Financing, Bond and Risks: Review of the Ruling of the Supreme Court No. 452/2019 of July 18th, 2019

Financing, Bond and Risks: Review of the Ruling of the Supreme Court No. 452/2019 of July 18th, 2019

Abstract:

On July 18th, 2019, the First Chamber of the Spanish Supreme Court ruled on the subject matter of this commentary. In that ruling, the Chamber´s doctrine regarding the «rebus sic stantibus» clause was channelled, analysing the guarantee agreement and the application of that clause to it. In turn, the doctrine of regulatory risk is mentioned and applied, defending the non-application of the «rebus sic stantibus» clause when the sector in which the principal debtor operates is a highly regulated sector. In conclusion, the Supreme Court understands that the figure of the guarantor serves precisely to assume the risks of default that the debtor may suffer, and that therefore the materialization of such risk does not preclude the application of the «rebus sic
stantibus» clause, since it would undermine the raison d´etre of the guarantee agreement.

Keywords: Rebus sic stantibus, this being the case, guarantee, guarantee, guarantee in the interest of the guarantor, regulatory risk, extraordinary change of circumstances.