December 2023

Judgment of the Athens Court of First Instance on the Annulment of a Payment Order due to failure to prove that the Servicer was appointed as Servicer of the specific claim

Decision of the Athens Court of First Instance, No. 12397/2023 was published, which annulled a payment order under which an auction of the guarantor's property was accelerated. The judgment upheld a ground of objection relating to a procedural defect in the contested payment order and, in particular, to the failure to comply with the requirements of documentary evidence, since no document was produced together with the application for the payment order showing that the servicing of the credit agreement at issue had been entrusted to the Servicer and the applicant for the contested payment order. 

In particular, in order to prove that the acquiring special purpose vehicle had delegated the servicing of the claim to the opposing Servicer, the summary of the servicing agreement, published at the Athens Pledge Registry, was produced, which showed that the opposing Servicer had been entrusted with the servicing of claims and the more specific powers delegated to it by the special purpose vehicle, but did not show specifically which claims were being serviced and, in particular, which were the subject of the servicing contract.

The judgment thus held that: "However, with regard to the servicing agreement for securitised corporate receivables of ..., on which "..." relies on its exceptional legal capacity as a non-party beneficiary for the purposes of the application for the payment order at issue, it is shown that it is not accompanied by a corresponding annex, and the claim at issue is not mentioned at all in the summary of the servicing agreement under file no. .... or by reference to the contract of sale and transfer or to the publication details of the contract of sale and transfer or its annex or in any other way. [...] The servicing contract of [...] (which, moreover, was not produced) and the agreement of [...] (although produced) are not sufficient to prove the exceptional legitimacy of the above Servicer under the provisions of Law No. 3156/2003 and Law No. 4354/2015 for the filing of the application for a payment order. This is because, in order for this exceptional legitimacy to exist, the publication of the summary of the servicing contract in the books of the Athens Pledge Registry is required in accordance with para. 16 of Article 10 of Law No. 3156/2003, and the only publication that is proven in writing relates to the servicing contract of 6-12-2019, for which, however, it is not proven which requirements [... ] Therefore, since the documents submitted by the defendant before the Judge of the Athens Single Judge of the Athens Court of First Instance for the issuance of the payment order do not prove its legitimacy as the administrator of the claim in dispute that the payment order relates to, its legal capacity as administrator of the claim at issue in the payment order and, consequently, its authority to submit the relevant application on behalf of the foreign special purpose vehicle, the payment order is void for procedural inadmissibility".

Finally, with the adoption of the recent Law no. 5072/2023, it is now stipulated in paragraph 2 of Article 115 that "The forms for publication at the competent pledge office referred to in par. 7 of Article 14 and Para. 7 of Article 21 shall constitute full proof of the exceptional legitimacy of the credit manager, without the need to produce additional documents or to comply with any other wording". However, the issue raised by that decision remains relevant in that even the summary of the servicing agreement must prove that the servicing of the specific loan receivables has been entrusted.