Friday, 31 January 2014

On the application of the Hague Service Convention in Greece

The Hague Service Convention was ratified by the Hellenic Republic almost 30 years ago. Although the respective act has been published back in 1983, its actual implementation began only 6 years later, i.e. sometime in 1989. Meanwhile the Convention constitutes an instrument well known in disputes with foreign elements; a recent search on Greece’s most reliable legal database has returned 185 hits. My report will focus on two judgments from 2012, dealing with service of process to the USA.

I. In the first case [Supreme Court, Nr. 221/2012, not yet reported], the issue was whether Articles 15-16 of the Convention should be applied in regards to a notice for a sworn statement to be given before a Greek notary public. In the early stages of its application, there was some confusion as to the distinction between the writ of summons or an equivalent document and other documents, following the initial stage of proceedings. First instance courts for example have rendered rulings, according to which, personal service was imperative even for judgments or writs of attachment. In the late ‘90s, the Supreme Court drew a clear-cut line between documents instituting proceedings and subsequent judicial or extrajudicial documents in the course of the same proceedings: For the former, the requirements stated under Article 15-16 are to be respected under any circumstances, whereas for the latter, there is no obligation to follow the prerequisites of the Service Convention. Hence, service can take place according to the Greek Code of Civil Procedure (CCivP). Mention needs to be made here to the fact that Greece has adopted the French model of remise au parquet, in other words the so-called fictional or deemed service (Art. 134 & 136 CCivP). The above case law has been constantly enriched over the past 15 years, and constitutes nowadays the prevailing view both in theory and practice, especially after the ruling of the Supreme Court’s Plenum in 2009 [Nr. 22/2009, Epitheorissi Politikis Dikonomias = Civil Procedure Review 2009, p. 776 et seq.].

Until recently, the respective case law was related to enforcement documents. The novelty of the present ruling lies in the fact that it is the first judgment expanding the rule of non-application of Articles 15-16 of the Convention to affidavits.

II. In the second case [Athens CoA Nr. 223/2012, Efarmoges Astikou Dikaiou & Astikou Dikonomikou Dikaiou = Theory and Practice of Civil Law & Civil Procedure Law 2012, p. 760 et seq.] the issue at stake was whether an appeal could be served by virtue of the law of the State addressed. In particular, the appellant, instead of making use of the service methods stipulated in the Convention, in order to notify the appeal to its recipient in the USA, he opted for serving the document pursuant to Rule 1.080 b & f Florida Rules of Civil Procedure. The Athens Court of Appeal accepted the method of service chosen on two grounds: First, because Article 137 Greek CCivP grants the right to serve documents according to the provisions and formalities of the State addressed; and secondly, because Articles 10 c & 19 of the Convention allow any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination, to the extent that the internal law of the latter State permits methods of transmission, other than those provided for in the preceding Articles. Given the fact that no indication of the contrary was evidenced in the ensuing proceedings, the court found no reason to reject the certificate of service produced by the appellant.


Serving Greek Proceedings to US defendants - A case law survey

I will focus on reported case law regarding service of Greek proceedings to defendants / litigants living or having their seat in the USA.

I.                    Greek courts have refused to render a default judgment under the following circumstances:

a)      When the claimant produces to the court solely the certificate of service to the competent (Greek) Public Prosecutor’s office[1] [Supreme Court 250/1993, 657/1995, 835/2007, CoA Larissa 740/2008, CoA Patras 453/1993].
b)      When the claimant does not produce a certified translation of the US certificate of service, i.e. he only includes the original or a true copy with no Greek translation [1st Instance Multi-Member Court Samos 25/2012].
c)      When the document reaches the US competent authority or the defendant after the day of the hearing [CoA Athens 734/1992, 1st Instance Multi-Member Court Amfissa 105/1992].
d)      When domestic time limits for the appearance of the defendant before court have been violated[2]. In this case, even if the claimant produces the US certificate of service and a Greek translation attached, the hearing will be adjourned, and fresh service is required [Supreme Court 1566/2010].
e)      When the claimant surreptitiously opts for fictional service or service by publication[3], without scrutinizing the possibilities for using conventional methods of service [Supreme Court 503/2011 &, CoA Piraeus 730/2008]. However, if the claimant exhausts the latter with no result, he’s allowed to proceed to the former [1st Instance Multi-Member Court Athens 449/2004]. Hence, a successive option is legitimate [1st Instance Court Thessaloniki 38292/2009 & 20721/2010].

