October 2021

Judgment of the Athens Court of First Instance on the Annulment of the Notice of Continuation of the Auction by a Claims Management Company (Servicer)

The decision of the Athens Court of First Instance (4609/2021) has been published, which annulled the cheque for execution and the declaration of continuation of the auction by a servicer of loan receivables. The court ruled that the execution procedure was unlawfully accelerated as the necessary documents proving the special succession (i.e. the transfer and management of the loan receivables) had not been communicated during the execution procedure. In particular, the entire management contract was not communicated, from which the exact powers of the management company would have resulted, when the latter result not only from Law 4354/2015 but also from the more specific contract between the special purpose company and the management company. The uncertainty about the rights of the management company became even more pronounced since in the relevant documents the management company ordered our client to pay the alleged amount due to a third company and not to the management company itself. As the court typically ruled: 'In this way, the defendants in enforcement, already opposing, are not in a position to adequately and fully verify the active legitimacy of the executor and in particular whether the transfer and management contracts have been lawfully drawn up and what are the individual terms thereof and especially of the management assignment contract due to the indicative enumeration of the powers of the management company in the published summary, confusion which is compounded by the reference to its cheque . .. as the company to which the defendants must pay the cheque ...'.