Approach: one year after the reform
In 2006, the present reader wrote an article entitled “La competencia objetiva de los Juzgados de lo Mercantil” (The objective jurisdiction of the Commercial Courts),
Homenaje a Rodrigo Uría, Actualidad Jurídica Uría Menéndez (AJUM, special issue-2006).
It began with a few lines that I cannot resist transcribing, because they seem to me to be very timely and current for the presentation of the problems that this commentary sets out to address:
“On 1 September 2006, it was two years since the Commercial Courts came into operation. And it would be safe to say that one of the most controversial questions that has arisen during this time in relation to these new jurisdictional bodies is that relating to the delimitation, on the basis of legal criteria, of their objective competences in non-insolvency matters. In a very special way, the main focus of problems identified lies in the determination of the competent court in the so-called cases with related matters”.
This controversy continued to be very present in the practice of our courts for quite some time, until its intensity was reduced as a consequence of the criteria established by the courts themselves for the interpretation of Article 86 ter.2 of the Organic Law of the Judiciary (“LOPJ”), a rule which – as is well known – since 2004 has been establishing the list of competences of these Courts in non-insolvency matters.
Article 86 ter LOPJ has been subject to various legislative amendments over the years. There have been, in total, four previous “tweaks” introduced by Organic Laws 20/2003, of 23 December; 13/2007, of 19 November; 5/2011, of 20 May; and 7/2015, of 21 July). The latest amendment to the law, which will now be dealt with and which, by the way, has changed its numbering, is the one introduced just one year ago by Organic Law 7/2022, of 27 July, amending Organic Law 6/1985, of 1 July, on the Judiciary, in relation to Commercial Courts (the “Organic Law 7/2022”).
This last reform, in force since 17 August 2022 (or, in practice, due to the inability of the month of August, since 1 September 2022), has not received special attention from legal operators. Hardly anything has been written about it. Nor have any criteria been drawn up on its interpretation by the commercial speciality bodies themselves, a very valuable practice which, as we have seen, has become habitual in the face of important regulatory modifications that affect matters within their knowledge. When it has been mentioned, it has mainly been to give an account of the list of competences that have left the Commercial Courts or those that have returned to these Courts; in terms, moreover, that are essentially descriptive. Perhaps one of the reasons for this circumstance is the fact that this modification was made in the summer and was soon eclipsed by the very relevant and much commented upon insolvency reform produced in the revised text of the Insolvency Act by Law 16/2022, of 5 September.
This commentary will deal with two very specific issues. On the one hand, it will analyse the way in which the jurisdiction of the Commercial Courts in non-insolvency matters has been defined, in order to determine whether or not the formula used has introduced relevant modifications. Particular reference will be made to the competences attributed to the Commercial Courts in corporate matters. On the other hand, the way in which the criterion for the attribution of competences in matters with related matters has been established will be examined, with the aim of establishing whether this criterion is adequate and sufficient to resolve the situations that may arise in practice and which have caused so many headaches for our courts.
By way of an initial reminder: the main changes introduced
As a year has passed, it is worth recalling the main changes introduced by the aforementioned regulation, which in its preamble justified these changes starting with a true declaration of intent:
“This law seeks to ensure that the very positive aspirations that justified the creation of the Commercial Courts and the specialised sections of the Provincial Courts by Organic Law 8/2003, of 9 July, are not frustrated, to which end it is essential to relieve those courts and those sections of their powers”.
There are, therefore, competences that have left the sphere of the Commercial Courts. On the one hand, the collective actions provided for in the legislation on general contracting conditions and in the legislation on the defence of consumers and users, a decision that I consider highly criticisable (although this would be the subject of another commentary, I cannot fail to mention it). On the other hand, actions in transport matters relating to the Community regulations on the protection of air passengers, which had been causing a heavy workload for these Courts, probably not justified in view of the criterion of specialisation that lies behind the decision to determine their competences.
There are also competences that have returned to these Courts: those of hearing bankruptcy proceedings of non-trading natural person debtors.
Thus, the former Article 86 ter LOPJ has been divided between what are now Articles 86 bis, 86 ter and 86 quater.
Article 86 bis LOPJ reads as follows:
“1. The Commercial Courts shall hear any matters falling within the jurisdiction of the civil jurisdiction in matters of intellectual and industrial property; unfair competition and advertising; commercial companies, cooperative societies, economic interest groupings; land, national or international transport; maritime law, and air law.
