Author: Michael Sweig*

I.    Introduction

A shareholder loan creditor in British Columbia obtained a Provincial court money judgment against anindividual debtor. The debtor, as company president, had looted the Canadian company and now controls a Mexican company. The debtor claimed in email to the creditor that he has “no assets in his name,” and transferredhis most valuable asset to that Mexican company just before the Canadian creditor sued him and obtained the final judgment. The Mexican transferee paid no consideration. The Canadian creditor brings a Vancouver-seatedinternational commercial arbitration under the parties’ shareholder agreement to enforce the unpaid Provincial judgment via the New York Convention. The shareholder agreement makes “any dispute between the parties” arbitral and designates the law of British Columbia.

The arbitrator must decide what law governs. The question divides into two related inquiries. The firstinquiry asks whether the debtor committed fraudulent conveyance and what he owes the creditor in damages. The second inquiry asks whether the transfer of the Mexican-situs real estate can be unwound and through what legal mechanism.

The first inquiry belongs to British Columbia law. The shareholder agreement so designates. The underlying wrongful conduct occurred substantially in British Columbia. British Columbia’s Fraudulent Conveyance Act and common law principles supply the substantive grammar of the cause of action.[1] 

The second inquiry is harder. A British Columbia court has no power over Mexican title. A British Columbia order declaring the transfer void against creditors carries no weight at the Registro Público de laPropiedad. The Canadian creditor wants the Mexican house. Only Mexican law can deliver the house. Mexico’sArticles 2163 et seq. of the Código Civil Federal (“CCF”) provide the acción pauliana, the civil law descendant of Roman law’s fraus creditorum action. The arbitral award, to deliver real recovery, must carry findings that a parallelMexican proceeding can enforce.

The arbitrator’s authority to apply different bodies of law to different aspects of a single dispute has a name. Civil law conflicts scholarship calls it dépeçage. American conflicts scholarship absorbed the term fromFrench civil law doctrine through Willis Reese’s work.[2] The UNCITRAL Model Law, the institutional rules ofevery major arbitral center, and the lex arbitri of every Model Law jurisdiction direct the tribunal to apply such “rulesof law” (plural, deliberate, unmistakable) as the parties have chosen.[3] The tribunal’s own conflicts analysis fills any gap the parties’ designation leaves.

What remains unsettled, in scholarship and practice, concerns how that arbitral authority operates when adispute crosses the divide between the common law and civil law traditions. The European literature on the conflict-of-laws treatment of pauliana offers the only mature body of academic work on this question.[4] That literature is rigorous within its frame: civil law courts applying civil law remedies under European regulatory choice-of-law instruments. This article extends the analysis beyond that frame to international arbitration, to disputes spanning the common law and civil law traditions, and to the design of arbitral awards for downstream enforcement through both the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and a parallel civil law proceeding in the situs jurisdiction.

This article advances three claims. First, international commercial arbitration provides the natural forum for cross-tradition fraudulent conveyance disputes. The arbitral framework’s “rules of law” formulation, the tribunal’sabsence of a lex fori, and the structural autonomy of the arbitral seat from any single national legal tradition equip the tribunal to resolve such disputes across traditions rather than within one. Second, the arbitral award, properly drafted, bridges common law substantive liability and civil law proprietary recovery. The award carries findingsunder both bodies of law. The New York Convention moves the substantive findings into the situs jurisdiction. Thecivil law proceeding executes the proprietary remedy. Third, Pretelli’s differentiated-element framework, developed for European court litigation, finds its natural extension in the arbitral setting that her work does not reach.

II.   Dépeçage: Civil Law Origins and Modern Articulations

A.   The Civil Law Source

The term dépeçage entered French private international law from the verb dépecer, meaning to carve up or dismember. The practice predates the term in the civil law tradition. Statutist scholars in the Italian schools of thethirteenth and fourteenth centuries assigned different aspects of cross-border disputes to different bodies of law. They distinguished real statutes (governing things, by lex rei sitae), personal statutes (governing persons, by their domicile), and mixed statutes (treating both). The architecture was already differentiated.[5]

The modern civil law articulation appears in mid-twentieth-century French academic conflicts literature. The term “dépeçage” denotes the systematic application of different laws to different juridical questions arising in one dispute. The civil law tradition treats the practice as ordinary. The Rome I European Union Regulation (“Rome I”) expressly authorizes parties to a contract to choose “the law applicable to the whole or to a part only of the contract.”[6] The Hague Conference on Private International Law has codified the same authority in its 2015Principles on Choice of Law in International Commercial Contracts.[7]

B.   The American Doctrinal Reception

American conflicts scholarship encountered dépeçage through Willis Reese’s 1973 Columbia Law Reviewarticle.[8] Reese served as Reporter of the Restatement (Second) of Conflict of Laws. He used the term to describe what American courts had already begun to do under the Restatement (Second)’s issue-by-issue methodology.[9]Sections 145 and 188 of the Restatement (Second) direct courts to apply the law of the state with the “most significant relationship” to the particular issue, not to the case as a whole.[10] Different issues can yield different governing laws.

