August 2022

Decision of the Athens Court of First Instance on the Cancellation of the Foreclosure Report of a Property with a First Offer Price of 2.170.000€

Recently published was the decision of the Athens Court of First Instance No. 997/2022, which annulled the accelerated enforcement against our client, a limited liability company, for an alleged debt of approximately 1.500.000 €. As a result - one month before the auction was due to take place - the auction of the industrial property of the alleged debtor with a first bid price of € 2,170,000 was cancelled. More specifically, the cheque for execution and the report of the property seizure based on it were considered invalid due to the lack of proof of the active legitimacy of the servicer of the company managing the execution of the loan and credit claims (servicer). That is because the latter did not communicate to the debtor, as it was required to do (under Articles 919, 924 and 925 of the Civil Code), all the documents enabling it to carry out legal enforcement, including, of course, the relevant documents proving that the special purpose vehicle (fund) had concluded a contract for the management of the debt in question with the servicer. The correct reference to the allegedly notified documents in the cheque for enforcement does not invalidate the lack of joint notification where the documents finally notified are different. The disputed passage of the judgment has in words "However, from the information available under the provision of Art. 925 para. 1 of the CCP, communicated to the second opposing party regarding the legitimacy of the applicant and, in particular, the document of the Athens Pledging Office (No. {.....}), the legitimacy of the defendant in the opposition is not evident, since the document no. {....}/2021 document of the Athens Pawnshop, even though it is mentioned in the cheque for payment. Therefore, since the defendant did not communicate all the documents for its active legalisation in breach of Article 925 para. 1 of the Civil Code, the contested cheque for payment {...} and the report on the seizure of immovable property of {...} are invalid. The opposing party's claim that the report on the service of the cheque, which lists all the documents notified together, constitutes full proof of their correct notification (as a public document) was therefore rejected, as it was accepted that in such cases the debtor is allowed to provide counter-proof (i.e. proof that other documents than those listed - even if correctly - in the cheque for payment were finally notified to him).

(for more see here and here)