February 2023

Judgment of the Athens Multi-Member Court of First Instance on the Non-Binding of Creditors under a Confirmed Resolution Agreement

The decision No 796/2023 of the Athens Court of First Instance was recently issued. The latter ruled that our client company, which is active in the energy sector, is entitled to claim its overdue claims against its counterparty, a public limited company under reorganisation proceedings. This is because the claims in question arose after the adoption of the decision confirming the reorganisation agreement (in accordance with the specific provisions of Article 106c of the previous CC and the current Article 60(1)(b)). 2 ν. 4738/2020 according to which: 'Creditors whose claims arose after the issuance of the decision confirming the reorganisation agreement are not bound (i.e. by the reorganisation agreement)'}. It was further ruled that our client is entitled to cut off the electricity supply to the debtor - company in reorganisation, in the event that the latter a) fails to pay its current - contractual debts (from and after the issuance of the resolution) and b) fails to pay within specified monthly instalments the amount of €150,000, as part of its overdue debt of more than €500,000. It is worth noting that the applicant company, which was in the process of being reorganised, was in essence requesting the continuation of the contractual relationship with our client company and, as a result, the continuation of the supply of electricity, citing the impossibility of meeting the debts in question and the risk of its ceasing its activity (and, as a result, of jeopardising the reorganisation procedure), while denying our client's right to interrupt the supply services. The court, in combining the interests at stake, granted the applicant the protection sought (continuation of the supply of electricity services), but also recognised the high financial risk to our client from the non-receipt of the claim in question, obviously taking into account the presumed viability of the undertakings in reorganisation. The following passage in that judgment is of interest: 'In order to reconcile the conflicting interests, it is therefore considered that, on the one hand, the first defendant should not interrupt the electricity supply and, on the other hand, the applicant should be as consistent as possible, taking into account the financial risks that this entails for the first defendant'.