Scholars divided over the methodology. Russell Weintraub’s 1974 article warned that dépeçage produced internal incoherence.[11] The methodology combines elements of legal systems, which the drafters of those systems never designed to operate together. Christian Wilde, writing in the Southern California Law Review,observed that the methodology forced courts into analytical complexity.[12] Wilde raised the question of how far to split issues. Christopher Stevenson’s 2003 Indiana Law Review article defended the practice.[13] Stevenson argued that the complexity is a feature rather than a bug. The alternative, applying a single law to the entire disputeregardless of fit, produces worse results.

Symeon Symeonides drew a clean distinction between two things that prior scholarship had blurred. Issue-by-issue analysis is the method. A court that decomposes a dispute into discrete issues and analyzes each one separately could end up applying different laws to different issues.[14]

Symeonides’s distinction matters for arbitration. The distinction isolates what tribunals actually do. Issue-by-issue analysis is uncontested doctrine. A tribunal that performs it does the work any careful adjudicator doeswhen a dispute presents multiple distinct legal questions.

Dépeçage emerges only because the answers, applied to the international setting, point in different directions.

C.   The European Pauliana Scholarship

The richest modern scholarly engagement with dépeçage outside the contract setting appears in the European literature on the conflict-of-laws treatment of actio pauliana. Ilaria Pretelli reviews the comparativearchitecture of pauliana across civil law systems and the analogous common law remedies. The author maps the jurisdictional treatment under the Brussels I European Union Regulation (now Brussels Ia) and the EuropeanInsolvency Regulation. She identifies a regulatory gap. None of Rome I, Rome II, or the Insolvency Regulationcontains a specific choice-of-law rule for non-insolvency pauliana.[15] Pretelli then proposes an analytical framework. The framework subjects different elements of the pauliana action to different laws. The law of the protected claim plays the leading role. The law of the fraudulent transfer intervenes where the analysis must protect the legitimate expectations of good-faith third parties.[16]

The European Court of Justice’s 2018 decision in Feniks v. Azteca[17] brought the characterization question into sharp focus. The Court held that an actio pauliana that a creditor brings against a third-party transferee falls within “matters relating to a contract” for purposes of jurisdiction under the Brussels I Regulation.[18] The decision drew controversy. Subsequent scholarship has questioned the contractual characterization.[19]Other commentators have argued that pauliana resists clean fit into any of the standard Brussels Ia categories. The action is neither contract, nor tort, nor right in rem.

III.   International Arbitration and the Statutory Embrace of Dépeçage

A.   The “Rules of Law” Formulation

The text of every leading international arbitration instrument uses a particular phrase to describe what thetribunal must apply. The phrase is “rules of law,” plural, not “law,” singular. The UNCITRAL Model Law’s drafting history documents the conscious selection of “rules of law” over “law.”[20] The drafters selected the plural to authorize tribunals to do three things. First, to apply non-national rules such as the lex mercatoria. Second, to apply multiple national laws to different issues in a single dispute. Third, to apply carved selections within a single national legal system.

Article 28(1) of the Model Law reads: “The arbitral tribunal shall decide the dispute in accordance withsuch rules of law as are chosen by the parties as applicable to the substance of the dispute.”[21] The sameformulation appears in the UNCITRAL Arbitration Rules at Article 35(1), in the ICC Rules at Article 21(1), and in the LCIA Rules at Article 22.3.[22] The London Court of International Arbitration, the International Chamber ofCommerce, and the institutional successors to the Geneva model all converged on this language and the underlying principle. Tribunals may apply more than one body of law.

Article 28(2) directs the tribunal, where the parties have not designated, to apply “the law determined by the conflict of laws rules which it considers applicable.” The tribunal, unlike a national court, has no lex fori. Nostate’s conflicts rules bind the tribunal. The tribunal must reason its way to the applicable substantive rules through whatever conflicts methodology best fits the dispute. The methodology may proceed issue-by-issue. The result may be dépeçage.

