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NEWSLETTER 2011
230
The invalidity of the simulated transaction may have heavy
consequences for the parties which may be summarized as follows:
• The simulated agreement becomes invalid or void from themoment
it is made without any legal effect and consequently unenforceable
together with all accessory rights and duties attached to it;
• The party who was harmed by the damage caused of the simulated
agreement cannot claim to recoup its losses. Because, the harmed
party is the one who assent to the simulated agreement with its
free will without any duress;
• In a simulated agreement, the existence of simulation can be alleged
by any third persons or be investigated and taken into consideration
by the judge
ex officio
with the exception of the parties;
• There is no statute of limitation to allege the existence of a
simulation. As a matter of fact, the simulation may be alleged or
investigated by the judge
ex officio
at any time;
• The enforcement of obligations and duties cannot be claimed in
case of simulation because of the absence of a valid agreement
between the parties. Furthermore, for obligations that have already
been executed, restitution may be asked based on the principles of
unjust enrichment (Art. 61 et seq. TCOO);
• In principle, a person who has acquired a property / right on the
basis of a simulated agreement cannot transfer this property / right
to third persons. Otherwise, the said operation would be invalid
due to the invalidity of the simulated agreement. Nevertheless,
there are some exceptions to this principle:
o The acquisitionof aproperty/right by the thirdpartywith thegood
faith based on a written and signed document acknowledging a
debt, is protected by law and considered as valid;
o The acquisition of a right
in rem
by a third person with good
faith based on Title Deed records kept by the Land Registry
is protected by law and considered as valid;
o The acquisition of a property / right by a third person with
good faith from a fiduciary.