authority of res judicata to have intervened condemning the debtor to pay the contracted obligation, or that the credit is contained in an authentic act with executory force" [3]. In the absence of a definitive registration within the period of two months, the provisional registration will retroactively have no effect and its cancellation may be requested by any interested party, at the expense of the party that took the registration and by virtue of an order issued by the authorizing judge.

MESA & MESA | Lawyers

[1] Art. 48 of the Code of Civil Procedure.

[2] Art. 56 of the Code of Civil Procedure.

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

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