November 2023

Judgment of the Kalamata Court of First Instance against the State on the Suspension of Enforcement Proceedings under the Public Revenue Collection Code

The decision No. 230/2023 of the Kalamata Single Judge Court of First Instance was published, which suspended the enforcement proceedings that the State was pursuing against a Societe Anonyme for an amount of approximately 200,000.00 euros on the basis of an issued imputation decision, suspecting the existence of an immediate risk for the company. In particular, the company had previously proceeded with a seizure against the State and in the hands of a credit institution, under which it collected the above amount. That seizure was annulled at second instance, following an appeal by the State, and an application for annulment by the company is pending before the Supreme Court. At the same time, the company had in the meantime entered into a reconciliation agreement with its creditors, which was confirmed by the competent Court. Among the terms of the agreement was the cancellation of the company's debts to the State relating to claims for unjust enrichment for the years prior to the confirmation decision. 

The State, following the annulment of the seizure, proceeded, through the competent body, to issue an imputation decision and a cash certificate for the amount and subsequently served the company with an individual notice in order to proceed with enforcement measures. The judgment accepted that the State did not follow the correct procedure for the recovery of the amount, as it should have previously applied to the courts to obtain legal title. In particular, it states that: 'However, the acts in question [...] are presumed to be unlawful and do not produce legal effects. In particular, the 3rd defendant (Minister for Maritime Affairs and Insular Policy) issued the contested imputation decision, wrongly holding that the final annulment of the enforcement order against the 2nd defendant (Hellenic State) creates, as a matter of law, an obligation on the applicant to return to it the amount of the seizure withdrawn from its own bank account, namely the sum of EUR 181 464,10. However, that judgment is probably incorrect, since the applicant lawfully took over that amount, since, at the time of its recovery, the enforcement measures on which the enforcement proceedings brought by the applicant were based had not been annulled and were therefore valid and had produced their full effects'.

As we stated in the relevant pleading: "In view of the above and given that the payment of the amount of ... euros was in all respects lawful when it took place, as it was made on the ... cheque for payment, the following copy of the document no. .... a' executable copy of the third party declaration no. ... filed before the Nafplio Magistrate's Court, as well as in ... of our company against the opposing party, in the hands of the aforementioned credit institutions, the opposing party, in order to lawfully claim the repayment of the said amount from our company and to secure the cash of its alleged claim against us, following the final annulment of the aforementioned enforcement acts, should either bring an action against us for unjust enrichment (a. 904 et seq. of the Civil Code), or to request the restoration of the property to its previous state during the relevant pending litigation (Article 914 of the Civil Code), or to request compensation following the irrevocable annulment of the enforcement order (Article 940(3) of the Civil Code). ... decision of the Athens Court of Appeal cannot be a legal basis either for the issuance of the contested imputation decision or for the subsequent cash confirmation of the alleged debt, since, according to the above-mentioned, the forced seizure that we have accelerated against the opposing party is not affected either by the fact that the related enforcement acts were annulled by the Court of Appeal or by the fact that the opposing party's appeal was accepted'.

An important element in the Court's decision on the stay was the fact that the company had recently been placed in reconciliation proceedings, the terms of which it strictly complied with.