May 2022

Decision of the Athens Multi-Member Court of First Instance on the declaration of an inadmissible action for fraud

The decision of the Athens Court of First Instance, No. 1009/2022 was issued, which declared the inadmissibility of the discussion of the action for breaking and entering into an unlawful deed due to non-compliance with the mandatory mediation pre-trial procedure. Specifically, it concerned an action for fraudulent conveyance brought by a Servicer (a debt management company) for the breach of a contract for the transfer of real estate by the alleged debtor while there was an alleged bank debt balance of approximately EUR 700,000. In this particular case, however, it was held that the claimant Servicer did not follow the procedure provided for by Article 3 § 2 of Law 4640/2019 as required, since the information form submitted for the mediation procedure was dated later than the date of filing of the claim. In the judgment of that court, the relevant information document, which must be signed by both the lawyer and his client, may be produced at the latest by the time of the hearing of the action, but it must prove that the information on the possibility of mediation took place before the institution of the legal proceedings. That is because the purpose of informing the potential plaintiff in advance, and of mediation in general, is to ensure that the parties have access to justice only in those cases where the parties are aware that the dispute cannot be resolved through a third party who will help them to communicate and find a common ground for the restoration of their relations. In the same context, the court pointed out that this omission in the information sheet did not constitute a formal omission which could be completed after the discussion, following an invitation by the court to the plaintiff's attorney (CPC 227), since such a possibility would frustrate the above-mentioned purpose of the mediation. 

According to the decisive considerations of the judgment: '... the action ... is inadmissibly brought for hearing, as the preliminary procedure provided for in Article 3(3)(b) of the Brussels Convention has not been complied with in this case. 2 of Law 4640/2019 ... In particular, the procedure provided for in Article 3(2) of Law 4640/2019 was not complied with. 1 and 2 of Law No. 4610/2019, which is necessary for the admissibility of the hearing of the present action, since it is an existing civil dispute, the parties to the dispute have the power to dispose of the subject matter thereof, in accordance with the provisions of substantive law, and the action was filed at the Registry of this Court on .../12/2019 ... In particular, the applicant submits with its submissions the information document on the possibility of mediation of the dispute, in which it confirms on .../3/2020 that it became aware of that possibility, but it is clear that that information took place after the filing of the present action at the Registry of this Court, namely after .../12/2019 and in particular on .../3/2020. However, in accordance with the provision of Article 3(3)(b) of the Law of the Republic of Cyprus, the date of the adoption of the decision is not later than 20/2020. 2 Ν. 4640/2019, the attorney must inform his client in writing of the possibility of mediating the dispute prior to the court action, i.e. prior to the filing of the lawsuit, and the relevant information document, which must be signed by both the attorney and his client, may be produced at the latest before the hearing of the case and on pain of the inadmissibility of that hearing, it must, however, show that the written notification of the possibility of a mediated settlement of the dispute took place before the filing of the application and not at a later date. Moreover, to accept that latter possibility would be contrary not only to the letter of that provision but also to its obvious purpose, which is to inform the parties of the possibility of a mediated settlement of the dispute before they bring their action in order to prevent them from bringing their action before the court. In consequence of the foregoing, the action must be declared inadmissible'.