On the application of Art. 19.2 Service Regulation in Greece
In a recent ruling, the Supreme Court
dismissed the cassation against an appellate decision, confirming the findings
of the first instance ruling, which applied Art. 19.2 Service Regulation,
following the return of a non-service certificate by an Italian bailiff. The
interesting part of the judgment is related to the presumption of the Supreme
Court that failure of the defendant to notify his change of abode, allows a
court to continue with the proceedings, even when the change occurred before
lis pendens.
[Supreme Court 1130/2017, unreported]
THE FACTS: The
litigants are two companies from Greece [G] and Italy [I] respectively. They
concluded a subcontract for work in June 2002. According to the agreement, the
Greek company would have to prepare a set of decorative constructions in a
store in Athens. The Italian company would then cover all expenses and fees.
Upon completion of the work, [I] was in default of payment for the sum of
80.381 Euros. [G] filed an action for the above sum before the Athens 1st
Instance court. The claim was properly transmitted from the competent Greek
authority to the Italian counterpart (Rome office of court bailiffs), which
confirmed receipt of the documents. Some weeks later, the latter sent back to
the Greek Authority a certificate of the Vicenza Prosecutor’s Office, and
another of a bailiff appointed at the Vicenza 1st Instance court,
stating that the claim could not be served, because [I] has changed its seat. Based
on the facts aforementioned, the Athens 1st Instance court continued
with the proceedings. [G] was successful in both instances [Athens First
Instance Court, default Judgment Nr. 2465/2010 &
Athens CoA, Judgment Nr. 3892/2014, both
unreported]. [I] appealed before the Supreme Court; one of the
grounds for cassation was improper service pursuant to the Service Regulation.
THE RULING: The Supreme Court began its analysis by stating the
prevalence of the Service Regulation over domestic law and the 1965 Hague
Service Convention, whenever a document needs to be served within an EU Member
State. Passing through Articles 6, 7 & 10 Service Regulation, it landed on
Art. 19 Paras 1 & 2, stressing out that Greece has made a declaration,
allowing domestic judges to proceed with the hearing upon fulfilment of the
conditions set under Art. 19.2.
Departing from the factual situation described above, the Supreme Court
endorsed the reasoning of the Athens CoA: All conditions set under Art. 19.2
Service Regulation have been met, i.e. service by one of the methods provided by
the Regulation; lapse of the 6-months period; no service made, despite the
efforts of the Italian Authorities. In particular, so the Supreme Court, the
efforts remained fruitless because of [I’s] transfer of seat, and the omission
of the latter to notify its new registered office, so that the Authorities
could have served the claim there.
For the reasons above, the Supreme Court dismissed the cassation.
COMMENTS: Greece is one of the Member States which proceeded to
the declaration pursuant to Art. 23.1 Service Regulation. Case law and legal
authority concur that the point of departure for calculating the six month
period is that of the transmission of the document from the Greek to the
foreign Authority.
I. An issue still not entirely clarified, is the first condition
of Art. 19.2 (c), i.e. that no
certificate of any kind has been received. Courts are divided: Some
instance courts construe the provision verbatim; hence, whatever document is
sent by the Receiving Authority, i.e. either a service or a non-service certificate,
is considered sufficient for rejecting the application of Art. 19.2. On the other
side, the Supreme Court and the major part of instance courts interpret the
rule as referring solely to certificates of service.
II. A second and even more intriguing issue is intertwined with the content
of a non-service certificate. Some of the variations are listed in the
standardized certificate issued under Art. 10 of the Regulation. There are four
alternatives under Nr. 15 of the model certificate:
15.1. Address unknown
15.2. Addressee cannot be located
15.3. Document could not be served before the date or time limit stated
in point 6.2.
15.4. Others (please specify).
Nr. 15.1 leads undoubtedly to the non-application of Art. 19.2: If the
recipient is of unknown residence, Art. 1.2 comes to the fore, so national law
becomes again decisive.
Nr. 15.3 is not relevant to the issue at stake.
Nr. 15.4 is to be examined (and specified) only if Nr. 15.2 does not provide a convincing reason.
Nr. 15.2 refers to the situation where the addressee cannot be located. In
practice, Authorities add to this phrase some additional explanations:
i)
Not located,
because there is no visible indication that the addressee was ever a resident
there.
ii)
Not located,
because the addressee was there, but he moved to another place inside the
country, which is known.
iii)
Not located,
because the addressee was there, but he moved to another place inside the
country, which is not known.
iv)
Not located,
because the addressee was there, but he moved to another place outside the
country, which is known.
v)
Not located,
because the addressee was there, but he moved to another place outside the
country, which is not known.
Point i) resembles to Nr. 15.1; thus, it leads to non-applicability of
the Service Regulation (Art. 1.2). Further on, with respect to points ii) and
iv), we may argue about the existence of a potential obligation imposed on the
Receiving Authority to engage in further action, with the aim to serve the
document to the recipient’s new abode. The latter is however to be excluded for
Point v).
Our case falls under point iii).
The Supreme Court concluded that the Italian Authority did its best, or, as the
text of the provision stipulates, every
reasonable effort has been made to obtain it. It is of course not directly evidenced
by Art. 6-7 of the Regulation that the Receiving Authority is obliged to
proceed to further scrutiny, when the recipient is not to be found in the
address stated in the claim. Still, what we’re dealing with (in our case) is a
company, i.e. a legal entity registered in accordance with the rules and
regulations of Italy. Hence, the broader question: Is it to be expected by the
Receiving Authorities of any Member State that they proceed to further action in
cases such as the present one, or should they just return the documents back to
the country of origin?
III. Finally, some skepticism should be voiced in regards
to the Supreme Court’s position, which confirmed the application of Art. 19.2
on the basis of the recipient’s failure to inform the Italian authorities on
its new seat. It is widely acknowledged that the purpose of the provision is to
establish a counterbalance to the strict rules posed by Art. 19.1: The defense
rights of the addressee need to be prioritized; however, the right to judicial
relief is also worthy of protection. Nevertheless, for passing to the latter,
we need to be sure that the former has been respected, at least in essence.
In the case at hand, we have a plaintiff who files a claim against an
Italian company, by stating a certain address in the foreign country. Following
transmission, it becomes evident that the defendant was not a resident in the
address mentioned in the claim. It is the duty of the plaintiff to state a proper
address, where the defendant may be found. On the other side, [I] was not legally
obliged to inform [G] as to its transfer of seat prior to lis pendens. The
opposite would have been the case if it had already received notice of the
proceedings. By blaming the defendant for not having informed the Italian
Authority as to its new seat, the Supreme Court gives carte blanche to the
plaintiff to move ahead with the proceedings, although the address stated in
the claim does not coincide with the actual seat of the defendant. In this way,
the Supreme Court seems to establish an obligation to every (potential!)
litigant, to inform the Authorities (which Authorities actually?) of his new
abode, in the event that a claim would need to be served against him in the
future. It might have been more reasonable to ask the plaintiff to conduct his
own research, in order to trace the defendant’s new seat, and serve the claim
afresh.
Labels: Service Regulation