What is an actio pauliana under Dutch law?

Dutch term: Actio pauliana | Legal basis: Articles 3:45 BW / 42 Fw

An actio pauliana is the right of a creditor (or a bankruptcy trustee) to avoid legal acts by a debtor that were performed with the knowledge that they would prejudice creditors. Under article 3:45 of the Dutch Civil Code (outside bankruptcy) and article 42 of the Bankruptcy Act (in bankruptcy), transactions such as underpriced asset sales, gratuitous transfers and selective payments can be reversed.

For the action to succeed outside bankruptcy, the creditor must show that the debtor acted voluntarily, that the act prejudiced creditors, and that both the debtor and the counterparty knew or should have known of the prejudice. In bankruptcy, the trustee benefits from statutory presumptions that ease the burden of proof for transactions within one year before the bankruptcy date.

Why it matters for international businesses

For international creditors, the actio pauliana is a powerful recovery tool when a debtor has moved assets to related parties or friendly third parties in anticipation of enforcement.