Actio Pauliana in EU Private
International Law: A Matter Relating
To A Contract?
HOW THE CJEU HAS QUALIFIED IT OVERTIME AND THE
PROBLEMS THAT ARISE FROM INCLUDING IT IN CONTRACTUAL
MATTERS FOR JURISDICTION AND APPLICABLE LAW
Patricia M. Rebull Corral prebullc@gmail.com
Student number: 12944491
Master track: European Private Law Supervisor: Dr. Aukje van Hoek 8 January 2021
ABSTRACT
The Court of Justice of the European Union has included, for the first time, the actio pauliana under the umbrella of the special forum of article 7(1)(a) of Brussels I bis Regulation of contractual matters in the Feniks case. This ruling has had certain impact, because not only the arguments the Court used to motivate their decision differ from previous judgements, undermining some basic core principles of in the Private International Law Regulations, namely legal certainty and predictability, but it has also instigated the debate around which should be the competent jurisdiction and the applicable law to such action.
TABLE OF CONTENTS
1 INTRODUCTION 4
2 THE ACTIO PAULIANA IN EUROPEAN LAW 6
2.1 LACK OF A UNIFORM QUALIFICATION OF THE ACTIO PAULIANA WITHIN EUROPEAN
LEGISLATIONS 6
2.2 THE COMMON ELEMENTS OF THE ACTIO PAULIANA 9
3 CONFLICT OF JURISDICTION 11 3.1 BEFORE FENIKS 11 3.1.1 REICHERT I 11 3.1.2 REICHERT II 12 3.2 FENIKS CASE 15 3.3 REITBAUER CASE 18
4 CONLFICT OF LAWS: APPLICABLE LAW 20
4.1 BEFORE FENIKS 20
4.2 AFTER FENIKS 22
5 CRITICAL ANALYSIS 26
5.1 PREDICTABILITY OF THE FORUM 26
5.2 NO CONTRACT BETWEEN THE PARTIES 27
5.3 A DISCERNING (AND OVERLOOKED) VIEW:ADVOCATE GENERAL’S OPINION IN THE
FENIKS CASE 29
5.4 GAPS IN THE SYSTEM 30
6 CONCLUSIONS 31
1 INTRODUCTION
Actio pauliana is articulated as a means of protection to the credit right of a creditor who is affected by a fraudulent act carried out by his debtor. Basically, it refers to a series of means that grant protection to the creditor when their debtor has diminished their assets in order to put such property out of the reach of their creditor1.
Its origins are found in Roman Law, in the Digest2:
“nemo liberalis nisi liberatus”
This Latin aphorism indicates that no one can carry out acts of liberality while having outstanding debts, with the consequent recognised contestability of the damaged parties by whoever contravenes it. This roman principle is often repeated in Civil Law literature and doctrine, and all legal systems have a way to protect this right of a creditor to collect their debt.
In European Private International Law, however, the actio pauliana is not being directly dealt with in the legal instruments, and this has given rise to problems when an actio pauliana is to be exercised3. As we will see in the following chapters, the Court of Justice
of the European Union (CJEU) has had difficulties qualifying such action in the different cases presented before them, which has led to legal uncertainty in the matter. Until recently, actio pauliana was considered to be within the scope of the legal provisions of extra-contractual liability; this changed with the Feniks case, where they concluded that the actio pauliana is a matter relating to a contract. With this, we want to answer the question of why does the CJEU qualify the actio pauliana as a “matter relating to a contract” and what are the implications and consequences of this qualification when establishing international jurisdiction and determining the applicable law. As we will see, this solution the CJEU does quite end the debate around the qualification of the actio pauliana; if anything, it has added fuel to the debate.
1 Ilaria Pretelli, “Cross-border Credit protection against fraudulent transfers of assets: Actio Pauliana in the Conflict of Laws”, Yearbook of Private International Law, vol. 13, 2011, pp. 589-640.
2 Ibid, p. 594.
3 The actio pauliana we will focus in this paper is outside of insolvency proceedings, as it is excluded from the scope of Regulation Brussels I bis. Therefore, any reference to actio pauliana that falls within the scope of the Insolvency Regulations will be left out of this paper.
In the first chapter we will briefly go through the actio pauliana in the different legal systems and the qualification within these legal systems of the European Union, to understand and prepare for the following sections. The legal systems that will be studied have been selected for their relevance in European Law in general and because they are linked to the case law of the CJEU we will analyse. In particular, because the parties involved in the cases are from these countries and the legislation cited in the judgment refers to their Civil Codes or Acts.
Next, we will study the actio pauliana in EU Private International Law and the jurisprudence of the Court of Justice of the European Union. Indeed, when we face a conflict involving two or more private parties where there is a foreign element, Private International Law rules apply. In this subject, there are three separate sections that deal with different problems4: first, international jurisdiction, which decides which body has
jurisdiction to hear the claim; then, the conflict rules will determine which is the national law applicable to solve the conflict by the competent judicial body5; and lastly,
recognition and enforcement of foreign judgments, which involves analysing the effectiveness of cross-border nature judgments. For the scope of this paper, the third area of recognition and enforcement will be left out, since it has not relevance for the present topic and the aim of this paper.
Chapter 3 will be focused on jurisdiction, where we will study the system of Brussels I bis and the evolution of the CJEU on cases where an actio pauliana has been exercised; and Chapter 4 will be dedicated to applicable law, where we will go back to the judgments analysed but from the perspective of Regulations Rome I and Rome II.
Finally, in the last chapter, we will comment from a critical point of view some of the points that are more controversial around the Paulian action, especially when it comes to the decision of the CJEU to include it under contractual matters. As we will see, Attorney General Bobek has a discerning opinion on the Feniks case.
4 Francisco J. Garcimartín Alférez. Derecho internacional privado, 4ª ed., Aranzadi, Cizur Menor, 2017, p. 36.
5 This national law can or not be the same law of the forum. The judicial body will have to apply the national law indicated by the conflict of law rules.
2 THE ACTIO PAULIANA IN EUROPEAN LAW
This section is aimed to be a Comparative Law exercise, to get a general picture of how the actio pauliana is seen and dealt with in different legal systems in the European Union. In the first part, we will discuss how the actio pauliana is regulated in different European codes. In the second subsection, we will look more closely to what the actio pauliana is according to the CJEU.
2.1 Lack of a uniform qualification of the actio pauliana within European legislations
To this date, there is no specific regulation at a European level that expressly mentions the actio pauliana outside of insolvency proceedings. However, the Court of Justice of the European Union has referred to it as “national rules which, in the member States, provide that certain acts of a debtor to the detriment of the interests of creditors and, in particular those which are of a fraudulent nature vis-à-vis creditors, either cannot be pleaded against the creditors or may be set aside under procedures specifically prescribed for that purpose”6. In this section we will see some of these national rules, to get a basic
idea of what the actio pauliana is regulated in different European legal systems. These legal systems have been selected because of their connection to the legal cases we will discuss in the following chapters.