By way of exception to the provisions of the preceding paragraph, the Commercial Courts shall not have jurisdiction to hear matters relating to damage arising from the destruction, loss or damage to checked baggage provided for in the Convention for the Unification of Certain Rules for International Carriage by Air, done at Montreal on 28 May 1999; nor to matters provided for in Regulation (EC) No. 261/2004 of the European Parliament and of the Council of Europe and the Council of Europe. No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91; in Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91. No 295/91; Regulation (EC) No 1371/2007 of the European Parliament and of the Council of 23 October 2007 on rail passengers’ rights and obligations; Regulation (EU) No 181/2011 of the European Parliament and of the Council of 16 February 2011 on the rights of passengers in bus and coach transport and amending Regulation (EC) No 2006/2004; and Regulation (EC) No 2006/2004. No 2006/2004; and Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004.
- The Commercial Courts shall also have jurisdiction to hear actions relating to the application of Articles 101 and 102 of the Treaty on the Functioning of the European Union and Articles 1 and 2 of Law 15/2007, of 3 July, on the Defence of Competition, as well as claims for compensation for damage caused by infringement of competition law.
- The Commercial Courts shall also hear direct appeals against the negative ratings of the commercial registrars or, where appropriate, against the express or presumed resolutions of the Directorate General for Legal Security and Public Faith relating to these ratings”.
Article 86 ter LOPJ now exclusively regulates the powers relating to insolvency proceedings (previously, Article 86 ter.1 LOPJ). And Article 86 quater LOPJ establishes the jurisdiction of the Commercial Courts for the recognition and enforcement of foreign judgments and other foreign judicial decisions when they deal with the matters referred to in Articles 86 bis and 86 ter LOPJ, unless otherwise provided for in treaties and other international rules (previously, Article 86 ter.3 LOPJ).
The “new” Article 86 bis.1 LOPJ. Comparison with its predecessor
The competences, by subject matter, which correspond to the Commercial Courts outside the field of insolvency are contained, as has just been transcribed, in paragraph 1 of Article 86 bis LOPJ.
Previously, Article 86 ter.2 LOPJ was expressed in the following terms:
“The Commercial Courts shall also hear any matters falling within the jurisdiction of the civil courts, with regard to:
a) Claims in which actions relating to unfair competition, industrial property, intellectual property and advertising are brought, as well as all those matters which, within this jurisdiction, are brought under the regulations governing commercial and cooperative companies.
b) Claims brought under national or international transport regulations.
c) Claims relating to the application of maritime law.
d) Collective actions provided for in legislation relating to general contracting conditions and the protection of consumers and users.
e) Appeals against decisions of the Directorate General of Registries and Notaries regarding appeals against the qualification of the Commercial Registrar, in accordance with the provisions of the Mortgage Act for this procedure.
f) Proceedings for the application of Articles 81 and 82 of the Treaty establishing the European Community and its derived law, as well as proceedings for the application of the articles determined by the Law on the Defence of Competition”.
The letters a), b) and c) of the former Article 86 ter LOPJ have been marked in bold because they are the ones affected by the reform. These three letters are now the first paragraph of section 1 of Article 86 bis LOPJ.
There are, however, obvious changes in the way the rule of attribution of jurisdiction is formulated. In the original rule, heterogeneous expressions were used before the reference to the specific matter entrusted to the Commercial Courts. Thus, there was talk of “lawsuits in which actions relating to” unfair competition, industrial property, intellectual property and advertising were brought; of “all those matters that within this jurisdictional order are brought under the protection of the regulations governing” commercial and cooperative companies; of “claims brought under the protection of the regulations on” transport, national or international; and, finally, of “those claims relating to” the application of maritime law. There was, as can be seen, no such expression. Nor was it possible to find a technical explanation for the differences. And this gave rise to a number of interpretative problems that the various authors tried to resolve by taking into account, among other elements, these differences in wording.
In the amendment, all these expressions have been replaced by a single one: “any matters falling within the jurisdiction of the civil courts in matters of”. This is followed by the different matters previously included in letters a), b) and c) of Article 86 ter.2 LOPJ: “intellectual and industrial property; unfair competition and advertising; commercial companies, cooperative societies, economic interest groupings; land, national or international transport; maritime law, and air law”.
