Recently, the Athens Court of First Instance issued Decision No. 70222/2024, which annulled a payment order issued by a leasing company against our client—a real estate management corporation. Specifically, the court ruled that the total amount adjudicated by the aforementioned payment order, corresponding to overdue installments of a financial lease (leasing), had already become time-barred before the contested payment order was served.
According to the court's findings, a financial lease contract constitutes a mixed agreement in which the characteristics of leasing prevail over those of a loan. Consequently, Article 250, subsection 16, of the Greek Civil Code (GCC) applies, which establishes a five-year statute of limitations for claims arising from lease agreements. Furthermore, the decision emphasized that the five-year limitation period for claims arising from financial leasing agreements serves the purpose of ensuring the prompt and secure resolution of these transactions, which typically occur between merchants (whose claims are also subject to a five-year limitation under Article 250, subsection 1, GCC).
The critical reasoning of the decision includes the following:
"However, the fact that the lease payments are determined based on the amount spent by the lessee to purchase the asset—so that the investment is amortized during the lease's contractual term—and the shifting of certain lessor obligations onto the lessee, do not justify completely detaching the financial lease agreement from its leasing core: the use of movable or immovable property in exchange for payment for such use. On the contrary, the leasing element is very strong in financial leasing agreements, which, despite the term 'financial,' remain leases {...} Moreover, the five-year period and its fixed commencement primarily benefit the creditor—in this case, the lessor—who, conducting commercial transactions, should not be burdened with varying commencement dates for the statute of limitations on claims arising from these agreements".
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