First, in Spanish Civil Law we find the actio pauliana under the denomination of “rescindable contracts” in articles 1.111 and 1291.3 of Libro Cuarto de Obligaciones y Contratos del Código Civil. The part referring to the Paulian action is the last sentence of the article 1.111 Código Civil says that the creditor may bring an action to challenge acts which his debtor has performed, and which are prejudicial to him. However, this article does not include neither the requirements needed to exercise it or the effects. Although its conception has varied over time, the jurisprudence establishes that there are two requisites for the Paulian action: the eventus damnis and the consilium fraudis. The first refers to the damage suffered by the creditor who is unable to collect the credit and is the
6 Judgment of 1 March 1983, Case 250/78, Deka Getreideptodukte GMBH & Co v European Economic Community, para. 15.
objective element of the action. And the second refers to the existence of fraud in the creditor's claim, this being the subjective element7.
This article is supplemented by Article 1.291 of the Código Civil, which sets out the grounds for termination of contracts, and in particular the third paragraph thereof: "Those concluded in fraud by creditors, when the latter cannot otherwise collect what is due to them". Therefore, when an act has been carried out in fraud of creditors, it may be cancelled when the creditor has no other means to collect. The subsidiary nature of the actio pauliana is recognised here, i.e. when no other means of recovery are available. The following articles provide for the regulation of the termination of contracts, not only on this ground, but also which also includes others such as termination for injury.
The two articles cited are found in Book IV on Obligations and Contracts, although the first is in Chapter II, on the nature and effects of the obligations and the second, in Chapter V, of the termination of contracts. Therefore, we see the in the Spanish legislation how this action is linked to the subject matter of contracts.
Likewise, in French law the actio pauliana is included in the contracts chapter in the Code Civil. As it is set out in article 1.167, creditors may contest the acts of the debtor which have been committed in violation of their rights. However, the article follows, they must do so in accordance with the rules laid down in the title "On succession" and the title "On marriage contracts and matrimonial property regimes".
In Dutch law, both the Civil Code (art. 3:45 to 3:48 Burgerlijk Wetboek) and Faillissementswet regulate the actio pauliana. In Dutch law, interestingly, an extrajudicial declaration suffices and does not require a lawsuit; in reality, however, the parties will disagree in the validity of the declaration and will bring the subject to the courts8.
German tradition has had a different approach than the abovementioned legal systems. Their legal system parted from not including the actio pauliana in their Civil Code, but
7 Joaquim J. Forner Delaygua, “España: Derecho europeo: La acción pauliana bajo TJCE (una opinión discrepante de Recihert II)”, en J. J. Forner Delaygua, (ed.), La protección del crédito en Europa: La acción
pauliana, Barcelona: Bosch, 2000, p. 59
8 Antoni Vaquer, “Traces of Paulian Action in Community Law”, in R. Schulze (ed), New Features in
in the insolvency laws9, and in a specific law for this action outside insolvency
procedures. In German law, the Paulian action has an obligatory nature and is manifested in the satisfaction of the creditor's credit if necessary, with the revocation of the acts on assets that belonged to the debtor10.
In Germany, the institutions for contesting creditors and challenging insolvency are regulated by the Challenge Act (Anfechtung) and the Insolvency Regulation (Insolvenzordnung). Although the Bürgerliches Gesetzbuch11 (BGB) contains grounds
for challenge, they are not the same as those applicable to situations covered by the Anfechtungsgesetz (AnfG)12 and Insolvenzordnung (InsO). The grounds of challenge
listed by the BGB refer to situations where the debtor has been misled, threatened or misled in making a declaration of intent. An individual's freedom is therefore protected, which is a different legal right from that protected by the objection13.
According to Article 1 of the AnfG, in cases where a legal act is contested outside the insolvency proceedings, the provisions of the AnfG must be complied with. The AnfG therefore allows the creditor who has been unable to satisfy his claim by enforcing the debtor's assets, or even if he assumes that he would not do so, to challenge the act performed by the debtor with the intention of harming him. It also requires that the other party, that is to say the third party, must be aware that that act affected the debtor's solvency and was likely to harm the creditors.
Lastly, in Poland, the Paulian action is regulated by Articles 527 et seq. of the ustawa Kodeks cywilny14, which seeks to declare ineffective acts of disposition carried out by the
debtor in fraud of the creditor's right to credit, where by that act the debtor has become
9 Ibid, p. 430
10 Briseida Sofía Jiménez Gómez, “Competencia Judicial International para conocer de la acción pauliana”,
Cuadernos de Derecho Transnacional, vol. 11 (1), March 2019, pp. 791-800, p. 792.
11 German Civil Code
12 The full name is the Gesetz über die Anfechtung von Rechtshandlungen eines Schuldners außerhalb des
Insolvenzverfahrens of 21 July 1879, which entered into force on 1 October 1979 and has since been
amended many times
13 N. Hoffmann, “Alemania: La actio pauliana en Derecho alemán: impugnación de los acreedores según la ley de impugnación y la regulación referente a la insolvencia”, in J. J. Forner Delaygua, (ed.), op. cit., pp. 21-22.
insolvent or has increased the situation of insolvency15. It also requires that the debtor has
acted in a conscious manner and that the third party acquirer was aware or could have been aware of the detriment that the act might cause. The latter requirement is not required where the act was performed free of charge. In addition, the third party may satisfy the claim himself or bring the goods to his attention of the debtor for satisfaction in accordance with Article 533.
In conclusion, the regulations of these European countries are not the same, but each one has been developing the precepts of its legal system according to its own legal tradition. These differences mean that unifying the actio pauliana is not an easy task because by placing it in different laws, its nature is not the same either. This problem also arises when a legal relationship involves a foreign element that entails the application of rights from different countries, as will be analysed later.
2.2 The common elements of the actio pauliana
The CJEU has dealt with actio pauliana in a number of cases, as we will develop in the next pages, but what is important to emphasise is that in that Case 270/78 Deka16, is that
all the national rules regarding this type of action are the expression of the general principles that the national law of the Member States have in common17. Indeed, common
elements of such action, in particular three, are highlighted by Advocate General Bobek in the Feniks case. Firstly, there has to be a damnus, meaning that there is damage to the creditor at the time the action is brought; secondly, there has to be consilium fraudis, which is the debtor’s intention to harm their creditors by diminishing the assets of theirs estate and, lastly, that this third party acted in bad faith (scientia fraudis) 18.