By way of explanation, the preamble of the LO 7/2022 states the following when referring to these modifications (and others other than those relating to the removal or inclusion of matters in the catalogue of competences of these Courts):
“The modifications to the other articles of the Organic Law of the Judiciary contained in this law are either improvements to the wording, or contain clarifications or updates, or objectify criteria”.
Of course, this is a much simpler formulation of the rule of attribution of jurisdiction, which eliminates the differences that previously existed depending on the subject matter and, therefore, does not raise doubts derived from these differences.
The question is whether this is only a drafting improvement or whether there has been any material change or change of relevance that could introduce some variation in the criteria that, prior to this modification, had already been established in a reasonably peaceful manner in the practice of our courts when deciding whether certain matters in respect of which some doubt had arisen correspond to the Commercial Courts or to the Courts of First Instance.
Jurisdiction in corporate matters
An attempt will be made to answer the aforementioned question in a matter that has been particularly prone to the interpretative doubts that have been indicated: corporate matters.
Let us recall. Article 86 ter.2.a) LOPJ spoke of “all those questions which, within this jurisdictional order, are brought under the protection of the regulations governing” commercial and cooperative companies. Now, Article 86 bis.1 LOPJ refers to “all matters within the jurisdiction of the civil jurisdiction in matters of […] commercial companies, cooperative societies, economic interest groupings”.
The most obvious difference is the explicit inclusion of economic interest groupings.
We are going to focus on another, not so obvious, but which is equally easy to see. In the original rule, reference was made to “regulatory regulation”. Now it does not. Now it only states that the Commercial Courts have jurisdiction over all matters arising in the civil jurisdiction “in relation to” commercial companies, cooperative societies and economic interest groupings. There is no reference to their regulatory regulations. There is not even any mention of “company law” or “company law”, expressions that are used to refer to “maritime law” and “air law”.
In a first, purely literal approximation, it could be understood that the current expression is broader than the previous one, which was then limited to the issues resulting from the regulations governing these types of companies. Now, it could be said, there is no such limitation and all matters relating to commercial companies, cooperatives and economic interest groupings fall within the jurisdiction of the Commercial Courts. Has there thus been an extension of the jurisdiction of the Commercial Courts in the matter analysed? Or do the criteria established under the previous legislation remain in force?
A few examples of what have traditionally been regarded as borderline cases will give a better idea of what is meant.
Under the original wording of the precept, doubts were raised as to whether the Commercial Courts or the Courts of First Instance were responsible for proceedings in which actions were brought, such as those relating to the application of the doctrine of the lifting of the corporate veil, those relating to shareholders’ agreements or those relating to legal transactions involving shares or holdings in commercial companies (for example, in relation to the performance or breach of a contract for the purchase or sale of shares or holdings in a company). It is probably hard to remember now that in this type of situation there were discussions, especially at the beginning of the proceedings, when on many occasions the courts themselves (both the Commercial Courts and the Courts of First Instance) rejected the claims because they did not consider themselves to have jurisdiction, with the consequent need to refer the matter to the Provincial Courts and the inevitable delay in the processing of the proceedings.
Time helped to resolve the doubts. Thus, the principle was established that, in order to discern whether or not a matter should be referred to these specialised bodies, what was relevant in each specific case was to look at the legal basis of the cause of action on which the plaintiff’s claim was based. If that basis was to be found in the rules on companies or cooperatives, the Commercial Courts had jurisdiction, in accordance with the principle of specialisation, by virtue of which they were attributed to hear the matter. Otherwise, jurisdiction would lie with the courts of first instance.
The Order of the Provincial Court of Guipúzcoa of 26 April 2006 (Roj: AAP SS 216/2006) explained it very expressively:
“With regard to company matters, despite the fact that the legislator only refers to material rules to attribute material jurisdiction, separating it from the procedural channel articulating the claim, this does not mean that the mere allegation of any rules relating to companies determines the jurisdiction of the Commercial Courts, but rather that the specific claim brought must be considered in order to analyse whether or not it is based on company law”.
In the examples given above, not without dissenting voices, it ended up being established that, in general, the courts of first instance had jurisdiction, because the actions in question did not arise from company law, but from civil law, always on the understanding that in each case it is necessary to analyse the specific actions brought and their basis.