B.   Implementation in National Lex Arbitri

National arbitration statutes implementing the Model Law replicate the “rules of law” formulation.

The Hague Principles on Choice of Law in International Commercial Contracts confirm the same postureat a higher level of generality. Article 2(2) provides that “the parties may choose (a) the law applicable to the wholecontract or to only part of it” and “(b) different laws for different parts of the contract.”[23] The Hague Conference is the global institutional source of private international law. Its endorsement of partial choice is structural.

C.   The Treatise Consensus

The leading treatises in international commercial arbitration treat dépeçage as a settled feature of the field. Gary Born devotes Chapter 19 of the third edition of his treatise to choice of substantive law.[24] Born’s treatment proceeds from the premise that tribunals may and do apply multiple bodies of law. The question is not whether they may, but how they should choose. Redfern and Hunter agree. So do Fouchard, Gaillard, and Goldman in the canonical French-school treatment.[25]

D.   The Arbitrator’s Distinctive Position

The arbitrator’s posture differs from a national court in three respects that matter for this analysis.

First, the arbitrator has no lex fori. The tribunal sits at the parties’ designated seat. The seat law governsprocedure alone. Substantive choice of law remains with the tribunal under Article 28(2). A British Columbia-seated tribunal applies British Columbia procedure under the BC International Commercial Arbitration Act and selects its own conflicts methodology.

Second, the arbitrator serves the parties’ designation first, then fills its gaps. The shareholder agreement that establishes the arbitration typically designates a law for contract questions arising under the agreement. The tribunal honors that designation. Article 28(2) authorizes the tribunal to apply its own conflicts analysis to any issue the designation does not reach. The combination is structurally differentiated. Party-chosen law governs the contract elements. Tribunal-determined law governs the rest.

Third, the arbitrator must render an award that will travel. The New York Convention enforces arbitral awards across 172 contracting states.[26] The tribunal must draft the award with attention to downstreamenforcement architecture. Some relief depends on a parallel proceeding in another jurisdiction. The award mustthen carry the findings that proceeding will need.

These three features of the arbitral posture invite dépeçage. They do not merely permit it.

IV.    A Cross-Tradition Application: BC Fraudulent Conveyance and Mexican Acción Pauliana

A.   The Substantive Grammar of British Columbia Fraudulent Conveyance

British Columbia (“BC”) inherits the English statutory and common law remedies against fraudulent conveyances. The Fraudulent Conveyance Act, R.S.B.C. 1996, c. 163, traces directly to 13 Eliz. 1, c. 5 (1571).English Parliament enacted that statute to protect creditors against debtor evasion by transfer. The Act provides at Section 1 that a disposition made to delay, hinder, or defraud creditors of their just and lawful remedies is void and ineffective against the creditor.

The substantive elements under the FCA and the common law are familiar.[27] The plaintiff must establish the debtor disposed of the property, acted with intent to delay, hinder, or defraud creditors, and the disposition prejudices an existing or contingent creditor. The plaintiff may prove intent directly or by inference from badges of fraud. The catalog of badges is well-established[28] including: transfer to a close relation or controlled entity, transfer for inadequate consideration, transfer of the debtor’s most valuable asset, transfer made under threat ofimpending litigation, transfer accompanied by retention of beneficial use, and transfer concealed from creditors.

BC remedies have two dimensions. The first is declaratory. The court may declare the conveyance void against the creditor. The second is monetary. The court may award damages equal to either the value of the assetthe debtor improperly removed from his estate or the diminution in the creditor’s recovery.

An asset in British Columbia makes both remedies effective. The court order voiding the conveyance bindsthe BC Land Title Office and the BC Securities Commission. The asset returns to the debtor’s estate for thecreditor’s execution. The damages remedy becomes largely redundant.

An asset outside British Columbia changes the structure. The British Columbia court can declare the conveyance void against the creditor as a matter of BC law. That declaration binds the parties to the BC proceeding. It does not bind the foreign registry. A BC declaration that title transferred to a Mexican entity is voidcarries no weight at the Registro Público de la Propiedad in Baja California Sur. The damages remedy becomes theoperative monetary relief. The asset itself stays where it sits.

