September 2022

Judgment of the Athens Court of Appeal on the Suspension of the Auction due to Lack of Servicer Legalization

The decision of the Athens Court of Appeal (4547/2022) was issued, which ordered the suspension of the auction of the property due to the lack of legitimacy of the Servicer (debt management company). Specifically, it was held that the Servicer had no authority to carry out procedural acts and in particular enforcement acts (seizure, auction, etc.) since the claim in question had been transferred under the 2003 law (3156/2003) and not under the 2015 law (4354/2015). We have written quite a bit on this issue and we refer you here, here and here. Importantly, the courts have continued for some months now to accept this view, which was also accepted by the Athens Court of Appeal decision No. 4547/2022, and indeed the case law in question maintains its momentum at the level of the Courts of Appeal throughout Greece. 

The decisive passage of the above judgment is as follows: 'However, it was accepted in accordance with what has been stated in the preceding legal considerations, that the debt management companies which were entrusted with the management of business receivables under the terms of the Law. 3156/2003, i.e. in the context of securitisation, this law does not confer the status of exceptional legal capacity of a non-beneficiary party, and therefore (does not confer) the legal capacity to perform enforcement actions, but only extrajudicial management (legal or material) actions. Therefore, the provisions of Law no. 4354/2015 and what they provide for the exceptional legalisation (as non-party beneficiaries) of loan management companies etc. that it establishes, do not apply to the management companies of Law No. 3165/2003. These are different legal provisions that continue to apply in parallel to the transferred claims made under the terms and procedure of each of the above laws. Precisely in order to avoid any confusion as to the legal provisions applicable in each case, it was expressly stipulated in Art. 1(d) of Act No. 4354/2015 that the provisions of the latter do not affect the application of the provisions of Law 4354/2015. 3156/2003. The power to exceptionally legalise a non-beneficiary party in the management companies of claims transferred under the terms of Law no. 3156/2003 does not confer the right to enforce the rights of debtors in the case of claims for compensation of debtors who have been granted a right of restitution in the case of claims for compensation of debtors who have been granted a right of restitution in accordance with Article 2(2)(a) of the Act. 4 of Law no. 4354/2015 does not apply to them. In this regard, the b' of the defendants, in which the a' of the defendants foreign special purpose company (acquisition by securitization of receivables) under Article 10 of Law no. 3156/2003 entrusted the management of the acquired receivables, including the claim at issue, by means of a contract of mandate, has not been designated by law as a party who is not a beneficiary, exceptionally entitled to legal capacity, and is therefore not entitled to perform procedural acts on behalf of its principal, nor can the contract between them and the granting of power of attorney establish such legal capacity'.