AG Bobek resorts to Roman Law, the very origin of the actio pauliana, to extract these elements. Indeed, in the Digest the action was based in these two assumptions.
In some legal systems, bad faith is no longer analysed in certain cases, due to the objectification of the creditor’s protection (particularly in the case of gratuitous transfers);
15 Judgment CJEU of 4 October 2018, C-337/17, Feniks v. Azteca, [ECLI:EU:C:2018:805], para. 8-13 16 Judgment of 1 March 1983, Case 250/78, Deka Getreideptodukte GMBH & Co v European Economic Community.
17 A. Vaquer, “Traces of Paulian Action in Community Law”, loc.cit., pp. 433-435.
18 Opinion of Advocate General Mr. Michael Bobek, 21 June 2018, Case C-337/17, Feniks, [ECLI:EU:C:2018:487], para. 34 and following. (From here on, Opinion AG Bobek).
it rather focuses on the notion of detriment of the debtor’s assets as a cause of prejudice of the creditor19. However, it is clear that the different variations of actio pauliana at
national levels carry out a similar function, which is merely to declare the unenforceability of an act of disposition by the debtor in favour of a third party against the creditor bringing the action.
3 CONFLICT OF JURISDICTION
Firstly, we must identify which court should hear the claim. To carry out this task, there are various regulations drawn up by the European Union in the field of judicial cooperation in civil matters, the most important being Brussels I bis20 since the actio
pauliana falls within the scope of civil matters.
In order to determine which body is responsible for prosecuting a case where a pauliana is to be brought, we must look into case-law of the Court of Justice of the European Union. The Court of Justice has not always placed the actio pauliana within the same sphere but has given several negative qualifications to understand its nature.
3.1 Before Feniks
3.1.1 Reichert I
The first case where the Court of Justice of the European Union ruled on actio pauliana was Judgment Reichert I21 (C-115/88). In this case, the French Court had declared
competent based on a jurisdiction that prevented the parties to designate a court: an exclusive jurisdiction, that overruled the general rule of defendant’s domicile22.
The question referred for a preliminary ruling was intended to ascertain how that article should be interpreted, in order to ascertain whether, as a result of it, the Convention had created a rule of jurisdiction which took account only of the legal substance of the question, without regard to the real, personal or mixed nature of the action brought23. It
20 There are also a number of conventions that regulate specific matters, but none of them deal specifically with Paulian action. So, as this action is within civil and commercial matters, we will focus on the Regulation mentioned.
21 Judgment CJEU of 10 January 1990, C-115/88, Reichert v. Dresdner Bank [ECLI:EU:C:1990:3] (Reichert I).
22 This case arose in the national proceedings brought in French Courts by a German bank, the creditor, against a German couple and their son, the debtors. The couple donated their property, which was in a municipality in France, to their son. The transfer of ownership was done before public notary by means of a public deed. The German bank contested the donation on the basis of article 1.167 of the French Code
Civil. Despite the fact that the French court declare itself competent on the basis of article 16(1) of the
Brussels Convention of 27 December 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters: “The following courts shall have exclusive jurisdiction, regardless of domicile: 1. in
proceedings which have as their object rights in rem in, or tenancies of, immovable property, the courts of the Contracting State in which the property is situated;”. The couple challenged that exclusive jurisdiction
before the Cour d'appel d'Aix-en-Provence, which referred a question to the Court of Justice for a preliminary ruling as to whether the actio pauliana fell within that category.
therefore sought to establish whether the Paulian action could be brought before the Court of the Member State in which the property was situated.
In order to do so, it was necessary to clarify the meaning of the expression “in matters relating to rights in rem in immovable property” on the basis of the autonomous concept specific to Community law, bearing in mind that Article 16 was not to be interpreted broadly, but to its purpose, which justified this exclusive jurisdiction of the courts of the Member State in which the property is situated by virtue of their better knowledge of the factual situation given its greater proximity and the possibility of applying the rules and uses of the location of the property.
Therefore, that jurisdiction did not cover all actions relating to immovable property rights, but only those which, in addition to falling within the scope of the Convention, sought to determine the extent, consistency, ownership or possession of immovable property, or also the existence of other rights in rem, and to ensure that the holders of the rights were protected in respect of the powers attaching to those rights24.
The CJEU concluded that the actio pauliana was not included within the actions mentioned, because its basis was a credit right, a personal right of the creditor against the debtor, seeking to protect the guarantee that the creditor has in the debtor’s assets. Consequently, the Court understood that the actio pauliana did not fall within the scope of application of the exclusive jurisdiction of article 16 (1) of the Brussels Convention. Here we find the first negative qualification of the Paulian action, when the Court considers that said action is not included within the category of in rights in rem in immovable property, the disputes relating to which are the exclusive competence of the courts of the country where the real estate is located, formula that, therefore, is not transferable to Paulian action.
3.1.2 Reichert II
Secondly, the judgment Reichert II25 (C-261/90), 26 March 1992, based on the same
national procedure mentioned above, resolves a preliminary ruling on the interpretation
24 Reichert I, para 11.
of Article 5 (3), Article 16 (5) and Article 24 of the Brussels Convention of 196826.
Following the first resolution (Reichert I), the Cour d'Appel, by means of this complementary preliminary question, sought to know whether the three articles cited were applicable to the case considering the possible existence of a criminal or quasi-delict fraud, as well as the concurrence of precautionary measures that would be transformed into enforcement measures.
Regarding paragraph 3 of article 5 of the Brussels Convention27, it is necessary to start
from an autonomous concept of delict or quasi-delict matters, which include claims that seek to demand responsibility of the defendant and it is not a matter relating to a contract, included in the section 1 of the same article28. Likewise, in a previous case, Kalfelis
(C-189/87), 27 September 1988, the Court established that the scope of delict or quasi-delict matters “must be regarded as an independent concept covering all actions which seek to establish the liability of a defendant and which are not related to a ‘contract’ within the meaning of Article 5 (1)”29. On the other hand, the Folien Fischer judgment (C-133/11),
establishes that a negative declaratory action is also included in the field of delict or quasi-delict, that is, that this category includes an action that seeks to declare the non-existence of delict or quasi-delict responsibility, because the ECJ considers that “Admittedly, there is a difference between, on the one hand, the interests of the applicant in an action for a negative declaration and, on the other, the interests of the applicant in proceedings seeking to have the defendant held liable for causing loss and ordered to pay damages. In both cases, however, the examination undertaken by the court seised essentially relates to the same matters of law and fact30”.
