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 1^st 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 1^st Instance court, stating that the claim could not be served, because [I] has changed its seat. Based on the facts aforementioned, the Athens 1^st 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.

Dear all


I would like to bring to your attention an article of mine, which is scheduled to be published in the next edition of International Journal of Procedural Law.

In anticipation of the publication, I have uploaded the article in SSRN.

The web page, where the text may be found is the following:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2868091

Title

Greek Payment Orders Against Foreign Residents - Amendments to Articles 623 Et Seq. Greek Code of Civil Procedure

Summary

 

Since January 1, 2016, law No. 4335/2015 entered into force, resulting in radical changes in Greek civil litigation. Part of the reforms deals with amendments to the chapter on payment orders. Previously it was forbidden to issue a Greek order for payment, if the debtor was residing abroad. Pursuant to the new provisions, this is no longer the case. The importance of the matter for foreign debtors is related to the peculiar nature of the Greek model: Unlike the majority of EU Member States’ legislation, the Greek order for payment is, once issued, automatically an enforceable title. The new provisions feature therefore a dual system, depending on the residence of the debtor: With respect to debtors living in Greece, the order for payment remains immediately enforceable; however, additional requirements have been posed, when the order for payment has to be served abroad, in order to safeguard the rights of the defendants.

 

 

 

Refusal to accept Greek proceedings by a Greek living in Germany (Art. 8 Service Regulation)

A judgment rendered last year by the Thessaloniki 1^st Instance Court is expected to give rise for new comments on the right of the recipient to refuse documents from abroad. The interesting part of the ruling is that the respondent refusing to receive the claim was of Greek nationality, living in Germany.

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THE FACTS: The parties are a Greek bank (the claimant) and a Greek debtor living in Germany (the defendant). The claimant initiated compensation proceedings before the Thessaloniki Court of 1^st Instance, in order to obtain an enforceable title covering the remaining unpaid sum. The claim was filed with the court and a hearing date was set, as it was the case in accordance with procedural provisions in force until 31.12.2015[1]. Following the above, the claimant served the claim to the Thessaloniki Prosecutor’s Office, the latter being the Transmitting Agency officially declared by the Hellenic Republic. At the hearing date, the claimant submitted three documents in this respect:

a)      A true copy of the certificate of service to the Prosecutor’s Office by a competent Greek process server.

b)      The original of the standard form issued in accordance with Art. 4 Para 3 Service Regulation.

c)       The standard form issued in accordance with Art. 10 Service Regulation, where it was noted that the recipient refused acceptance of the document.

 The defendant was in default of proceedings.

THE RULING: The court dismissed the hearing of the action[2] as inadmissible. It founded its ruling on several provisions of the Service Regulation (Articles 5, 8, 10 and 19). It was clear that the claim was served without a translation in German, i.e. the official language of the Member State addressed. Hence, the court focused especially on Article 8 Para 1 (b) Service Regulation, and decided that the addressee (defendant) did not understand the language of the Member State of transmission (Greek). The foundation upon which the court based its judgment was the following:

a)      The defendant’s refusal to accept the document recorded in the standard form aforementioned was not justified; however, it is presumably connected with the inability of the defendant to understand the Greek language.

b)      The claimant failed to produce any correspondence between the parties related to the subject matter in the Greek language.

c)      The loan contract was not signed by the defendant; he appointed a proxy for this cause.

Finally, the court emphasized that the claimant could have served a fresh copy of the claim, this time with an attached translation; however, he failed to so.

For the above reasons, the Thessaloniki Court of 1^st Instance dismissed the hearing of the action as inadmissible.

COMMENTS: There has been pretty much discussion about the right of refusal established in Article 8 Service Regulation. Starting with the Leffler case of the CJEU [Case C-443/03], the claimant had the chance to secure that the hearing takes place, by sending a translation of the claim. Secondly, the CJEU has recently clarified that ‘the fact that that agency, when serving a document on its addressee, fails to enclose the standard form set out in Annex II to Regulation No 1393/2007, does not constitute a ground for the procedure to be declared invalid, but an omission which must be rectified in accordance with the provisions set out in that regulation’ [case C‑519/13, Alpha Bank Cyprus Ltd]. It has not been mentioned in the judgment whether the Greek agency did enclose the above standard form or not. This is however a secondary matter in the present case, since the defendant managed to exercise his right of refusal.

Last but not least, the CJEU has clarified in the case Ingenieurbüro Michael Weiss und Partner GbR [Case C-14/07], that ‘Article 8(1)(b) of Regulation No 1348/2000 is to be interpreted as meaning that the fact that the addressee of a document served has agreed in a contract concluded with the applicant in the course of his business that correspondence is to be conducted in the language of the Member State of transmission does not give rise to a presumption of knowledge of that language, but is evidence which the court may take into account in determining whether that addressee understands the language of the Member State of transmission’. Without referring to the above ruling, the Thessaloniki court took into account the surrounding circumstances of the contract, and concluded that the fact that it was drafted in Greek[3] does not give rise to a presumption of knowledge of that language, because (as stated above) no correspondence in Greek has been produced to the court by the claimant. Finally, no direct involvement of the defendant was proven, both in the pre-contractual phase, as in the day the contract was signed, since he was represented by a proxy.

To sum up, it was probably the inaction of the claimant which triggered the court to decide in favour of the defendant. The lesson learned by this ruling is that it takes more than a default party and a complacent presumption that all Greeks understand Greek to win a case.

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[1] The 2016 reform has modified vastly the pre-trial phase in ordinary proceedings: previously the claimant was serving proceedings only after the hearing was scheduled; by virtue of the new system service takes place after filing and before scheduling the hearing date.

[2] i.e. not the action itself. In the latter case, the plaintiff is obliged to file a new claim, whereas in the former he only needs to summon the defendant, once the vice has been healed.

[3] It is not stated in the judgment whether there was a clause such as the one mentioned in the Ingenieurbüro Michael Weiss und Partner GbR case. However it is common sense that any following correspondence would have to be drafted in the language already selected for the contract.