Law Applicable to Actio Pauliana before Polish Supreme Court Judgment of the Supreme Court – Civil Chamber of 29 November 2012, Docket No. II CSK 96/12


The dispute arose from a settlement agreement concluded before the German court on 18 November 2008, between the German national Richard L. (claimant) and Polish national Katarzyna D. (defendant), both domiciled in Germany. The defendant agreed she would transfer to the claimant her immovable property situated in Poland in exchange for €40,000. The settlement agreement had been declared enforceable in Poland yet the defendant did not perform her obligation and instead, she concluded a deed of gift with her father, Henryk D. domiciled in Poland (third-party defendant), concerning the same real property. Consequently, the claimant sought to declare the deed of gift ineffective in respect to him pursuant to Article 527 of the Polish Civil Code which establishes the basis for actio pauliana. Being unsuccessful in lower courts, claimant filed a cassation appeal with the Supreme Court.


Before going into the merits of the claim, the Supreme Court confirmed the jurisdiction of the Polish courts on the basis of domicile of one of the defendants by virtue of Articles 2(1) and 6(1) of the Council Regulation (EC) No 44/2001 (Brussels I Regulation). The location of the real property was not relevant, as holding of the European Court of Justice in the case C-115/88 (Reichert v. Dresdner Bank) made it clear that actio pauliana is subject to general rules on jurisdiction.

Secondly, the Court had to determine which law should be applied to the claimant’s action. It noted that, unlike in the German legal system, Polish law did not provide for an explicit conflicts rule concerning the law applicable to the actio pauliana. The purpose of such a claim is to make possible for the creditor to satisfy himself from the alienated piece of the debtor’s property.  German Law on Challenging the Debtor’s Legal Acts Undertaken outside the Insolvency Proceedings (Gesetz über die Anfechtung von Rechtshandlungen eines Schuldners ausserhalb des Insolvenzverfahrens) stipulates in Section 19 that the claim, which aims at making such acts ineffective, shall be subject to the law governing the effect (consequence) of the challenged act. The only existing provisions in Polish law relating to this issue are Article 465(3) of the Law on Bankruptcy and Reorganization and Article 4(2) of the Council Regulation No. 1346/2000 On Insolvency Proceedings which, however, do not apply in this case.

The Court had to derive the specific legal rule from the more general provisions of the Polish Private International Law Act.

Finally, the Court had to derive the specific legal rule from the more general provisions of the Polish Private International Law Act. It pointed out the key characteristics of actio pauliana, which aims at limiting, vis-à-vis the creditor, the effects of a transaction made between the debtor and a third party for the benefit of the latter and thus putting the creditor in the position as if the transaction never took place. Hence, it is necessary to determine whether such benefit was at all transferred. If this was established, it would further be necessary to ascertain in what circumstances the transaction was concluded and whether it impaired the creditor’s ability to recover his due.


All that being taken into account, the Court found that the law applicable to the challenge should be the law governing the effect of the assignment of benefit. Such a solution serves the interests of both parties to the dispute, i.e. the creditor and the third party which benefited pursuant to the transaction with the debtor. The creditor who challenges effectiveness of the debtor’s act, because of the benefit it brought to a third party in accordance with the relevant law, should be also entitled to limit this effect on the basis thereof. Similarly, protection of the third party’s expectations concerning the legal act under which it acquired the benefit requires that any possibility of limiting this benefit be subject to the law governing its emergence. The reasoning complies with the solutions adopted in German law, as well as in the Law on Bankruptcy and Reorganization and the Council Regulation On Insolvency Proceedings.

The Court further stressed out that law applicable to actio pauliana governs issues such as: possibility to limit, vis-à-vis the creditor, rights of the third person to the object of the benefit acquired from the debtor; scope of creditor’s powers and rights; character of debtor’s duties and moment of their emergence; insolvency of the debtor; awareness as to the detrimental behavior; condition that the creditor must be entitled to a identified protected claim. The existence of the claim itself within a certain relationship is, however, subject to the law applicable to the relationship between the creditor and the debtor. It is usually the law applicable to a given contract concluded by those two parties.


Least but not last, the Supreme Court also paid its attention to the issue of entering into force of the Rome Convention on the Law Applicable to Contractual Obligations (Official Journal of the Republic of Poland 2008 No. 10, issue 57). It was found that this Convention applies in Poland to contracts concluded between 6 February 2008 (i.e. the day of its formal promulgation) and 16 December 2009 (i.e. the day before entering into application of the Rome I Regulation). Under the Convention, the settlement agreement between the parties was subject to Polish law as the most closely connected. According to the Court, the Convention deals only with contractual obligations but does not govern the transfer of ownership in the land. The latter issue is, pursuant to Private International Law Act, subject to the law applicable to the immovable property which is the law of the place where the property is situated (lex rei sitae) – in the present case it was Polish law as well.

By the same token, the Supreme Court dismissed the creditor’s cassation appeal. The settlement agreement did not transfer the title in land to the creditor and, consequently, that he did not prove his entitlement to identified receivables which could be protected by actio pauliana.

Posted on by Michał König in International

About the author

Michał König
Michał König

Michał König, LL.M. - graduate of the Faculty of Law and Administration of the University of Warsaw and the New York University School of Law (a specialized LL.M. in International Business Regulation, Litigation and Arbitration). Advocate trainee at the District Chamber of Advocates in Warsaw.