Fraudulent transfer in Cyprus: when a creditor cannot undo it

In short

A company moved four properties to a relative a year before judgment. The Court of Appeal let the transfer stand: when it was made, the claim was for shares, not a debt.

Klitos Platis, advocate

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A man sued a family property company, and his brother and nephew with it, in November 2011. Three and a half years later, in April 2015, the company transferred four of its properties to his brother. Less than a year after that, in March 2016, he obtained a consent judgment against the company for €1,134,690 plus interest and costs.

He then asked the court to set the transfers aside as fraudulent, so the properties could be seized and sold to pay his judgment. The District Court of Nicosia refused on 24 February 2020. On 30 October 2026 the Court of Appeal dismissed his appeal in Kasapis v. Akinita L.A.K. Ltd, with €7,400 in costs plus VAT against him.

Why the transfer survived

When the properties moved, he was not yet a creditor the company had in mind. The court looks at the debtor’s intention on the day of the transfer, and at who its creditors were on that day.

Until October 2015 his action claimed a share in the company’s capital, not the return of a loan. The claim for the money was pleaded for the first time by an amendment that month, six months after the transfer. The trial court held that, at the time of the transfer, he was not a creditor of the company within Cap. 62, and the Court of Appeal found that conclusion reasonable.

A judgment obtained later does not reach back and make the claimant a creditor on the day the property moved.

What the law requires

Section 3(1) of Cap. 62 strikes down a transfer made with intent to hinder or delay creditors. Such a transfer is void against those creditors, and the property can be seized and sold to satisfy a judgment debt of the person who made it.

Section 4 lets a judgment creditor apply for the order in the action in which the debt was established, whether the transfer came before or after the action began. Two further rules shape most of these cases. Section 3(2) puts the burden of proving good faith on the transferor and the recipient, where the transfer went to a parent, spouse, child, brother or sister without money, property of equivalent value or good consideration. Section 3(3) protects a sale for money or property of equivalent value, unless the buyer knew of the intent to delay or defraud creditors.

The Court of Appeal relied on the long line of authority from Lymperopoulou v. Christodoulou (1957). A transfer can be set aside only at the instance of a creditor whom the debtor, at the time, intended to hinder or delay. Who counts as a creditor is a question of fact, judged at the date of the transfer. The court also repeated, from earlier case law, that a creditor whose debt is not yet payable can still qualify, depending on the facts.

A genuine debt paid in property

The company proved the properties went in payment of a real debt. The trial court accepted that the transfer was a genuine sale in good faith.

The brother had lent the company money, and the debt stood in the company’s accounts as money used to buy and develop property. The agreed price of the four properties was deducted from that debt. The court also noted that the company had made the same offer to the claimant. Neither the claimant nor his accountant and valuer persuaded the trial judge, while the director, the brother and their valuer did. The Court of Appeal would not disturb those findings on credibility.

The claimant pointed to accounts for 2010 and 2011 that were never produced, and to later accounts prepared only in 2019. The trial court heard the director’s explanation and accepted it. On appeal that was a matter of assessment, and it stood.

What this means in practice

For a claimant, how the claim is pleaded decides what Cap. 62 can later reach. The claimant here lent money to a company and then sued, at first, for shares. Anyone who may end up with a money judgment against a company or a person should consider three steps from the outset:

plead the money claim at once, in the alternative if the main claim is for something else;
write to the debtor demanding the sum, so the debt is known and dated;
watch the Land Registry for transfers out, and act quickly when one appears.

An interim order to freeze assets is the stronger protection, but it has to be won. Here such an application, made with the action, was dismissed after a hearing. A Cap. 62 application comes only after judgment, and by then the properties may have passed to a buyer that section 3(3) protects.

For a director of a family company, a transfer to a relative is not void merely because the relative is family. What carried this case was evidence: a loan shown in the accounts, a price set off against it, and witnesses the judge believed. A company that cannot show those things carries the burden under section 3(2), and is likely to lose the property back to the creditor.

Our litigation team acts for creditors and for companies on both sides of these applications, and our page on enforcing a judgment in Cyprus explains what comes after the judgment.

Cap. 62 protects the creditor the debtor meant to escape, so the creditor has to be visible as one on the day the property moves.

Questions we are asked

Can a creditor in Cyprus set aside a debtor’s transfer of property to a relative?

Yes, if the transfer was made to hinder or delay creditors, under section 3 of the Fraudulent Transfers (Avoidance) Law, Cap. 62. The application is made by a creditor who already holds a judgment, in the same action. But the creditor must have been one of the creditors the debtor meant to hinder at the time of the transfer. In Kasapis v. Akinita L.A.K. Ltd (30 October 2026) the claimant failed because, when the properties were transferred, his pleaded claim was for shares in the company and not for the money he later recovered.

Does it matter that the transfer went to a family member?

It matters to the burden of proof. Where property goes to a parent, spouse, child, brother or sister without money, property of equivalent value or good consideration, section 3(2) of Cap. 62 puts the burden of proving good faith on the transferor and the relative. In Kasapis the court accepted that the company and the director’s father had discharged that burden: the properties went in payment of a loan recorded in the company’s accounts, and the agreed price was deducted from it.

What should a claimant do to protect a future judgment?

Plead the money claim from the start, at least in the alternative, so the debtor knows it owes it. A claim framed only as a dispute over shares may leave the claimant outside Cap. 62 for anything the debtor transfers before the pleadings change.

Sources

Klitos Platis

Advocate, Partner

Kleanthous & Platis LLC, Cyprus
Published 12 November 2026

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