26 This case arises from the same parties of the Reichert I case. However, the German bank relied on other articles of the 1968 Convention for the French Court to be competent. Specifically, it appealed the application of Article 5.3, Article 24 or Article 16.5 of the aforementioned Convention. Consequently, a new judicial question was raised regarding these articles to determine whether the Paulian action, despite not being included in the exclusive jurisdiction related to real estate rights in rem and real estate leasing contracts, could fall within the scope of application of the subjects of the cited articles.
27 “A person domiciled in a Contracting State may, in another Contracting State, be sued: 3. in matters
relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred;”.
28 Judgment CJEU 26 March 1992, C-261/90, Reichert v. Dresdner Bank, para 17.
29 Judgment CJEU 27 September 1988, C-189/87, Kalfelis v. Shroeder Bank, Muenchmeyer, Hengst & Co. and others, para 17.
30 Judgment CJEU of 25 October 2012, C-133/11, Folien Fischer AG, Fofitec AG v. Ritrama SpA, [ECLI:EU:C:2012:664], para. 48.
Bearing in mind that in French law, the actio pauliana can be brought against acts of action in which the beneficiary acts both in bad faith and in good faith, and that the object of the action is to make them disappear before the creditor, but not requiring the debtor to repair the damaged caused, it is understood that said section does not fall within the scope of article 5 (3), since no liability of the defendant is required31.
However, this second negative qualification means that the actio pauliana remains in no man’s land, because until then it was considered that what was not contractual, was non-contractual32.
In turn, article 16 (5) Brussels Convention contains an exclusive jurisdiction, attributed to the Courts of the State in whose territory the forced execution is requested, because it corresponds to them to apply the norms that must guide the actions of the authorities in charge of said forced execution33.
Based on the report of the Committee of experts that drafted the Convention, it should be understood that litigation related to the execution of decisions are those that take place with the use of force, coercion or dispossession of movable and immovable property to guarantee the effectiveness material of the resolutions. Hence, making a third negative qualification, the Court of Justice excludes that the actio pauliana can be integrated into Article 16 (5), because it is not aimed at resolving a dispute relating to one of the expedited remedies cited34.
Finally, regarding the application of article 24 Brussels Convention35, it is the creditor
who defends that the actio pauliana provides them with a provisional guarantee that in turn it is also a precautionary measure.
However, for the purposes of said article, precautionary measures must be understood as "measures to maintain a situation of fact or law that safeguards a right whose recognition
31 Reichert II, para 18-20.
32 J. J. Forner Delaygua, “España: Derecho europeo: La acción pauliana bajo TJCE (una opinión discrepante de Recihert II)”, en J. J. Forner Delaygua, (ed.), op. cit., p. 141.
33 Reichert II, para 26. 34 Reichert II, para 27-28.
35 “Application may be made to the courts of a Contracting State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Convention, the courts of another Contracting State have jurisdiction as to the substance of the matter.”
is requested", in addition, to the judge who hears the merits of the case36. Instead, the
actio pauliana is aimed at requesting judicially the legal modification of the debtor’s and creditor’s assets situation37. Therefore, they conclude that the actio pauliana cannot be
classified as a precautionary measure under article 24. We find here the fourth negative qualification that the CJEU gives, considering that the Paulian action is not, in any way, a provisional or precautionary measure.
From these two cases (Reichert I and Reichert II) could be inferred that the actio pauliana could only be invoked under the general forum of the defendant’s domicile. This is also a consequence of the existence of different conceptions in national law of the same action that make it difficult for an autonomous European concept to exist.
3.2 Feniks Case
In the Feniks judgment (C-337/17)38, of 4 October 2018, the Court took a different turn
and ruled that the actio pauliana is a matter relating to a contract, in the sense of article 7 of Brussels I bis Regulation. In this case, a Polish court had submitted two questions to the CJEU for a preliminary ruling: first, whether the Paulian action could fall within the scope of article 7 (1) (a) of Brussels I bis as a “matter relating to a contract”39; and second,
if in order for the action to succeed, the buyer had to be aware that the act had been carried out to the detriment of the creditors40.
36 Reichert II, para 34. 37 Reichert II, para 31 and 35.
38 The Feniks case also concerns the exercise of the Paulian action in a procedure before the Polish courts, in which the Feniks company challenges an act carried out by the company “Coliseum”. These two companies, both domiciled in Poland, had entered into a work contract acting within the framework of a real estate investment project also in Poland. Coliseum contracted with several subcontractors to carry out the project but did not fulfil its obligations to one of the subcontractors. Consequently, according to the Polish Civil Code, Feniks had to take over the payment. However, in January 2012, Coliseum sold a property located in Poland to Azteca, a company domiciled in Spain, as partial compensation for previous loans, even though Azteca had to pay part of the price. Faced with this situation, Feniks, having knowledge that the chairman of the Coliseum management body was also a representative of the company Horkios Gestión S.A., the only member of Azteca's management body, filed, on 11 June 2016, an action against Azteca before the Polish courts so that, due to the lack of patrimonial assets of Coliseum with which to satisfy its debt against Feniks, the contract of sale of the property would be declared ineffective. In order to justify the jurisdiction of the Polish court, Feniks invoked article 7 (1) (a) of Regulation Brussels I bis 39 Article 7: “A person domiciled in a Member State may be sued in another Member State: (1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;”.
It is important to point out that Article 7 includes special jurisdictions that must be interpreted in the strict sense, because they are alternative forums to the general one of the defendant's domicile. Thus, they are based on a close connection between the court and the dispute or also to facilitate the sound administration of justice.
In this way, the concept of contractual matter included in article 7 must be interpreted autonomously, guaranteeing a uniform application. According to EU jurisprudence, the application of this rule implies "the establishment of a legal obligation freely consented to by one person towards another and on which the claimant’s action is based41."
As already mentioned, through the actio pauliana, which is based on a credit right, it is intended to protect the guarantee that the creditor has in the debtor's assets. Consequently, in the matter analysed, the Court understands that this security right and the declaratory action of ineffectiveness available to the creditor, have their origin in the obligations freely assumed by Coliseum before Feniks within the framework of the work contract concluded by both companies42. Therefore, the purchase contract is understood to have
been carried out in fraud of the rights that arise from the binding force of the work contract and that come from the obligations freely assumed by the debtor. Consequently, there is a breach by the debtor of the obligations contracted with the creditor43.
This criterion of non-compliance has some deficits, because the Paulian action is not an action that is brought only against the debtor who has not paid but can be directed as well against a third party to declare the ineffectiveness of an act in which the creditor has not intervened44.
