By Dr Robert Lewandowski, attorney at law (radca prawny) at Derra, Meyer & Partners in Warsaw
The Court of Justice of the European Union (C-337/17) will decide on the issues in the matter regarding the so-called “Pauliana action” which derives directly from an insolvency law seeking to prevent debtors from offloading their land or property assets in order to avoid their creditors making claims directly against these physical assets. The question placed before the Court of Justice of the EU is as follows: is a creditor entitled to take legal action before a Polish court against a person with its seat/domicile within the European Union based on the Pauliana action?
The following situation will be subject to the analysis and assessment of the Court of Justice. A Polish entrepreneur whose debtor was running away from his creditors along with hiding/disposing of his assets against the threatened insolvency, sold his land /property located in Poland to a buyer from a European Union member state. As a result of this action, the Polish entrepreneur suffered losses as it lost the possibility to satisfy its claims by attaching and selling this piece of land. In order to declare the sale of this land property null and void the Polish entrepreneur should, in accordance with European law, file a lawsuit of annulment against the buyer before a national court appropriate for the seat/domicile of the buyer, which therefore means abroad. This situation would be rather awkward for the Polish entrepreneur in the event of the national court of another member state applying Polish law to the case and because of the additional costs related to litigating in another member state and other language and administrative barriers. The question which the Court of Justice has to face is whether the Polish entrepreneur could be entitled to take legal action against the buyer in accordance with the provisions of the special jurisdiction of the REGULATION (EU) No 1215/2012. The Polish entrepreneur has decided to take legal action against the EU buyer in the Polish court appropriate to the place of fulfillment of the transfer of land property being sold. Within the proceedings before the Polish court, legal representatives of the plaintiff (here: the Polish entrepreneur) asked the Court of Justice for a preliminary ruling on the question of interpretation of the provisions of Article 7.1.a) of REGULATION (EU) No 1215/2012 with regard to jurisdiction of Polish courts in the case of a Paulina action brought against a person living in another European Union member state. Should the Court of Justice decide in favour of the Polish entrepreneur and grant Polish jurisdiction in this case, than this would mean that creditors could have the right to sue their opponents in their home country.
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