B.   The Substantive Grammar of Mexican Acción Pauliana

Mexican law provides a remedy that operates directly on the asset. Articles 2163 through 2179 of theCódigo Civil Federal codify the acción pauliana.[29] The action traces, like its civil law counterparts elsewhere, to the Roman law action against fraudulent transfers.[30]

CCF Article 2163 sets out the elements. The plaintiff must establish an act of the debtor that produces or aggravates his insolvency, an antecedent debt and prejudice to the creditor. For onerous transactions, the plaintiff must establish knowledge of the prejudice on the part of both the debtor and the third party. Gratuitous transactions require no proof of the third party’s knowledge.[31]

The proprietary effect is direct. CCF Article 2168 provides that the property reverts to the debtor’s patrimony upon revocation, available for the creditor’s execution.[32] The action operates on the proprietary statusof the transfer. The action does not operate on the personal liability of the debtor. The action produces a Mexican judgment that the Registro Público de la Propiedad recognizes.

C.   The Natural Division of Labor

The natural division of labor between these two bodies of law follows from their respective competencies.British Columbia law tells us whether the debtor committed fraudulent conveyance, whether he is liable, and whathe owes in damages. The shareholder agreement designates British Columbia law for contract questions. The wrongful conduct occurred in British Columbia. The cause of action is unambiguously British Columbian.

Mexican law provides how the proprietary effect of the transfer can come undone. The asset sits inMexico. The Registro Público de la Propiedad responds to Mexican judgments. The Mexican acción pauliana operates on title. The action produces the result the creditor needs. That result is the restoration of the asset to the debtor’s patrimony for execution.

This architecture is not dépeçage in the contested sense of dismemberment of a cause of action. The cause of action stays whole under British Columbia law. Mexican law enters only at the remedy stage. Mexican law enters only because lex situs governs the proprietary effect of transfers of immovable property in every developedconflict-of-laws system. The geography of the asset forces the carve. An analytical preference of the tribunal does not.

That distinction matters. A respondent who argues that the tribunal cannot apply dépeçage because fraudulent conveyance is a unitary cause of action under BC law makes a correct observation about the cause ofaction and an irrelevant observation about the remedy. The tribunal does not split the cause of action. The tribunalapplies the law of the situs to the proprietary effect of the transfer. Every conflicts system does the same.

V.   Pleading Design: Engineering the Contractual Breach

The practical bridge between common law substantive liability and civil law proprietary enforcement cannot be built post-award.[33] The bridge must be engineered into the initial architecture of the claimant’s pleadings. When faced with an egregious asset diversion, international litigators reflexively reach for statutory or common law fraudulent conveyance claims, such as those arising under the Uniform Voidable Transactions Act orits common law antecedents. In international commercial arbitration, this instinct is a structural error. Pleading fraudulent conveyance as an independent, standalone tort or equitable claim invites immediate jurisdictional challenges from the respondent, who will argue that the asset transfer falls outside the scope of the underlying contract’s arbitration clause. Furthermore, it risks a hostile reception by the lex situs judiciary at the enforcement stage, which may view an arbitral tribunal’s overt adjudication of local property titles as an ultra vires infringement on sovereign real estate registries.

To bypass these jurisdictional and enforcement traps, counsel must execute a precise conceptual pivot: theasset diversion must be contractualized. Rather than pleading the transfer as an independent tortious wrong, the claimant must frame the asset dissipation as the literal mechanism and performance of a fundamental breach of contract under the law of the seat.

A.   The Jurisdictional Anchor under the Law of the Seat

Where the contract designates a dominant common law jurisprudence, such as New York or English law, as the law of the seat, the legal framework provides robust mechanisms to absorb asset diversion into the law of contract performance. Counsel should anchor the claim in two distinct contractual theories: the breach of express operational covenants and the breach of the implied covenant of good faith and fair dealing.

First, commercial contracts, shareholder agreements, and joint venture pacts routinely contain expresscovenants governing asset maintenance, non-encumbrance, or the preservation of corporate solvency. When a debtor transfers its principal asset to an alter-ego entity to evade an impending arbitral liability, that transfer constitutes an operational breach of those specific provisions.