As an example, here is a button. In terms of lifting the veil, we can cite the Order of the Provincial Court of León of 13 September 2005 (Roj: AAP LE 604/2005), the Order of the Provincial Court of Madrid (14th Section) of 17 February 2009 (Roj: AAP M 2770/2009) or the Judgment of the Provincial Court of Toledo of 7 November 2016 (Roj: SAP TO 975/2016). The first order explained the following:
“even though a commercial company is involved in the process, this does not imply that the resolution of the case must come from the application of the rules of that nature referring to that type of company. […] the technique of lifting the veil has its legal basis in rules of a strictly civil nature such as those that tend to avoid fraud of law and to proscribe the abuse of rights, mentioned in articles 6 and 7 of the Civil Code”.
Precisely to a controversy relating to parasocial agreements refers the – not very distant in time – Judgment of the Supreme Court of 18 September 2019 (Roj: STS 2818/2019). Reading it, it can be seen that the problem analysed here had not ceased to be present in the practice of our courts. Thus, it explains that:
“The Provincial Court, in the judgement under appeal, after stating (fifth ground, second paragraph) that shareholders’ agreements, as regards their interpretation, compliance and enforceability ‘are governed by the provisions of the Civil Code’, goes on to say (sixth ground, third paragraph) that the obligations arising from a shareholders’ agreement do not constitute ‘a debt claimable against the company before the Civil Courts, since the determination of the validity and effectiveness of that agreement against the company will require, at least, the application of rules of a corporate nature'”.
The Supreme Court upheld the extraordinary appeal for procedural infringement and upheld the judgement under appeal. It explains that the former article 86 ter LOPJ:
“When referring to questions ‘that are brought’ under the aforementioned regulations, it is contemplating those that are the object of a specific claim in the pleading of the lawsuit and which, therefore, form part of the object of the proceedings and not those that could have a prejudicial nature for the decision on what is truly claimed.
In the present case, it is sufficient to examine the ‘plea’ of the claim to verify that it is about claims for payment between commercial companies without any specific claim being made about the declaration of the effectiveness or ineffectiveness of corporate agreements, which would entail – in order to resolve the substance of the question – the application of the regulatory rules of those companies; which in this case – as has been said – could only be of a prejudicial nature”.
And, without going any further, at the beginning of 2022, I intervened as a lawyer in a case concerning the denunciation of a shareholders’ agreement and it was assumed, quite naturally, that the jurisdiction corresponded to the Courts of First Instance.
Would the solution have been the same if the litigation had been initiated after 27 August, following the entry into force of the reform introduced by LO 7/2022?
To answer this question, the wording given to Article 86 bis.1 LOPJ by LO 7/2022 must be taken as a reference. As mentioned above, there is no longer any mention of corporate “regulations”. The expression used seems broader and, therefore, more conducive to a flexible interpretation, according to which it could be considered reasonable to understand that cases such as those indicated in the form of an example are attributed to the Commercial Courts. In these cases, although the basis of the action may be in civil law, there is an obvious connection with the way trading companies and cooperatives operate, which can even be seen with particular intensity in shareholders’ agreements, which normally contain continuous references to company law (because they regulate the way in which the parties to the agreement are to conduct themselves in their relations within a company); in a private sphere, it is true, but closely linked to everything that has to do with the functioning of the company, its corporate bodies and the rights and obligations of the shareholders, all of which are regulated by company law). From this perspective, it would not seem absolutely unreasonable that a debate that seemed reasonably closed could be reopened and that, faced with a process related to one of the matters that were previously considered to be borderline, someone (the plaintiff when making his claim, the defendant when facing the claim or the court itself ex officio) could consider whether the matter falls within the objective jurisdiction of the Courts of First Instance or of the Commercial Courts.
In the face of the former possibility, however, I believe that the general criterion already established prior to the reform introduced in 2022 should be maintained: it is necessary to take into account the basis of the action, so that if the basis is in the corporate regulations, the Commercial Courts will have jurisdiction and, if not, it will correspond to the Courts of First Instance. Thus,
A case in which the joint and several liability of a company for the piercing of the corporate veil of another company is sought must be brought before the courts of first instance.
Normally also when, in relation to a shareholders’ agreement, actions relating to questions of compliance or validity (in the case of the frequent problem of the possibility of unilateral denunciation of this type of agreement) are raised. The same applies in the case of a share deal.