II.                  On the other hand, Greek courts rendered a default judgment under the following circumstances:

a)      When six months have passed since the day of transmission, according to Article 15 Para. 2 b of the Service Convention, even if the document has been sent back to Greek channels as undeliverable [Supreme Court 851/2007 & 433/2001].
b)      When the claimant opts for service based on US statutes (in application of Article 137 Greek CCivP, which allows this form of service) [CoA Athens 223/2012.
c)      When the claimant opts for service to a legally appointed proxy in Greece, thus avoiding service of process to the US [Supreme Court 909/2004, CoA Dodecanese 200/1998, CoA Larissa 474/2006].

Finally, serving documents instituting proceedings in first and second instance, or even to the Supreme Court, are within the field of application of the Service Convention, unlike other documents beyond the claim (summons for sworn statements, writs of attachment, etc), where domestic law prevails [Supreme Court 1658/2009, 266/2004, 1447/1988, CoA Dodecanese 81/2008 & 234/2005 ].

[1] According to Article 134 Greek CCivP, for the purposes of serving foreign defendants, documents are to be served to the Public Prosecutor of the competent court, who is entrusted with forwarding the document to the Ministry of Foreign Affairs. From there, the document will be transmitted to the Receiving Agency of the respective country, in order to be delivered to its actual recipient.
[2] According to Article 229 Greek CCivP, the claim has to be served 90 days before the hearing.
[3] According to Article 135 Greek CCivP, persons of unknown residence are to be served in a fashion similar to the particulars of Article 135 Greek CCivP, plus its publication in two newspapers (one in Athens, the capital, the second in the venue of the court).


Excessive English Costs Orders and Greek Public Policy Note on Corfu CoA Nr. 130/2012 & Piraeus CoA Nr. 30/2012

Two recent CoA rulings in Greece have demonstrated the significance of the public policy clause in international litigation and arbitration. Both judgments are dealing with the problem of recognition and enforcement of
”excessive” costs awarded by English courts and arbitration panels. The issue has been brought several times before Greek courts within the last decade. What follows, is a brief presentation of the findings, and some concluding remarks of the author.

I.a. In the first case, the Corfu CoA refused to grant enforceability to a costs order and a default costs certificate of the York County Court on the grounds that Greek courts wouldn’t have imposed such an excessive amount as costs of the proceedings for a similar case in Greece. In particular, the court found that, granting costs of more than 80.000 £ for a case, whose subject matter equals to 17.000 £, contravenes Greek public policy perceptions. Thus, the amount of 45.000 + 38.251,47 £ has been considered as manifestly disproportionate and excessive for the case at hand. Consequently, the CoA granted exequatur for the remaining sums, and refused recognition for the above costs, which could not be tolerated by a court of law in Greece.

I.b. In the second case, the Piraeus CoA recognized an English arbitral award despite the allegations made by the appellant, that the award’s order for costs contravened public policy. In this case the subject matter was in the altitude of nearly 3 million $, whereas the costs granted did not exceed 100.000 £. The court applied the same rule as in the previous case, and found that the costs were not disproportionate to the case at stake.