Second, even in the absence of an explicit anti-stripping clause, the law of the seat uniformly recognizes that every contract imposes an implied obligation of good faith and fair dealing in its performance. Under New York law, for example, the implied covenant is breached when a party acts in a manner that directly destroys orinjures the right of the other party to receive the fruits of the contract.[34] A debtor who deliberately depletes its treasury or strips its tangible property to render itself judgment-proof is not merely engaging in judgment evasion. The debtor is actively frustrating the fundamental object of the contract. The asset diversion is thus anchored securely within the four corners of the arbitration agreement, rendering the respondent’s jurisdictional objections entirely untenable.[35]

B.   Engineering the Prayer for Relief: The Prepackaged Award

Once the asset diversion is properly characterized as a contractual breach, the claimant must carefully engineer the prayer for relief. An arbitral tribunal lacks the in rem authority to directly void a real property deed registered in a foreign civil law jurisdiction. A prayer for relief that requests the tribunal to cancel a Mexicanproperty transfer or order the modification of a local public registry is dead on arrival.

The pleading must therefore request remedies that sit squarely within the tribunal’s in personam authority: a formal declaration of contractual breach and a subsequent award of monetary damages. The quantum of damages for this specific breach should be quantified precisely by the value of the dissipated asset, establishing a directcausal link between the contract violation and the economic loss.

Crucially, the Statement of Claim must explicitly petition the tribunal to make detailed, itemized findings of fact within the dispositive portion of the award. The claimant should request specific findings on three points. First, the debtor’s actual intent to hinder, delay, or defraud its contractual counterparty. Second, the debtor’s resulting insolvency at the time of, or immediately following, the transfer. Third, the debtor’s continuous, dominantcontrol over the transferee entity as a mere alter-ego or sham conduit.

C.   Prepackaging for New York Convention Enforcement

This precise pleading design serves a vital downstream purpose. By demanding these specific factual determinations from the inception of the merits phase, counsel effectively forces the tribunal to prepackage the final award for friction-free enforcement under the New York Convention.

When the final award is presented to the civil law court at the asset’s situs, the claimant is not asking the local judge to recognize a foreign property ruling. Instead, the claimant presents a clean, unassailable New York Convention debt represented by a monetary award, paired with a binding set of factual findings. These findings carry the absolute force of cosa juzgada (res judicata) because they are embedded in the final arbitral award.

When the creditor subsequently invokes the local civil law remedy, such as the Mexican acción pauliana, the local enforcement judge is not required to conduct a de novo trial on the “badges of fraud” or the debtor’s insolvency. Those elements have already been conclusively adjudicated by the contractually chosen tribunal. The civil law court’s sole remaining function is to apply its domestic proprietary mechanics to execute upon the assetbased on the binding findings of the award. By designing the pleading to treat fraud as a breach, counsel transforms a volatile civil law title dispute into a streamlined exercise in international debt enforcement.

VI.   The Award as Cross-Convention Bridge

A.   The Drafting Imperative

An arbitral award that resolves the cross-tradition fraudulent conveyance dispute must carry, on its face, parallel findings under both bodies of law. The award is not merely a determination of liability. The award is the instrument through which the substantive findings travel into the situs jurisdiction for execution.

The drafting imperative has three components.

First, the award must make explicit findings on the British Columbia substantive cause of action. Thefindings should track the FCA elements. The findings should identify the disposition, the intent (with the badges offraud identified), and the prejudice to the creditor. The award should quantify damages. The British Columbialiability finding establishes the personal obligation of the debtor and the quantum recoverable.

Second, the award must make explicit findings on the Mexican acción pauliana elements. The findings should track CCF Article 2163. The findings should identify the act producing or aggravating insolvency, the antecedent debt, the prejudice, and either the consideration analysis or the gratuitous-transaction analysis. Thefindings should identify the asset, the structure through which the debtor held it, and the prejudice the transfer caused.

Third, the award should expressly anticipate the parallel Mexican proceeding. The award should state that the proprietary remedy in Mexico proceeds through the acción pauliana under CCF Articles 2163 through 2179. The award should invite the Mexican court to treat the arbitral findings on the elements of the action as preclusive.

The architecture fails when counsel drafts the proposed award without attention to the parallel proceeding. A tribunal that issues a BC-law-only award awarding damages without the corresponding acción pauliana findings leaves the proprietary remedy unenforceable in Mexico. The award is good in Canada. The asset stays in Mexico. The creditor has won and lost simultaneously.

Counsel for the claimant must anticipate this failure mode. Counsel must anticipate it in the request for relief, the choice-of-law submissions, and the post-hearing briefs. Counsel must invite the tribunal, expressly, to make the findings the Mexican proceeding will need. The award must say the words.

