Legal status of a third party within the meaning of Article 527 of the Civil Code in enforcement procedure based on a judgment in favour of a Paulian (fraudulent conveyance) claim

Abstract

Admissibility of the Paulian (fraudulent conveyance) claim, a civil law institution referred to in Article 527 of the Civil Code3, for the protection of debts governed by public law no longer raises any doubts. The Paulian action gives an opportunity to protect a creditor of public receivables against actions undertaken by a debtor to the detriment of the creditor. The judgment has the effect of an absolute invalidity of the act-in-law of the debtor and the third party with respect to the creditor, hence it makes it possible to proceed with enforcement measures against the third party’s assets on the basis of an instrument permitting enforcement issued against the debtor. The legal status of the third party in an extended administrative enforcement versus the creditor, the obligated party and the enforcement authority has not been defined in any legal provisions on enforcement proceedings in administration. Despite an extensive catalogue of legal remedies, the applicable legal provisions fail to guarantee appropriate instruments for the protection of a third party, who does not formally become a participant of the enforcement proceedings and thus cannot use the legal remedies available to participants despite being compelled to endure enforcement measures directed against its assets as a result of the Paulian judgment.