Slovak legal news: What to do if a debtor disposes of property?

Opposition claim – interpretation of the term “enforceable claim” in the context of current case law in Slovakia or what to do if a debtor disposes of property

 

This article informs about the outcome of the imaginary struggle fought in Slovak courts, which concerns the interpretation of the term “enforceable claim,” contained in the provision of § 42a (1) of the Civil Code. We also explain how to proceed in the case of filing a so-called opposition claim.

 

The controversy over the notion of “enforceable claim” lies in the disagreement as to whether this notion should be interpreted as a claim granted by a final judicial decision (i.e., a claim that can be “recovered” through an executor) or as an actionable claim (one that can be to sue). The question was not internally settled by the Supreme Court of the Slovak Republic, which interpreted it differently depending on which senate decided on it in which case.

 

For example, in the judgment under file no. 5Cdo/188/2010 of 23 November 2010 and in the resolution under file no. 6Cdo/253/2012 of 17 December 2013, the term “enforceable claim” was interpreted as a claim granted by a final judicial decision, while in the resolution under file no. 4Cdo/198/2010 of 27 February 2012 and in the judgment under file no. 2Obdo/69/2012 of 30 October 2013, this term was interpreted as an actionable claim (under case law R 44/2001).

 

The resolution of this fundamental issue in interpreting the term “enforceable claim” was resolved by the Supreme Court of the Slovak Republic in its decision under file no. 6Cdo/237/2017 of 24 June 2020.

 

Senate 6C was probably aware of legal uncertainty in connection with different interpretations of the term “enforceable claim” in Slovak case law and decided to refer the matter to the Grand Chamber of the Civil Law Board of the Supreme Court. However, the Grand Chamber referred the case back to senate 6C without a decision, understanding that it must decide the case itself by choosing one of two conflicting views on the interpretation of the term “enforceable claim.” Thus, surprisingly, the Grand Senate did not unify the decision-making practice of the Supreme Court.

 

Senate 6C followed the instructions of the Grand Chamber and chose the interpretation according to which an enforceable claim is considered to be a claim granted by a final judicial decision.

 

What does this mean in practice?

 

In terms of current practice, many entrepreneurs, but also ordinary citizens, who found themselves in a situation in which they witnessed the behavior of their debtor, which consisted of purposeful so-called “transfer of property” to other, most often close persons, chose the defense of by which the property was transferred by an opposition claim and simultaneous action by the debtor for failure to fulfill obligations.

 

Such a procedure naturally seemed to be the most sensible and practical. Through this procedure, the creditor obtained (ideally) the issuance of a valid decision on the fulfillment of the obligation and the opposition claim at approximately the same time, which enabled him to achieve a relatively early satisfaction of the claim.

 

If the creditor had opted for this procedure on the date of publication of this article, the opposition claim would most likely have been dismissed (at best, the court would stay the proceedings), as he would not yet have a final decision on the action to pay the amount due and the court would probably follow the opinion of senate 6C.

 

How to proceed?

 

A problem associated with the view expressed by senate 6C is the expiry of a three-year time limit for filing an opposition claim, calculated from the date of the enforceable legal act. It is probably no secret that litigation in the Slovak Republic takes some time. Therefore, the three-year period could be in vain during the action for failure to fulfill obligations.

 

For this reason, we believe that the most appropriate procedure in the current situation, established by the decision under file no. 6Cdo/237/2017 of 24 June 2020 will consist in the simultaneous filing of an opposition claim and an action for failure to fulfill obligations, while the opposition claim will include a motion to stay the proceedings. The court should proceed under § 162 (1) (a) of the Civil Procedure Code, i.e., to stay the proceedings even without a petition if the decision depends on a question which he is not entitled to resolve in the proceedings. Still, for procedural certainty, it is appropriate to address the petition in question to the court. The creditor thus avoids the risk of the action being dismissed on the ground that there is no standing to bring an action.

 

Subsequently, it will be necessary to wait for a final decision on the action for failure to fulfill obligations, after which the opposition proceedings will be reopened.

 

As is clear from the proposed procedure, reaching a final decision on the opposition claim will be quite time-consuming if the opinion of the senate 6C is respected on the issue of interpretation of the term enforceable claim.

 

In addition, the process of solving the phenomenon of transferring the debtor’s property is relatively demanding from a legal point of view. Therefore it will probably be appropriate to entrust the solution to this problem to a qualified attorney.

 

Expected future development

 

Although the decision-making practice of courts is dynamically changing and evolving, as evidenced by the inconsistency of opinions on the concept of enforceable claim, we do not assume that the decision-making practice of the Supreme Court of the Slovak Republic will almost again turn to the view that an enforceable claim is an actionable claim.

 

The current decision-making practice of the Supreme Court, as well as civil law doctrine, does not insist on the interpretation of the term “enforceable claim,” which follows from decision R 44/2001 (actionable claim) but deviates fundamentally from this interpretation.

 

In addition to the legal doctrine and the last relevant decisions concerning the given issue, the Czech case law (Rc 12/1998, 27/2000, 35/2002, 64/2002, 12/2003, 30/2009, 18/2014), which concerns the de facto same regulation of opposable legal acts as the Slovak legal system as well as the Constitutional Court of the Slovak Republic (resolution under file no. PL. ÚS 39/2015 of 01 July 2015 or resolution under file no. I. ÚS 172/2020 of 16 April 2020).

 

It is, therefore, reasonable to assume that the procedure we propose in this article will become the norm in cases of solving the problem of “disposal of assets” by debtors.

 

Falath & Partners

Ján Falath

partner, associate
T: +421 905 866 438
E: falath@falathpartners.sk

www.falathpartners.sk

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