The CJEU justifies that the actio pauliana falls within the scope of contractual matters when said action is exercised by virtue of credit rights that have arisen from obligations assumed through the conclusion of a contract. In addition, the special jurisdiction of article 7 (1) (a) in this case would be based on the contractual origin of the relations between the debtor and the creditor, thus ensuring legal security and the sound
41 Feniks, para 39. 42 Feniks, para 42. 43 Feniks, para 43.
44 Ángel Espiniella Menéndez, “Competencia judicial internacional para acciones en fraude de acreedores: Sentencia del TJUE de 4 de octubre de 2018, asunto C-337/17: Feniks c. Azteca”, en La Ley Unión
administration of justice45. Therefore, the creditor may exercise the actio pauliana before
the jurisdictional body of the place where the obligation that serves as the basis of the claim has been fulfilled or should be fulfilled46. In this specific case, though, there are
two contracts. A first one between the creditor and the debtor, and a second one, between the debtor and the third. The CJEU chooses to base its decision on the existence of the first contract, although it is questioned that it is not based on the second contract, which is also the centre of the conflict because it is what has caused damage to the creditor. We will discuss this matter in depth in Chapter 5 from a critical perspective.
The final decision is based on the fact that the creditor, holder of a credit right, requests the ineffectiveness of an act that harms his rights, but that credit right is the result of a contract. Furthermore, it is considered foreseeable by the Court that a person who enters into a sales contract can reasonably expect that they may be sued by the creditor of the co-contractor in the place of performance of the obligations that the debtor and the creditor had47. This high degree of predictability is included in recital 15 of the Brussels
I bis Regulation, which establishes a series of rules regarding jurisdiction48.
In conclusion, as a result of the Feniks case, the Brussels I bis Regulation, specifically article 7 (1) (a), must be followed to determine the international jurisdiction in the cases in which the Paulian action is exercised when the creditor relies on a contract. Consequently, the courts competent to hear the claim will be the ones where the obligation where the claim has been or must be fulfilled, being that the general rule for the matters relating to a contract. However, “the place of performance of the obligation in question”, it is understood that it is the primary and relevant obligation in each case; and by "place of performance" it must be taken into account what the parties have stipulated in the contract and, failing that, what is established by the applicable material law, which is the law that governs the contract.
45 Feniks, para 44. 46 Feniks, para 46. 47 Feniks, para 47.
48 Recital 15: “The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few welldefined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.”
In the Feniks case, the Court considers that the obligation that serves as the basis for the claim is the one resulting from the first contract, that is, the contract between the creditor and the debtor. However, it must be borne in mind that there is a second legal transaction between the debtor and the third, so it may be questioned whether the latter should be considered as a basis for the action brought by the plaintiff, since in addition it is the act that is being challenged because the damage it is causing. Again, we refer to the last Chapter of this paper to see it from a different perspective.
3.3 Reitbauer case
Not long after the Feniks case, the Court of Justice had the chance to rule on a similar matter, the Case C-722/17 Reitbauer49.
Like what happened in Reichert I, Reitbauer and others tried to seek jurisdiction under article 24(1) Brussels I bis, alleging that their claim was closely linked to the property in Villach, which was unsurprisingly bound to fail50. The Court reiterated that this article
does not cover all actions regarding rights in rem in immovable property, but those “(…) actions which seek, first, to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and, secondly, to provide the holders of those rights with protection for the powers which attach to their interest51”.
After concluding that no exclusive jurisdiction rules were applicable to the case, the Court proceeded to analyse if there was a jurisdiction based on contractual matters, pursuant article 7(1). After a detailed motivation52, the CJEU confirms that Reitbauer’s action is a
49 The main dispute arises from the conflict between holders of various security rights in the same property. In particular, the holders of the lower-ranking security right seek to oppose, in the context of enforcement, the distribution of the proceeds of the forced auction of the property, in accordance with the possibilities offered by Austrian procedural law for bringing an opposition action. They invoke two grounds for opposition: the extinction of the claim of the other enforcing party because it has been compensated; and the nullity of the security right created by the other party, through the exercise of an action assimilated to the Paulian action. The Court of Justice's approach aims to confirm its previous case law, both in relation to the exceptional nature of the exclusive jurisdiction of Article 24(1) and (5), and in relation to the possibility of recourse to the jurisdiction in contractual matters of Article 7(1) RBIbis, in connection with the exercise of the Paulian action.
50 View shared with Michiel Poesen, in his article “CJEU confirms that an actio pauliana is a matter relating to a contract: Case 722/17 Reitbauer et al v Casamassima”, Michiel Poesen, 14 July 2019, online article available at https://conflictoflaws.net/2019/cjeu-confirms-that-an-actio-pauliana-is-a-matter-relating-to-a-contract-case-c-722-17-reitbauer-et-al-v-casamassima/ (accessed 28 December 2020)
51 Reibauer, para. 44. 52 Reitbauer, para. 56-62.
matter relating to a contract. The Court bases this by saying that since the basis of the creditor’s right is a contract, the action of avoidance falls under the category of “matters relating to a contract” set out in article 7(1)(a) of Brussels I bis Regulation53.
Consequently, this Article gives jurisdiction to the place of performance of the defrauded contract, place that would be Villach, Austria, where the renovation work was concluded54.
53 Reitbauer, para. 58. 54 Reitbauer, para. 62.
4 CONLFICT OF LAWS: APPLICABLE LAW
Once it has been determined which body has international jurisdiction, it is necessary to proceed to analyse which law should be applied in a case of actio pauliana to resolve it. For this, conflict rules indicate which legal system should be used, that is, the lex causae, that the courts will use to resolve the merits of the case. Likewise, conflict rules are referral rules because they will refer us to a legal system in which the solution must be found55. It is important to remember that these conflict rules do not offer a substantive or
direct answer to private international relationship. As they lack material content, its function is to locate said private relationship in a certain legal system that will offer an answer on the merits of the case.
In the conflict of laws territory, we have two important Regulations: Regulation 593/2008 on the law applicable to contractual obligations56 (Rome I) and Regulation 864/2007 on
the law applicable to non-contractual obligations57 (Rome II).
However, neither of the two mentioned Regulations contains any conflict rule for the actio pauliana. Furthermore, the fact that each State has a different regulation and the disparity of opinions on the legal nature of this action creates a situation that would require the effort of all States to unify the regulation of this legal action58.
4.1 Before Feniks
Until the Feniks case, it was not very clear which regulation should be used to determine the applicable law, because the CJEU, as we have seen, had established that the actio pauliana was neither a contractual nor a non-contractual matter. It is true that Rome II covers culpa in contrahendo, unjust enrichment and negotiorum gestio. Therefore, there is a gap that has been confirmed by the doctrine and by the Draft59 prepared by the Council
of the European Union regarding the instrument on the law applicable to non-contractual
55 F. J. Garcimartín Alférez. Derecho internacional privado, loc. cit., p. 300-301.
56 Regulation (EC) nº 593/2008 of the European Parliament and of the Council of 17 June 2008. 57 Regulation (EC) nº 864/2007 of the European Parliament and of the Council of 11 June 2007.