However, it will always be necessary to look at the specific basis of the action, the cause of action, because it is also possible that in the latter two types of cases (shareholders’ agreements and share or share deals) the basis is to be found in company law. This is precisely what the Supreme Court established in its Judgment of 15 January 2013 (Roj: STS 430/2013), in a case in which the specific controversy over the transfer of shares raised by the claim that gave rise to those proceedings “concerns the exercise of this right of preferential acquisition and the effect it produces when it is exercised”, so that only from that point of view were the Commercial Courts competent. However, the same ruling reminds us that this
“does not mean that any controversy surrounding a sale or purchase of shares or company holdings is within the jurisdiction of the commercial courts, but essentially when it concerns an aspect contained in these ‘regulations governing commercial companies’, as in this case, the effect caused by the exercise of the right of pre-emptive acquisition in relation to the determination of the value of the shares being transferred”.
There are several arguments that can support the proposed conclusion.
We take as a starting point the preamble to LO 7/2022. As we have seen above, it speaks of a pure “drafting improvement”, which gives an idea that it was not the legislator’s intention to introduce a material change in the identification of the competences attributed to the Commercial Courts; much less to extend them when in some matters (collective actions relating to consumer and user regulations and transport) it is expressly stated that the purpose of the reform has been to reduce those competences.
Certainly, there is an improvement in the wording in terms of the elimination of the heterogeneous expressions that were used in the original regulation as an antecedent to the reference to each subject and the consequent use of a single one to allude to all of them. In corporate matters, the formula used does not seem to be the most appropriate, because it is not evident, from a reading based on the criterion of literal interpretation, that speaking of “matters relating to companies” is equivalent to speaking of “matters relating to the rules governing companies”. In fact, the same rule speaks of maritime law and air law, but does not use the same or a similar expression to refer to company matters. Nor, by the way, is “air transport”, which is included with this expression alone, which may be a further criticism of the legislative technique used. But it does not follow naturally from this that the consequence has been the extension of the competences of the Commercial Courts.
On the other hand, the broad interpretation could be taken to the extreme of understanding that any issue involving a commercial company would fall within the jurisdiction of the Commercial Courts. For example, a distribution or supply contract concluded between two commercial companies. But this is a reading that should be discarded as absurd and as directly contrary to the principle of specialisation, which – in short – is the essential criterion for the attribution of jurisdiction to this type of body, which has always been defined as specialised.
It remains to be seen, in any case, whether these considerations are shared by our commercial specialised bodies. Nevertheless, we end with a message of reassurance. One year after the new article 86 bis.1 LOPJ has been in force, there is no record of any precedents in which problems of jurisdiction have arisen again in corporate cases (or in other cases either), at least in different or different terms due to the new wording of the rule. Let us hope that this is because the different operators share the arguments put forward and agree in understanding that there has been no change in the determination of the competences of the Commercial Courts in non-insolvency matters. We shall see, over time, whether this assessment is confirmed or not.
The connecting rule
To deal with this issue, we return to the work we discussed at the beginning. It was said in 2006 that the main focus of the controversy that arose in relation to the objective jurisdiction of the Commercial Courts centred on whether or not these specialised bodies were responsible for hearing cases with related matters (and, in close connection with this, whether or not it was possible to exercise cumulative actions, some of which fall under the jurisdiction of the Commercial Courts and others under the jurisdiction of the Courts of First Instance). The problem was explained in these terms:
“Reality teaches that, on many occasions, in the same case, in a single dispute, there are matters that are intimately linked to each other, some purely civil and others mercantile (so to speak, those attributed to the Commercial Courts), in such a way that, if they are not resolved jointly and before the same jurisdictional body, there is a serious risk of division of the continuity of the case and of contradictory sentences being handed down, with all that this implies in terms of the most elementary legal certainty being undermined.
To avoid such situations arising in cases such as the present one, it is the legislator’s task to establish a rule of connection (or forum connexitatis) by virtue of which a single court can be assigned to hear actions or related matters whose normal assignment (in the absence of such related matters) corresponds to different courts.
However, this has not been done in the case of the commercial courts. That is to say, no rule of connection has been established to determine the attribution to a single body (the Commercial Courts or the Courts of First Instance) of cases with related matters, which normally correspond to one or the other bodies. And the absence of this rule is causing serious problems of jurisdiction in practice” (op. cit., pp. 59 and 60).
