Although the literal wording of Article 44 of the Spanish Insolvency Law seems clear, the objective competence of the Courts of First Instance, in the case of a natural person who is not a businessman, is proving to be controversial due to the existence of two clearly conflicting criteria depending on the Provincial Court in charge of resolving the case.
The prototypical profile with which the interpretative conflict may arise is that of a natural person who at the time of filing for insolvency proceedings is a worker, pensioner or unemployed person and whose debts derive mainly from a previous business activity (carried out on his own account or through a commercial company).
On the one hand, we find the group of Courts that, departing from the literal wording of the precept, consider the natural person whose indebtedness comes mainly from his previous business activity to be an entrepreneur, even though at the time of filing the insolvency proceeding, he does not hold the status of entrepreneur.
We can cite as examples the following rulings that resolve negative conflicts of jurisdiction in favor of the Commercial Courts: Madrid Court of Appeals of September 16, 2016, Granada Court of Appeals of October 17, 2019, or Jaén Court of Appeals of January 28, 2021.
On the other hand, we find another set of Courts that consider that the situation of the debtor at the time of the request must be taken into account, since this is what is clear from the literal wording of the rule. They understand that if the legislator had intended to take into account the origin of the debts as a determining factor to establish jurisdiction, this would have been expressly established in the Insolvency Law.
The following Orders are advocates of this second interpretative criterion, granting jurisdiction to the Courts of First Instance: AP of Murcia of July 28, 2016, AP of Alicante of November 11, 2016 or AP of Valencia of June 15, 2017.
In our opinion, although it would be fairer to attend to the first of the criteria, granting jurisdiction to the Commercial Court to hear the insolvency proceedings of the natural person who is not a businessman whose debts come from a previous business activity, this is a jurisprudential creation that moves away from what was intended by the legislator, which contributes to provide the system with legal uncertainty.
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