58 Laura Carballo Piñeiro, “Acción pauliana e integración europea: una propuesta de ley aplicable”, Revista
Española de Derecho Internacional, Vol. 64, Nº 1, 2012, pp. 43-72, p. 46.
59 See Council of the European Union document No. 11982/99, presented in Brussels on 9 December 1999, containing the Draft, available online at https://data.consilium.europa.eu/doc/document/ST-11982-1999-INIT/en/pdf
obligations that did include a conflict rule for the actio pauliana in its article 1060, but
that, as we know, was not included in the current Regulation61. Given this uncertainty, it
was considered that this action was not based on an obligation assumed voluntarily, so it ended up being included within the non-contractual matters.
Despite the fact that the CJEU in the Reichert II case established that the actio pauliana could not be included in non-contractual matters, it was considered that this jurisprudence should not be transferred in the area of conflict of laws. Consequently, it had been pointed out that the Rome II Regulation should be applicable in cases of actio pauliana in order to guarantee legal certainty and maximize legal unification within the European Union. However, it was not clear whether the actio pauliana, if it were included within the non-contractual matter, would be governed by the general rule contained in Article 4 of the Rome II Regulation or whether it was a special case of unjust enrichment. Even so, in both cases, Rome II should be taken into account.
The consequence of resorting to the Rome II Regulation would be the application of the lex loci delicti commissi, that is, the law of the country where the damage occurs62.
Through this applicable law the acquirer would be protected since it has a high degree of predictability63. CARBALLO PIÑEIRO argues that when considering the lex loci delicti
commissi as the applicable law, problems may arise in determining the place where the delict or tort has been committed where there have been multiple acts (including omissions), such as “the place of performance of the act, place where it is executed or begins to be executed, domicile of the debtor at the time of the act as the place where the damage to the patrimonial guarantee occurs, place where most of the defendant's assets are located before the transaction is made, and so on”.
60 Article 10: “The conditions and the effects arising from an obligation where a creditor may contest a
contract concluded by a debtor with a third party, endangering the satisfaction of the creditor [fulfilment of the claim], shall be determined by the law applicable to the obligation existing between the creditor and his debtor.” Draft instrument on the applicable law to non-contractual obligations, by the Council of the
European Union, of 9 December 1999.
61 Despite researching the reasons behind why they did not include a specific provision in the final text, the research has failed on this task and have found no sources as to why the actio pauliana was not included in the Regulations. Likewise, I could not find the Commission document behind this Draft, from the sources available online.
62 Article 4 Rome II Regulation.
4.2 After Feniks
However, the abovementioned possible solutions have been set aside with the latest decisions of the CJEU on the actio pauliana. The fact that the Feniks and Reitbauer cases consider that said action is a contractual matter, entails a change in the approach of the issue, because Recital 7 of the Rome I Regulation64, on contractual obligations,
establishes that the material scope of application and the provisions of this Regulation must “ensure consistency” with the Brussels I bis Regulation and the Rome II Regulation. Consequently, a solution should be sought within the Rome I Regulation.
Before start analysing Rome I, one important remark must be made: this Regulation has universal application as set in article 2, which means that any law will be applicable as specified by this Regulation, even when it is not the law of a Member State.
Having said this, it is necessary to analyse the solutions established by this Regulation in order to determine whether any of them can cover the actio pauliana. Specifically, they are collected in articles 3 and 4, dealing with the subjective and objective connection, respectively.
In the first place, article 3 establishes the “Freedom of choice”, that is, the parties can choose which law will govern the contract, thus collecting the universal principle of autonomy of the will. Furthermore, no conflicting boundaries are established so that the parties can choose any law in the world.
Second, article 4 sets out the law that will be applicable when the parties haven’t chosen any law to govern their contract, or have chosen partially, or the choice is not valid. This article is structured in four parts. First, a series of special rules are collected, but none of which mentions the actio pauliana. Second, the applicable general rule is established when none of the special rules apply. The general rule is that “(…) the contract shall be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence”65. Third, a closing clause is
included for cases in which the applicable law cannot be determined with either the
64 Recital 7 of the Rome I Regulation mentions the Council Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforecement of judgments in civil and comercial matters (Brussels I), replaced by Regulation 1215/2012, known as the Brussels I bis Regulation, but the recital is applicable in the current legislation.
special or general rules, and that law will be the law of the country that is most closely connected. Finally, an escape clause is also included and will operate in the event that there is a law that is "manifestly more closely connected" with a country other than that determined by the special and general rules.
Taking into account all these rules and clauses, it can be concluded, in the first place, that there is no special rule for an actio pauliana. Secondly, to apply the general rule, the characteristic performance of the contract should be identified, but in the actio pauliana there is no simple exchange of goods and money, but rather we are faced with two contracts: one between debtor-creditor and the other between debtor-third party. Consequently, we should go to the closing clause, that is, apply the law that presents the closest ties and that takes into account the interests of the creditor and the third party. For this reason, it is necessary to analyse some possible solutions in regards of the applicable law, trying to balance all the interests out, as well as not finding a rule that cannot be easily manipulated by the parties, in order to guarantee more legal certainty and provide greater protection.
A first possible solution could be resorting to the governing law of the creditor's main claim, that is, applying the law that governs the contract when there has been bad faith between the debtor and a third party66, if we understand that the actio pauliana is
accessory to the credit67.
Another possibility would be to apply the law of the place of execution. However, this presents several problems, including the existence of several places of execution and the fact that it is a manipulable connection on the part of the third party and the debtor. In addition, in the case of real estate, a conflict could appear. This problem could be solved by applying the law of the debtor's domicile at the time of the fraudulent with the third party. However, this law is not really based on a closed connection with either the interests of the parties or the legal relationship68.
66 In the event that there is good faith between the debtor and the third party, it is understood that the law that governs the contested act should be applied.
67 L. Carballo Piñeiro, “Acción pauliana e integración europea…”, loc. cit., p. 57. 68 Ibid, p. 61-62.
There are also solutions of a distributive nature because more than one applicable law accumulates. For example, we could apply the law of the debtor's domicile to the relevant requirements for the credit and then the law of the third party's domicile at the time of carrying out the act because the movable property would be found there69 (except in the
case of real estate, in which the applicable law will be the lex rei sitae). However, this proposal does not facilitate the exercise of the action nor favour the balance of interests. Another connection that could be a solution would be the law of the centre of the principal interests of the debtor, since it maintains a strong connection and also it is difficult to manipulate (one cannot easily change their centre of interests)70. However, to avoid a
possible conflict, this centre of main interests should be set at the time of the contested act, given that it is the object of the actio pauliana.
