July 2022

Judgment of the Single Judge of the Court of First Instance of Arta suspending the enforceability of a payment order and its non-appearance in the Financial Conduct Files

Recently, the Arta Court of First Instance issued the decision No 150/2022, which ordered the suspension of the enforceability of a Payment Order, amounting to approximately EUR 130,000, issued following an application by a credit institution in special liquidation. The court held that the ground of appeal relating to the lack of transparency of a contractual clause contained in the credit agreement which gave rise to the issue of the order for payment at issue, which provided for the calculation of interest on the basis of a 360-day year, was likely to succeed. According to the decisive considerations of that judgment, '... the contractual clause providing that interest is to be calculated on the basis of a 360-day year is contrary to the principle of transparency, which requires that the terms be worded in a definite, correct and clear manner [...]. Furthermore, ... the condition that interest be calculated on the basis of the 360-day year and not the 365-day year is contrary to Community Directive 98/7/EC, which was transposed into national law by means of the Commission Decision Z1-178/13.2.2001, in its express wording, and to the provision of Article 243(1)(b) of Directive 98/7/EC. 3 of the Civil Code, as the consumer is not informed of the actual interest rate, as it should be determined on the basis of the above provision...'. Indeed, with regard to the consequences of the recognition of the invalidity of the relevant contractual term for the validity of the contested payment order, the court held that "... there is no partial invalidity in the present case of the payment order relating only to the interest calculated on the basis of the 360-day year, as the defendant wrongly claims in the grounds to the contrary set out in its note, but the validity of the order as a whole is affected, since it is not possible, on the basis of the documents on the basis of which it was issued, to separate those amounts, as stated above, or even on the basis of simple mathematical calculations, in order to deduce from them the exact amount of the claim in respect of which the contested order for payment is sought'. Following the above, the court suspended the enforceability of the contested payment order until a final decision on the opposition against it has been given, while ordering that it should not appear in the data files maintained by (or for the benefit of) credit institutions.