And, after the analysis of the problem, with reference to the different criteria maintained, it concluded with a proposal for a solution. Let me extract two passages:
“This being the case, it only seems that the situation can be remedied by the legislator. And the solution cannot lie in maintaining the separate jurisdiction of the Commercial Courts and the Courts of First Instance and, consequently, the inappropriateness of the accumulation of actions, with the almost absolute protagonism of the suspension due to civil prejudiciality as the only means of avoiding contradictory decisions. The reasons against are to be found both in the opinions and in the court decisions that are in favour of the accumulation of actions and, therefore, the jurisdiction of the Commercial Courts in these cases. Reasons that, in short, result from the most elementary common sense and from taking into account principles and rights, some of them already mentioned and many of them of constitutional rank, as important as those of legal certainty, equality, effective judicial protection, unity and concentration of proceedings, procedural economy, speed and the right to a process without undue delay, absence of contradictory decisions, or avoidance of the division of the continuity of the case and the so-called ‘pilgrimage of jurisdictions’ (or, better said, ‘pilgrimage within the civil jurisdiction’).
The solution, on the other hand, must be sought in the establishment of a clear rule of connection, which resolves the problems of jurisdiction and avoids a different procedural regime depending on whether or not there is a commercial court in the province where the dispute is being heard, by attributing jurisdiction to the commercial courts to hear cases with related matters” (op. cit., pp. 63 and 64).
The problems caused by the absence of a rule of connection reached the Supreme Court, in the case that had arisen most frequently in practice: the exercise of an action against a company claiming payment of a debt derived from an ordinary contractual relationship; and, at the same time, the exercise of another action demanding the joint and several liability of the company’s directors for the company’s debts and/or the exercise of one of the general actions for directors’ liability.
Thus, in its relevant Plenary Judgment of 10 September 2012 (Roj: STS 7528/2012), issued with the declared purpose of unifying the interpretation of the law in the face of the discrepant doctrine of the Provincial Courts, the High Court concluded that in these cases, joinder was possible and jurisdiction should be attributed to the Commercial Courts in accordance with the principle of speciality:
“This Chamber considers that the action for claiming an amount against a commercial entity and the action for liability of the administrators for the debts of the commercial entity can be accumulated for processing and decision in the same process before the commercial courts”.
This conclusion was based on the reasoning contained in the third ground of law, from which some passages are extracted:
“[…] if the possibility of joinder is not allowed, the demand for liability of the directors for breach of corporate debts entails the requirement to bring a double action before the courts of first instance, competent to hear the claim against the company, and before the commercial courts, competent to hear the liability of the directors on the basis of the breach by the company, if the reimbursement of the amounts owed by the company is sought.
The unjustified burden of a duplication of proceedings is disproportionate; and this feature means, according to constitutional case law, that it must be considered contrary to the right to effective judicial protection. In effect, it means imposing on the creditor the need to bring two actions before different courts for the exercise of a single claim for compensation. Both proceedings have the same purpose, are interdependent and must be brought by the same creditor against those who are jointly and severally liable. The disproportionality of the burden imposed is particularly clear in the frequent cases in which the situation of the company prevents the plaintiff, even with a judgment in his favour, from obtaining the effectiveness of his claim.
This Chamber considers that the situation described does not correspond to the will of the law, but to a legal loophole. The LEC does not directly allow for the possibility of accumulation in these cases, but neither does it resolve the situations of prejudiciality between the courts of first instance and the commercial courts.
[…]
Well, in the opinion of this Chamber, the analogical application of the rules on joinder allows, in this case, for the joinder of the actions we are considering to be admitted, given that the prohibition on the joinder of actions before a court that lacks jurisdiction to hear any of them admits various exceptions, among which is that the law so provides for specific cases (article 73.2 LEC). We understand that the regulation of the liability of the company administrators, with the characteristics that have been highlighted, in close relation to the insolvency of the company and the non-payment of its debts implicitly entails the mandate, required by the respect for the right to effective judicial protection proclaimed by the EC, of the possibility of accumulation of both actions.
It remains to be decided which body is competent to decide when such joinder occurs. The Chamber considers that it should be brought before the commercial courts, for the following reasons:
(a) Before the commercial courts, the more specific action on directors’ liability is brought, which is of a principal nature with respect to the action for breach of corporate duty, which operates as a prejudicial action with respect to the former. This is inferred from the analogous application of the rules on civil preliminary rulings, from which it is inferred that the jurisdiction to resolve a question that is preliminary in nature with respect to another corresponds to the court with jurisdiction to hear the main question. Consequently, in the absence of a specific legal regulation, this solution must be considered preferable to that which would result from the application of the principle of disposition by the plaintiff (Article 71.2 LEC, in the case of joinder of actions) or greater seniority of the proceedings (Article 79.1 LEC, in the case of joinder of proceedings), articulated in consideration of the situation of judicial bodies with parallel competences”.