This last connection seems to be a good solution to determine the applicable law, because the centre of interests of the debtor is foreseeable and hard to manipulate, hence offering more legal certainty and sound administration of justice, principles that are cornerstones of Rome I and the other Regulations.
This balance of interests could also be achieved by establishing as the applicable law the law of habitual residence in the event that the creditor and the third party have said habitual residence in the same country.
However and, above all, taking into account the Feniks case, it can be argued that the law applicable to the matter is the law that governs: a) the first contract, that is, the one between the creditor and the debtor, or b) the second act or contract made between the debtor and the third. In other words, the actio pauliana could be identified with one of these two legal situations to find the applicable law, thus also achieving coherence between the obligation that is considered the basis of the claim to determine international jurisdiction and the law that governs this obligation.
In this sense, in the Feniks case, as the Court considers that the obligation that has served as the basis for the claim is the one resulting from the first contract, consequently and following this solution, the applicable law should be the law the first contract as well.
69 This is a proposal by Hans Hanisch mentioned in L. Carballo Piñeiro, “Acción pauliana e integración europea…”, loc. cit., p. 65.
Although if this option is followed, one should take a look to article 4 Rome I and consider whether there is any special connection and, if not, assess whether there is any characteristic performance.
We consider, however, that an escape clause should be included in the conflict rule, leaving more room for the Court to consider the existence of a law with closer ties, and if this were the case, that law should be applied.
However, the temporal scope of Rome I applies in cases as of December 17, 2009, taking the date of the contract as a reference. Then, in the previous cases we will attend to the Rome Convention in which the autonomy of the parties is also regulated in the first place. In the absence of an agreement, the law with the closest ties would apply. In relation to this, it establishes a presumption saying that the contract has the closest ties with the country in which the party that must perform the characteristic service has, at the time of the conclusion of the contract, his habitual residence (or in cases of a company, where they have their central administration). However, this presumption can be destroyed with the escape clause, which allows the court to apply another law that it considers has more links. Therefore, the relevance of the applicable law is connected with the issue.
5 CRITICAL ANALYSIS
5.1 Predictability of the forum
The decision then emphasises that the cause of action is what characterises the claim to include it in contractual sphere: if a claim is based on a contract, it is therefore logical to qualify it as a “matter relating to a contract”. It will be irrelevant whether the plaintiff and the defendant are directly connected by a contractual relationship71.
However, the cause of action does not allow foreseeability and predictability for the parties when we consider the actio pauliana as a matter relating to a contract. First off, in the Feniks case the parties did not freely contract. As we know, contract law is based in the fact that the parties enter into a contract when they freely assume the obligations that arise from it. The consequence of this is that the third party can be sued in another jurisdiction when they did not agree to these contractual obligations72, as happened in
Feniks case, where Azteca is sued based on an obligation they did not freely assume. The CJEU, expanding the concept of contractual matter, has tried to give room to the actio pauliana within this matter, but for this to work, the objectives of predictability and legal certainty have to be relaxed. This implies that the sound administration of justice is questioned, because a contractual matter is justified on the basis of a contract that has no connection whatsoever with the defendant. Therefore, it can be considered that the CJEU has not followed the provisions of Recital 16 of the Brussels I bis Regulation.
In this way, it could be argued from the CJEU’s point of view, that the Paulian action is governed by a special jurisdiction, leaving aside the principle that jurisdiction is generally based on the domicile of the defendant.
Recital 15 itself does establish the possibility of departing from this principle as long as the object of the dispute or the autonomy of the parties justify another connecting criterion. However, in the Feniks case there is no agreement between the parties on jurisdiction, so it must be understood that the CJEU justifies it on the basis of the object of the dispute, that is, the obligation.
71 Michiel Poesen. “Once more unto the Breach: the Actio Pauliana is a matter relating to a contract in EU Private International Law”. European Review of Contract Law, volumen 15: Issue, pp. 58-65. Published online 27 March 2019
One of the basic principles of the Brussels I bis Regulation’s jurisdiction regime is predictability of the forum where one can be sued73, as we have already mentioned in
previous sections. The CJEU considers that, in actio pauliana, the contractual breach is the cause of action between creditor-debtor. This would allow the creditor to bring the judicial claim in another court other than the third party’s domicile. But the question is: is that fair for the defendant in an actio pauliana? If foreseeability of the forum is one basic cornerstone of the system of Brussels I bis, it does not seem coherent that the defendant cannot foresee in which State they may be sued.
The fact that there is no criterion conferring jurisdiction on a court other than the court of the defendant's domicile should not prevent the action from being subject to a law other than the lex fori according to its conflict rule. Since the Paulian action seeks to establish that the fraudulent transfers cannot be enforced against the creditor, the latter should sue in the defendant’s domicile courts. Furthermore, the action may be directed against any act to the detriment of the creditors and not only on the basis of a contract. Therefore, the possibility of alternative forums does not consider the costs for effective judicial protection nor the effects on the increase of economic costs in international transactions triggered by their judgement.
In short, if the alternative forum is not foreseeable, it is not compatible with the principle of legal certainty.
5.2 No contract between the parties
The fact that there is no relationship between the creditor and the third party implies that the latter has not freely assumed an obligation in the original contract between the creditor and the debtor. Consequently, a court is being imposed on him from a place in which he has not assumed any obligation or negotiated.
As is well known, the general forum operates independently of the type of process and the subject matter of the dispute. It is true that the general forum may yield to other forums in exclusive or special matters, but that possibility has already been excluded by the Court of Justice in previous cases. The general forum offers a certain and reliable criterion,
which is explained by the fact that it enables the defendant to defend himself more easily. However, an exception to the actor sequitor forum rei74 rule can only be made for justified
reasons, as has been extensively discussed in this paper on the chapter on jurisdiction. Since there is no contract between the third party, Azteca, and the applicant company, Feniks, the extension of the special competence in contractual matters may be highly controversial. The Court of Justice in the Feniks case considers that an action such as the Paulian action, based on the contract between the creditor and the debtor, whose link with the defendant is very weak, falls within the notion of contractual matters. Indeed, "too tenuous and too remote" which would imply that any subsequent legal act of one of the parties to the original contract could always qualify as contractual matter75. Therefore, it
does not seem coherent to establish a special jurisdiction that should be interpreted in principle restrictively76 and then extend it to cover matters that are not included in that
provision.
