Decision No. 555/2026 of the Single-Member Court of First Instance of Achaia (Central Seat of Patras – Enforcement Objections Department) was recently issued. By this decision, the court upheld the objections (filed pursuant to Article 933 of the Greek Code of Civil Procedure) brought by our client and annulled both the report of the compulsory auction and the summary of the adjudication report issued thereunder, as well as the subsequently served order directing our client to surrender possession of the auctioned property.
In the present case, enforcement proceedings took place which led to the auction of our client’s property without compliance with the mandatory pre-auction procedure. More specifically, the extract of the seizure report was not validly served upon a mortgage-secured creditor, as required by Article 995(4) of the Greek Code of Civil Procedure, resulting in the invalidity of the auction.
The court held that the auction in question was invalid due to non-compliance with the required procedural formalities prescribed by Article 995(4) GCCP. The particular legal significance of the case lies in the fact that, at the time the seizure was imposed, the secured claim had already been transferred by the original lending institution (“ALPHA BANK S.A.”) to a foreign special purpose vehicle (SPV) named “GALAXY II FUNDING DESIGNATED ACTIVITY COMPANY”, pursuant to the provisions of Law 3156/2003. Although this particular succession had not yet been recorded in the mortgage registers or in the relevant cadastral record of the property, the transfer of the claim had nevertheless been validly completed.
In support of this argument, we submitted to the court ad hoc case law, namely Decision No. 697/2025 of the Single-Member Court of First Instance of Athens (Enforcement Objections Department), which had been issued on an identical legal issue.
According to the key findings of Decision No. 555/2026, which fully adopted our submissions and held that service of the seizure report extract ought to have been effected upon the actual and substantive successor to the secured claim, namely the special purpose vehicle: “[…] However, at the time of the seizure, the aforementioned secured creditor had already transferred the claim for the security of which it had registered a pre-notation of mortgage over the above seized plot of land to the foreign special purpose vehicle named ‘GALAXY II FUNDING DESIGNATED ACTIVITY COMPANY’, in accordance with Article 10 of Law 3156/2003 […] Consequently, at the time of the seizure of the above property, which took place on 25 January 2022, and throughout the fifteen-day period thereafter, the secured creditor was not ‘ALPHA BANK S.A.’ but rather the special purpose vehicle ‘GALAXY II FUNDING DESIGNATED ACTIVITY COMPANY’, upon which no extract of the seizure report was ever served, in clear violation of Article 995(4) of the Greek Code of Civil Procedure.
In view of the foregoing, service of the extract of the seizure report pursuant to Article 995(4) GCCP should have been effected upon the actual and substantive successor to the secured claim, namely the foreign special purpose vehicle ‘GALAXY II FUNDING DESIGNATED ACTIVITY COMPANY’, irrespective of the fact that the particular succession had not yet been recorded in the mortgage registers or cadastral records.
This is because the purpose of the service requirement is to ensure that the secured creditor is able effectively to protect its interests during the enforcement proceedings, exercise the remedies and procedural rights available to it, file a declaration of claim, initiate enforcement proceedings itself, and monitor the legality of the auction procedure. Failure to comply with this procedural requirement constitutes a substantial procedural defect which directly impairs the rights of defence and judicial protection of the actual beneficiary of the security interest […]”.
Finally, particular attention should be drawn to the court’s reasoning regarding the duty of diligence incumbent upon the enforcing party. As the court expressly held: “[…] Furthermore, the registration of the transfer agreement was publicly accessible to any interested party and was sufficient to provide notice of the change in the identity of the holder of the claim. Consequently, the respondents to the objection had the ability, by exercising the degree of diligence required in commercial transactions, to ascertain the identity of the actual holder of the claim and to proceed with the lawful service of the extract of the seizure report upon that entity […]”.
The decision is particularly important because it confirms that, for the purposes of Article 995(4) GCCP, service must be effected upon the true holder of the secured claim, even where the transfer has not yet been recorded in the mortgage registers or cadastral records. The court further emphasized that parties conducting enforcement proceedings bear a positive duty to investigate publicly available information concerning the ownership of secured claims and cannot rely solely on outdated registry entries when determining the persons entitled to receive statutory notifications within the enforcement process.