More recently, in fact, just before the reform, the Constitutional Court has ruled on this same issue in its Plenary Order of 7 April 2022 (ECLI:ES:TC:2022:67ª), concerning a question of unconstitutionality raised by the Commercial Court No. 1 of Granada in relation to Article 73.1.1 of the Civil Procedure Act (“LEC”). After an explanation of the discussion and its evolution, the Court rejected the question of unconstitutionality as “notoriously unfounded”. It considered, among other arguments, that
“…] the legal loophole can be filled by analogy and this has been done by the body called upon to unify the interpretation of ordinary law, which is the Supreme Court, here its First Chamber, with a consolidated doctrine according to which, although the joinder under discussion is not expressly provided for, it is not prohibited either; and, by analogical application of art. 73.2 LEC, which contains an open clause of accumulation, in view of the characteristics of the individual action for liability, it has concluded that it can and must be resolved by the commercial courts jointly with that of the entity’s breach of contract”.
The connecting rule has been a long time coming. It has been 18 years since the Commercial Courts came into operation (16 since the commentary cited above and 10 since the 2012 Judgment reproduced above). We now have it with us. Let us see what it is, whether it is inspired by the criteria established by the case law of the Supreme Court and, above all, whether it has been correctly formulated.
The first final provision three of the LO 7/2022 determines the introduction of two new second and third paragraphs to the first subsection of section 1 of Article 73 LEC, which is worded as follows (the addition is marked in bold):
“In order for the joinder of actions to be admissible, the following shall be required:
- The court which is to hear the main action must have jurisdiction and competence by reason of the subject matter or amount to hear the joined action or actions. However, the action that is to be heard in an ordinary trial may be joined with the action that, on its own, would have to be heard in an oral trial due to the amount involved.
Notwithstanding the provisions of the preceding paragraph, when several related actions are initially joined whose hearing is attributed to courts with different objective jurisdiction, the Commercial Courts shall be competent to hear all of them if they have jurisdiction to hear the main action and the others are related or prejudicial to it. If there is no such connection or prejudicial nature, the procedure shall be as provided for in paragraph 3.
When the main action must be heard by the Courts of First Instance, the initial joinder of any other actions that do not fall within their objective jurisdiction shall not be permitted, in accordance with the provisions of the first paragraph of this section.
- that the joined actions shall not, by reason of their subject matter, be heard in trials of a different type.
(3) The law does not prohibit joinder in cases in which certain actions are brought by reason of their subject matter or by reason of the type of trial to be followed.
Different actions may also be joined in the same lawsuit when so provided by law in specific cases.
If several actions have been improperly joined, the Legal Secretary for the Administration of Justice shall require the plaintiff, before admitting the claim, to remedy the defect within five days, maintaining the actions whose joinder is possible. Once the period has elapsed without the correction being made, or if the circumstance of non-accumulability between the actions that the plaintiff intends to maintain is maintained, he shall inform the Court so that it may decide on the admission of the claim”.
To complete the rule of connection, final provision four of LO 7/2002 adds a new second paragraph to section 2 of Article 77 LEC with the following wording:
“Notwithstanding the above, the joinder of proceedings may be requested before the Commercial Court, even if it is not hearing the oldest proceedings and one of them is being processed before a Court of First Instance, provided that the other requirements mentioned in Articles 76 and 78 are met”.
And, with the same purpose, final provision seven of LO 7/2002 establishes the rule applicable to cases of counterclaims (or allegation of nullity in the defence), by introducing three new paragraphs to section 2 of Article 406 of the LEC, which is worded as follows (the addition is also marked in bold):
“2. A counterclaim shall not be admissible when the Court lacks objective jurisdiction by reason of the subject matter or the amount or when the action to be brought must be heard in a trial of a different type or nature.
However, a related action may be brought by way of a counterclaim if, by reason of the amount involved, it is to be heard in an oral hearing.
Similarly, if a case is being heard before a Court of First Instance and a counterclaim is brought by way of a related action to the main action that falls within the jurisdiction of the Commercial Courts, after hearing the plaintiff and the other parties involved for a period of five days, the Court of First Instance shall decline jurisdiction over the matter and shall refer the case file as it stands to the Commercial Court that has jurisdiction over it.