When we made reference to the negative qualification made by the Court in Reichert II in Chapter 3 of this paper, that the actio pauliana remains in no man’s land, because what is not contractual, is non-contractual, at the same time we can’t conclude that what is not non-contractual is contractual. In our opinion, the fact that the Paulian action is not included within the extra-contractual matters of Article 7 (2) Brussels I bis, does not make Article 7 (1) the basis of jurisdiction in contractual matters automatically. Article 7 (1) is not a superior rule of jurisdiction over the rest, so the conceptual delimitation of contractual matter must also be taken into account.
The Polish national court argues that the case is linked to the contract concluded between Azteca and Coliseum, the ineffectiveness of which is claimed by Feniks77 , but the Court
does not refer to the contract of sale which it is claimed to render ineffective, but to the contract of work between the creditor and the debtor. It is therefore again not justified, because the existence of a contract between the debtor and the defendant is not a sufficient reason to extend that contractual jurisdiction to a claim between the creditor and the
third-74 Latin locution which means that the plaintiff must litigate in the fórum of the defendant, emphasasing the general principle that the defendant’s territorial or personal jurisdiction prevails in the case.
75 Opinion AG Bobek, para. 65. 76 C-189/87, Kalfelis, para. 19. 77 Feniks, para. 22
party beneficiary. First, there is no contractual relationship between the plaintiff and the defendant, and the reason given by the Polish referring court, which is accepted by the Court, is that the plaintiff would have to bring the action for a declaration of ineffectiveness in the various Member States in which the third party, who is the beneficiary of the act to be contested, is domiciled78. The Court bases its judgment on the
principles of legal certainty and predictability and of the proper administration of justice79, but it is doubtful whether that extension has any impact on the proper
administration of justice and whether it furthers the objective of predictability, given that it is justified by a contract which has no connection with the defendant.
5.3 A discerning (and overlooked) view: Advocate General’s opinion in the Feniks case
AG Bobek points out that the relevant question to be answered is which of the two contracts is relevant: the agreement between creditor and debtor (namely, the construction contract between Feniks and Coliseum) or the agreement between debtor and the other party (the purchase contract between Coliseum and Azteca)80. To answer this, Bobek
explores three scenarios: First, the actio pauliana related to the agreement between creditor and debtor; second, agreement between debtor and his third party; and third, whether it is sufficient that the pauliana is within the “orbit of a contract”, without the need to single out one in particular81. The problem is that all these scenarios have serious
objections, which lead to conclude that the actio pauliana does not fall under the exclusive jurisdiction of contractual matters. For this, Bobek explores which other jurisdiction is more appropriate to deal with such claims.
Bobek rightly considers that the defendant in an actio pauliana will not be able to foresee in which jurisdiction can be sued. Instead, Bobek points out that it would be more appropriate, in accordance with the objectives of Brussels I bis Regulation, that the
78 Feniks, para. 23. 79 Feniks, para. 44.
80 Opinion AG Bobek, para. 62 onwards. 81 Opinion AG Bobek, para. 69.
defendant of an actio pauliana should be sued in the courts of his domicile, falling then within the general forum set in article 4 (1) of the Regulation.
Establishing jurisdiction under the general forum of the defendant’s domicile, however, does not come without its difficulties. In a very well-motivated discourse, Bobek states that the actio pauliana is one rare case that relies on the application of the general rule. As the AG puts it: “(…) there is no obvious foundation for the idea that there should always or even often be an alternative to the courts of the defendant’s domicile”82. 5.4 Gaps in the system
The fact remains that the law applicable to actio pauliana is uncertain and there is a gap in the system that should have been covered either Rome I or Rome II. But in which Regulation should this provision be included? Once again, we enter the discussion of consistency between Regulations. Should a hypothetical article specific to an actio pauliana be included in Rome I (contracts), the Courts and prospective plaintiffs should seek for jurisdiction under the special rules for contractual relationships in Brussels I bis, an vice versa.
This is, perhaps, the reason why it has deliberately not been included in these instruments. Resorting to AG Bobek’s metaphor, the actio pauliana has a very chameleonic nature and thus it is not easy to categorise. This is why the CJEU has systematically made negative qualifications of what it was not, until they included it under “matters relating to a contract” in Feniks. Not that this categorisation closed the debate.
The conflict rule should identify the legal system with which the factual situation is most closely connected, irrespective of the jurisdiction designated by Brussels I bis rules, whether this jurisdiction is based on contractual or non-contractual forums or the defendant’s domicile. Additionally, such a rule should give judges enough room to evaluate each case individually and assess whether there has been good faith in the transaction(s) and the parties involved83.
82 Opinion AG Bobek, para. 99, AG Bobek quotes from Göranson, U., ‘Actio pauliana outside bankruptcy and the Brussels Convention’, Sumampouw, M., et al. (eds.), Law and Reality: Essays on National and
International Procedural Law in Honour of Cornelis Carel Albert Voskuil, T.M.C. Asser Instituut, The
Hague, 1992, p. 97.
6 CONCLUSIONS
I. The actio pauliana is configured as a means of protection that has the purpose of protecting the creditor who has seen the satisfaction of his credit right frustrated, in order to safeguard his interests. Thus, through the exercise of said action, the act carried out by the debtor and the third party that causes damage is challenged. II. The work of the authors and the judges has ended up outlining the necessary requirements for the exercise of the action: the eventus damnis and the consilium fraudis. The first (eventus damnis) as an objective element that means the impossibility to satisfy the creditor’s credit; and the second as the subjective element understood as the intention of the debtor to harm the creditor. In this sense, the objectification of the second element is of special importance, so that, currently, a mere awareness of causing harm is required. In addition, its subsidiarity is considered an indispensable requirement of the actio pauliana, which means that before exercising this action, the creditor has tried, by all other possible means, to satisfy his credit, and even so he has not succeeded.
III. In comparative European law, there is a contrast between legislation, such as that in Germany, where the regulation of the bankruptcy of debtors has had a decisive influence on the ineffectiveness of acts detrimental to creditors; and on the other hand, laws such as the French and Spanish ones, in which the Paulian action has been constituted as a typical remedy under civil law to contest acts to the detriment of creditors, requiring them to be fraudulent (Code French Civil).
IV. The existence of different regulations on the same institution at the European level has generated a normative framework that is difficult to unify and has meant that, in cross-border litigation, qualification problems may appear. In European law these problems have arisen when determining, depending on their material scope of application, the competent instruments to settle lawsuits. In the cases in which an actio pauliana has been brought, the Brussels I bis Regulation has had a vocation of application when trying to establish international jurisdiction and, in regards of the applicable law, the discussion has focused on the Rome Regulations (I and II).
V. In answering the questions raised, the Court has repeatedly qualified the actio pauliana negatively. In the Reichert I case, it ruled out that it was an exclusive jurisdiction related to real estate rights in rem and, later, in the Reichert II case, it