B.   The Parallel Mexican Proceeding

The acción pauliana proceeding in Mexico operates as the proprietary enforcement mechanism. The plaintiff is the creditor whose recognition of the foreign award establishes the protected claim. The defendants arethe debtor and the third-party transferee. The proceeding treats the recognized arbitral findings as preclusive under Mexican principles of cosa juzgada.[36] The remaining work is the execution of the proprietary remedy. TheRegistro Público de la Propiedad receives the Mexican judgment voiding the transfer. The title returns to the debtor’s patrimony. The creditor executes.

The architecture is elegant when it works. The arbitral tribunal performs the substantive adjudication. The New York Convention moves the award. The Mexican civil law remedy executes on the property. Each instrument does what it does best.

VII.   Limits, Objections, and Replies

A.   The Unitary Cause of Action Objection

The first objection from the respondent will frame fraudulent conveyance as a unitary cause of action underBC law that no tribunal can carve between BC and Mexican substantive rules. The objection misunderstands what the tribunal is doing. The cause of action remains unitary under BC law. The tribunal applies BC law to determine whether the debtor committed fraudulent conveyance and what damages flow. Mexican law enters only at theproprietary remedy stage. Lex situs has governed the proprietary effect of transfers of immovable property since the Statutist scholars in fourteenth-century Bologna.[37] The carve is not analytical. The carve is geographic.

B.   The Forum Shopping Objection

The second objection frames the claimant as having chosen Mexican law to obtain a remedy unavailable under BC law. The objection misunderstands the architecture. The claimant has not chosen Mexican law. Theasset’s location has chosen Mexican law. The claimant chose to sue a debtor whose principal asset sits in BajaCalifornia Sur. The proprietary remedy that operates on that property is the Mexican one. No other law haseffective operation on a Mexican title. The choice arose when the debtor acquired the asset in Mexico, not when the cause of action accrued.

C.   The Arbitrator’s Authority Objection

The third objection frames the arbitrator as lacking authority to direct a Mexican court to treat certainfindings as preclusive. The objection is partially correct and operationally irrelevant. The arbitrator cannot bind a Mexican court. The arbitrator can, however, make findings that a Mexican court will likely credit under the recognition framework of the New York Convention and the Código de Comercio’s implementation. Whether the Mexican court ultimately treats the findings as preclusive remains a question for the Mexican court. Thearbitrator’s job is to give the Mexican court what it needs to make that determination favorably.

D.   The Confidentiality Objection

The fourth objection frames arbitration awards as typically confidential and concludes that a confidential award cannot reach a Mexican court for recognition. The objection has practical force and a practical answer. Theclaimant who anticipates parallel enforcement will negotiate the confidentiality provisions of the arbitration agreement and the seat institution’s rules to permit disclosure of the award for enforcement purposes. The Vancouver International Arbitration Centre’s rules expressly contemplate use of the award for enforcement.[38]The New York Convention itself contemplates disclosure of awards to courts asked to enforce them.

VIII.    Conclusion

International commercial arbitration provides the natural forum for cross-tradition fraudulent conveyancedisputes. The arbitral framework’s “rules of law” formulation, the tribunal’s absence of a lex fori, and the structuralautonomy of the arbitral seat from any single national legal tradition equip the arbitral tribunal to handle thesubstantive analysis across traditions rather than within one. Pretelli’s differentiated-element framework, developed for civil law court litigation under European regulatory instruments, finds its natural extension in this setting. The arbitral tribunal accomplishes as a matter of routine, under Article 28 of the Model Law, what Pretelli could not produce within the EU regulatory context. That accomplishment is a clean choice-of-law architecture for cross-tradition pauliana.

The arbitral award is the instrument that bridges. The award, drafted with the parallel civil law proceeding in mind, carries both the common law liability findings and the civil law proprietary findings. The New York Convention moves the substantive findings into the situs jurisdiction. The local civil law remedy executes on the proprietary recovery. Each instrument does the work for which its drafters designed it.

The implications for choice-of-law clauses in international shareholder agreements are direct. A clause that designates the law of the seat for contract questions suffices to govern the substantive cause of action. The clauseshould not attempt to designate the law of the foreign asset’s situs. Party autonomy cannot displace lex situs in any developed legal system. The clause should anticipate that the law of the situs will execute any proprietary remedy. The clause should anticipate that the arbitral award will need to carry the corresponding findings.

