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February 2025

Decision of the Single-Member Court of First Instance of Athens Annulling a Declaration of Continuation of Auction Due to Abuse


Decision of the Single-Member Court of First Instance of Athens Annulling a Declaration of Continuation of Auction Due to Abuse

A recent decision, No. 1042/2025 of the Single-Member Court of First Instance of Athens, granted our client’s Objection (ανακοπή) and annulled a Declaration of Continuation of Auction under which a claims management company (Servicer) had been pursuing an auction of his property. The court annulled the contested Declaration of Continuation of Auction because it found, on the basis of probability (πιθανολόγηση), that the opposing party’s conduct was abusive.

In this case, our client, who was a guarantor in a credit facility agreement, was in negotiations with the opposing party, and they had agreed in 2023 on the final amount to be paid. However, the claims management company—“although fully aware of the financial circumstances of the principal debtor company and its guarantors, who were in a phase of recovery from the previous crisis years”—insisted on repayment of the agreed balance within five (5) months of signing the settlement. According to the decision’s findings, that timeframe did not afford the principal debtor company and the guarantors a reasonable period to enable payment in full, and as a result, they could not finalize all the terms of the agreement. The opposing party maintained the same stance even after drawing up the contested Declaration of Continuation, withdrawing from the final determination of the disputed claim reached in 2023 “without to this day providing a clear explanation” for this change of position. The Court also took into consideration that the opposing party’s claim would be satisfied to a greater extent through the proposed settlement than through the process of compulsory enforcement.

The relevant passage of the decision reads as follows:

“Nevertheless, although the respondent to the Objection was aware of the financial situation of the principal debtor company and its guarantors—who were recovering from the previous years of the economic crisis—it demanded, on May 31, 2023, payment of this amount (€700,000) within a very short timeframe, namely €200,000 within one month of the agreement, and the remaining €500,000 within five months of the agreement. Because there was thus no reasonable period of several years (rather than a few months) left to enable payment in full of the €700,000 deemed owed, the contested Declaration of Continuation of Auction was drawn up. Even after the recent video conference between the opposing parties on January 15, 2025, the respondent rejected the proposal of the objector and the other parties subject to enforcement—to pay €210,000 as a down payment toward the €700,000 debt, and then repay the outstanding €490,000 over a period of two years—and withdrew from the initial determination of the disputed claim, vaguely alleging that the increase in the value of the seized properties made continuation of the enforcement process more advantageous for the enforcing party, with respect to all involved debtors.”

Therefore, the trial court concluded:

“From all the foregoing, it is probable that the respondent proceeded with the contested Declaration of Continuation in a manner that exceeded the limits imposed by good faith, good morals, and the social and economic purpose of the right, thereby risking irreparable harm to the objector.”

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