The same shall apply where the defendant pleads the nullity referred to in Article 408(2) and the nullity is based on a matter within the jurisdiction of the Commercial Court.
The order rejecting the counterclaim on the grounds of lack of objective jurisdiction to hear the counterclaim may be appealed against, suspending the main proceedings until said appeal is resolved”.
From these provisions it can be seen that the rule of connection consists of admitting the possibility of the cumulative exercise of related actions, the hearing of which is attributed to courts with different objective jurisdiction (Courts of First Instance and Commercial Courts) and in the attribution of jurisdiction for the hearing of such cases to the Commercial Courts. It is, therefore, the solution that legal operators had been demanding and that the Supreme Court had adopted in 2012 in the specific case (the most frequent) of the cumulative exercise of an action for claiming an ordinary debt against a company and the action for liability for corporate debts against its administrators.
There are two requirements for the application of the rule. The first is that the main action falls within the jurisdiction of the Commercial Courts. Secondly, the other actions must be related or prejudicial to the main action. If the main action falls within the jurisdiction of the Courts of First Instance, it will not be possible to join the related actions that fall within the jurisdiction of the Commercial Courts, nor can these be formulated in the form of a counterclaim.
The language used is consistent with that already used in Article 73.1.1.1.º LEC in establishing, as a general requirement for the joinder of actions, that the court that is to hear the main action must have jurisdiction and competence by reason of the subject matter or by reason of the amount to hear the joined action or actions.
However, the determination of which of the actions brought is the main action is left to the individual case. This task will be simple if one action is brought as main action and the others as subsidiary actions. In other cases, if several actions are brought as main actions, problems of interpretation and application of the rule may arise. We can take as a reference to explain this the type of cases that gave rise to the aforementioned Supreme Court Judgment of 2012: in these cases, the action for claiming the debt against the company (competence of the Courts of First Instance) and the action for joint and several liability of directors for company debts (competence of the Commercial Courts) are brought at the same time. Technically, both are main actions. However, the Supreme Court decided to attribute jurisdiction to the specialised bodies because:
“(a) Before the commercial courts, the more specific action on directors’ liability is brought, which is of a principal nature with respect to the action for breach of corporate duty, which operates as a preliminary ruling with respect to the former. This is inferred from the analogous application of the rules on civil preliminary rulings, from which it is inferred that the jurisdiction to resolve a question that is preliminary in nature with respect to another corresponds to the court with jurisdiction to hear the main question. Consequently, in the absence of a specific legal regulation, this solution must be considered preferable to the one that would result from the application of the principle of disposition by the plaintiff (Article 71.2 LEC, in the case of joinder of actions) or greater seniority of the proceedings (Article 79.1 LEC, in the case of joinder of proceedings), articulated in consideration of the situation of judicial bodies with parallel competences”.
As can be seen, the Supreme Court considered the action for directors’ liability to be the main action with respect to the action for claiming an amount against the company, “which operates as a preliminary action with respect to the former”. And earlier it said that the former is, moreover, the more “specific” one. However, in the case of joint and several liability, it does not seem so obvious that the directors’ liability action is the “main” one and that the action for claiming an amount is “prejudicial” to the former. It is clear that the action for directors’ liability is “more specific”, an expression that does not respond to a predetermined technical-normative concept, but which is in keeping with the fact that it is an action specific to company law, in which the principle of specialisation is present, which recommends that the Commercial Courts should hear this type of case (accumulated exercise of related actions). And the connection between the two actions is also naturally apparent, since, in short, it is a question of claiming the same debt, albeit from different parties and on different legal grounds. In any case, it does not seem too risky to predict that, in this specific case, the application of the rule of connection, in relation to the previous case law, will allow us to understand that these actions can be brought together and that the Commercial Courts will continue to have jurisdiction. It will be interesting to see how the rule is applied in different cases, in which the criterion may not be so consolidated. I leave an example by way of a question open to discussion and to close this commentary. Would it be possible to bring a combined action challenging a corporate resolution for breach of a shareholders’ agreement – ex article 204.1 II of the LSC for damage to the corporate interest, regardless of the greater or lesser grounds for the attempt – and, at the same time, an action for compliance with the same shareholders’ agreement? Could the former be considered the main action and the latter as related or prejudicial to the former?