The perceived gap in international asset recovery is not a failure of the New York Convention, but a failure of pleading design. Because commercial arbitral awards are indexed strictly by contractual claims rather than enforcement outcomes, practitioners routinely overlook the tribunal’s power to make binding factual determinations regarding asset dissipation. By framing asset diversion not as an ancillary tort, but as a core breachof contractual performance or good faith, counsel transforms a complex civil law property dispute into anunassailable New York Convention debt. The bridge exists. Cross-border litigators simply need to engineer theirclaims to walk across it.

What the scholarly community needs next is a more developed engagement with the institutional rules and procedural conventions that determine how readily parallel enforcement proceedings receive arbitral findings. The European literature on pauliana ends at the choice-of-law question. The arbitration literature on awards ends at the moment of issuance. The work between, namely the design of the award for downstream execution in a parallelcivil law remedy, remains substantially unwritten. This article is an opening.

* Michael Sweig is a U.S. – trained business lawyer (JD, LL.M, summa cum laude) and former business law professor licensed to practice law in Mexico. He is a permanent legal resident of Mexico and Uruguay. His practice focus is cross-border transactions, international tax, trade finance, and international arbitrations. He practices from Montevideo, Uruguay and with Prof. Lic. Manuel Prieto Arellano, in Cuernavaca, Mexico.

[1] Fraudulent Conveyance Act, R.S.B.C. 1996, c. 163 (Can. B.C.). The Act traces directly to 13 Eliz. 1, c. 5 (1571), which English Parliament enacted to protect creditors against debtor evasion by transfer.

[2] Willis L.M. Reese, Dépeçage: A Common Phenomenon in Choice of Law, 73 COLUM. L. REV. 58 (1973).

[3] UNCITRAL Model Law on International Commercial Arbitration art. 28, U.N. Doc. A/40/17, Annex I (1985, as amended 2006).

[4] Ilaria Pretelli, Cross-Border Credit Protection Against Fraudulent Transfers of Assets: Actio Pauliana in the Conflict of Laws, 13 Y.B. PRIV. INT’L L. 589 (2011).

[5] See generally Friedrich K. Juenger, CHOICE OF LAW AND MULTISTATE JUSTICE (spec. ed. 2005); Hessel E. Yntema, The Historic Bases ofPrivate International Law, 2 AM. J. COMP. L. 297 (1953); Friedrich K. Juenger, A Page of History, 35 MERCER L. REV. 419 (1984) (tracing the Italian Statutist origins of choice of law).

[6] Council Regulation 593/2008, of June 17, 2008, on the Law Applicable to Contractual Obligations (Rome I), art. 3(1), 2008 O.J. (L 177) 6.

[7] Hague Conf. on Priv. Int’l Law, Principles on Choice of Law in International Commercial Contracts art. 2(2) (2015).

[8] Reese, supra note 2.

[9] See, e.g., Auten v. Auten, 308 N.Y. 155, 124 N.E.2d 99 (1954) (applying “center of gravity” analysis to a contract dispute); Babcock v.Jackson, 12 N.Y.2d 473, 191 N.E.2d 279 (1963) (applying interest analysis to a tort dispute and rejecting wholesale lex loci delicti).

[10] RESTATEMENT (SECOND) OF CONFLICT OF LAWS §§ 145, 188 (Am. L. Inst. 1971).

[11] Russell J. Weintraub, Beyond Dépeçage: A “New Rule” Approach to Choice of Law in Consumer Credit Transactions and a Critique of theTerritorial Application of the Uniform Consumer Credit Code, 25 CASE W. RES. L. REV. 16 (1974) (critiquing the methodology as productive of internal incoherence).

[12] Christian L. Wilde, Dépeçage in the Choice of Tort Law, 41 S. CAL. L. REV. 329 (1968) (raising concerns about analytical complexity in tort conflicts).

[13] Christopher G. Stevenson, Dépeçage: Embracing Complexity to Solve Choice-of-Law Issues, 37 IND. L. REV. 303 (2003).

[14] Symeon C. Symeonides, Issue-by-Issue Analysis and Dépeçage in Choice of Law: Cause and Effect, 45 U. Tol. L. Rev. 751 (2014).

[15] Pretelli, supra note 4, at 615 et seq. (mapping the regulatory gap in Rome I, Rome II, and the Insolvency Regulation).

[16] Pretelli, supra note 4, at 633–34 (arguing that the regulatory gap can only be filled at the supranational level).

[17] Case C-337/17, Feniks sp. z o.o. v. Azteca Products & Services SL, ECLI:EU:C:2018:805 (Oct. 4, 2018).

