Discourse on the direction of amendment of the creditor’s right to revoke system

In this paper, I propose a general direction on how to design a new creditor's right to revoke in preparation for the Ministry of Justice's future work on the revision of the Civil Code regarding the creditor's right to revoke. The Ministry of Justice's 2014 Draft of the Civil Code Amendment(hereinafter referred to as the “2014 revised draft”) proposed 11 articles (10 in the Civil Act and 1 in the Civil Execution Act) related to creditors' right of revocation, and sought to promote balanced discipline among creditor, debtor, beneficiaries, and other creditors. However, the 2014 revised draft is completely silent on the problem of logical inconsistency that arose from the combination of the theory of relative nullity, Article 407, and the compulsory execution that restores the registered title to the debtor's name after the cancellation of the fraudulent transfer. Therefore, if it is revised as in the 2014 revised draft, it seems impossible to solve the fundamental problems surrounding the existing creditor's right of revocation system. Accordingly, I have proposed the following opinions. First, it is desirable that the creditor's right of revocation be operated as a system to protect the interests of individual creditors who have filed cancellation suits. Regarding the effect of cancellation, it will be necessary to decide whether to abandon the concept of ‘cancellation’ of fraudulent transfer like Germany and France and adopt a legal structure that only restores the possibility of compulsory execution of the object of the fraudulent transfer by the creditor who has filed the cancellation suit, or to modify the meaning of cancellation according to the responsibility theory view in Korean or Japan so that cancellation has the effect of nullity in terms of liability law, and to maintain the concept of ‘cancellation’ of fraudulent transfer. Whichever way we take, I think it would better than the current case law’s ‘relative nullity theory’ system, which is ambiguous from the very concept itself. If the creditor’s right of revocation is operated as a system to protect the interests of individual creditors who have filed cancellation suits, the effect of cancellation will naturally not extend to creditors other than the creditor who has filed the suit, and therefore it is desirable to delete Article 407. However, if the legislative decision is made to operate the creditor's cancellation right system as a system to protect the interests of all creditors, as in the 2014 revision, it is logical to abandon the relative nullity theory and completely change the effect of cancellation to apply to the debtor or other creditors, as in the 2017 Japanese revised Civil Code, or to construct a theory according to the Japanese theory of responsibility, which holds that if a fraudulent act is cancelled, the effect of transferring the liability property becomes null and void, and this occurs universally and applies to all creditors. The method of restoration and enforcement after cancellation of a fraudulent act must be changed. There was no change in this regard in the 2014 revised draft, and I think this is the biggest problem. Most of the problems surrounding the creditor's right of revocation system can be resolved if the creditor files a suit against the beneficiary or successor, obtains a revocation judgment, and then directly enforces the object of the fraudulent act while it is in the possession of the beneficiary or the successor. In academic field in Korea and Japan, there is a prevailing opinion that the method of compulsory enforcement can be changed by revising the Civil Code or the Civil Execution Act or by utilizing the current system without necessarily establishing a new system such as the compulsory execution lawsuit in Germany, and I agree with this.