[18] Feniks, ECLI:EU:C:2018:805.

[19] Michiel Poesen, Once More Unto the Breach: The Actio Pauliana Is a Matter Relating to a Contract in EU Private International Law, 15 EUR. REV. CONT. L. 58 (2019).

[20] See U.N. Comm’n on Int’l Trade Law, Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration, U.N. Doc. A/CN.9/264, paras. 4–11 (Mar. 25, 1985) (explaining the deliberate choice of “rules of law” to permit application of more than one national law and of non-national rules).

[21] UNCITRAL Model Law, supra note 3, art. 28(1).

[22] UNCITRAL Arbitration Rules art. 35(1) (2013); ICC Rules of Arbitration art. 21(1) (2021); LCIA Arbitration Rules art. 22.3 (2020).

[23] Hague Principles, supra note 7, art. 2(2).

[24] Gary B. Born, INTERNATIONAL COMMERCIAL ARBITRATION ch. 19 (3d ed. 2021).

[25] Nigel Blackaby, Constantine Partasides, Alan Redfern & Martin Hunter, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION ch. 3 (7thed. 2023); FOUCHARD GAILLARD GOLDMAN ON  INTERNATIONAL COMMERCIAL ARBITRATION ¶¶ 1538–1612 (Emmanuel Gaillard & John Savage eds., 1999).

[26] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 330 U.N.T.S. 38 (enteredinto force June 7, 1959). The Convention now has 172 contracting states.

[27] See Abakhan & Assocs. Inc. v. Braydon Invs. Ltd., 2009 BCCA 521, paras. 65–82 (Can. B.C.) (analyzing the badges of fraud under the FCA).

[28] Twyne’s Case, 76 Eng. Rep. 809 (Star Chamber 1601) (establishing the badges of fraud doctrine in the early common law).

[29] CÓDIGO CIVIL FEDERAL, arts. 2163–2179, DIARIO OFICIAL DE LA FEDERACIÓN [D.O.F.], 26-5-1928 (Mex.).

[30] See DIG. 42.8 (the praetorian actio Pauliana on fraudulent transfers); Reinhard Zimmermann, THE LAW OF OBLIGATIONS: ROMANFOUNDATIONS OF THE CIVILIAN TRADITION (1990) (treating the Roman antecedents of the modern pauliana in the civil law tradition).

[31] CCF arts. 2164–2165 (distinguishing onerous from gratuitous transactions).

[32] CCF art. 2168 (mandating return of the property by the bad-faith acquirer upon revocation of the fraudulent act).

[33] See Kate Joohyun Lee, Note, Piercing the Double Veil: Enforcing Arbitral Awards Against Nonsignatories in Court, 29 AM. REV. INT’L ARB. 505 (2018) (proposing that courts pierce the corporate veil at the post-award enforcement stage to reach alter-ego transferees structured to defeat the award); Marc J. Goldstein, Deciphering De Gusa: The Enforcement in U.S. Courts of International Arbitration Awards Against Alter Egos ofthe Award-Debtor, 29 AM. REV. INT’L ARB. 475 (2018) (analyzing U.S. judicial enforcement of arbitral awards against alter egos of the award-debtor).

[34] Kirke La Shelle Co. v. Armstrong Co., 263 N.Y. 79, 87 (1933) (establishing the canonical New York formulation of the implied covenant of good faith and fair dealing); Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389 (1995) (reaffirming the Kirke La Shelle formulation as the modernNew York standard); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 153 (2002) (applying the doctrine to bar conduct frustrating the counterparty’s contractual expectations); RESTATEMENT (SECOND) OF CONTRACTS § 205 (Am. L. Inst. 1981) (codifying the duty of good faith and fair dealing in performance and enforcement of every contract).

[35] See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983) (establishing the federal policy that doubts about the scope of arbitrable issues are resolved in favor of arbitration); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)(extending the federal policy favoring arbitration to international commercial disputes).

[36] CÓDIGO FEDERAL DE PROCEDIMIENTOS CIVILES arts. 354 et seq. (Mex.) (governing cosa juzgada and related preclusive effects).

[37] Juenger, supra note 5.

[38] Vancouver Int’l Arb. Ctr., International Commercial Arbitration Rules of Procedure (eff. July 1, 2022) (providing that an arbitral award shallnot be made public except where disclosure is necessary for purposes of challenge, implementation, or enforcement of the award).