 II. As already mentioned above, those decisions are the last part on a sequence of judgments since 2005. Free circulation of English judgments is generally guaranteed in Greece; the problem starts when English creditors seek to enforce the pertinent costs orders. For Greek legal views, it is sheer impossible that costs exceed the actual subject matter of main proceedings. This was reason enough for the Supreme Court (Areios Pagos = AP) to establish the doctrine of public policy violation, on the occasion of an appeal against a judgment of the Athens CoA back in 2006 [AP 1829/2006, Private Law Chronicles 2007, p. 635 et seq.]. The Supreme Court held, that granting enforceability to similar orders would violate the principle of proportionality, which is embedded both in the Greek Constitution and the ECHR. At the same time, it emphasized that the excessive character of costs impedes access to Justice for Greek citizens, invoking again provisions from the Greek Constitution (Art. 20.1) and the Human Rights Convention (Art. 6.1). The reasoning of the Supreme Court is followed by later case law: In an earlier judgment of the Corfu CoA [Nr. 193/2007, Legal Tribunal 2009, p. 557 et seq.] the court reiterated the line of argumentation stated by the Supreme Court, and refused to grant exequatur (again) to an English order for costs. Two years later, the Larissa CoA [Nr. 484/2011, unreported], followed the opposite direction, based on the fact that costs were far lower than the subject matter of the dispute.
In regards to foreign arbitral awards, mention needs to be made to two earlier Supreme Court judgments, both of which granted enforceability and at the same time rejected the opposite grounds for refusal on the basis of Art. V 2 b NYC. In the first case [AP 1066/2007, unreported], the Supreme Court found no violation of public policy by recognizing an English award, which awarded costs equivalent to half of the subject matter. A later ruling [AP 2273/2009, Civil Law Review 2010, p. 1273 et seq.] reached the same result, by making reference to the previous exchange of bill of costs particulars, for which none of the parties expressed any complaints during the hearing of the case before the Panel. 

ΙΙΙ. In conclusion, it is obvious that Greek courts are showing reservation towards those foreign costs orders, which are perceived as excessive according to domestic legal standards.  This stance is not unique, taking into account pertinent case law reported in France and Argentina [for the former, see Cour de Cassation 1re Chambre civil, 16.3.1999, Clunet 1999, p. 773; for the latter see Kronke / Nacimento / Otto / Port (ed.), Recognition and enforcement of foreign arbitral awards – A global commentary on the New York Convention (2010), p. 397, note 245]. The decisive element in the courts’ view is the interrelation between the subject matter and the costs: If the latter is higher than the former, no expectations of recognition and enforcement should be nourished. If however the latter is lower than the former, public policy considerations do not usually prevail.    

Final point: As evidenced by the case law above, it is clear that the Greek jurisprudence is applying the same criteria for foreign judgments and arbitral awards alike, irrespective of their country of origin. As far as the latter is concerned, no objections could or should be raised. However, making absolute no distinction between foreign judgments emanating from EU – Member States and non-Member States courts seems to defy the recent vivid discussion that predominated during the Brussels I recast preparation phase (2009-2012). Fact is, that public policy survived in the European context, and will continue playing a significant role in the new era (Regulation 1215/2012). Still, what is missing from Greek case law is an effort to somehow soften the intensity of public policy control in the EU landscape. Whatever the reason might be, a clear conclusion may be reached: Greek case law gives back to public policy a Raison d'être, demonstrating the importance of its existence, even when judicial cooperation and free circulation of judgments are the rules of the game.


Choice of forum in bills of lading before Greek courts

A recent judgment from the Thessaloniki Court of Appeal demonstrates the validity problems of jurisdiction agreements in contracts for the carriage of goods by sea.

The facts of the case are simple: A Greek company purchases goods from a Dutch company; goods are to be sent to the port of Thessaloniki, where the Greek company has its seat. A commission agent is entrusted with the transport details to Thessaloniki. Loading takes place in the port of Kotka, Finland, on a ship with Bulgarian flag. The Dutch carrier signs the bill of lading and he then endorses it to the Greek buyer, who becomes its legal holder. The latter concludes an insurance agreement with a Greek company. Due to erosion caused by seawater, goods were damaged. The Greek insurance company paid the agreed price to the buyer. It then files claim against the Dutch carrier and the Greek commission agent before the Thessaloniki first instance court; the latter rejected the action on the grounds of lack of international jurisdiction, emanating from a choice of forum clause in favor of Hong Kong courts in China, embedded in the general terms of the bill of lading. 

The appeal court’s analysis began by Art. 23 of the Brussels Regulation and the need for its narrow interpretation in respective cases, in light of the ECJ ruling in the Tilly Russ case. It then continued with the analysis of domestic law provisions regarding derogation agreements, which presupposes the existence of signatures from both parties at large, namely the captain or an authorized agent on the one side, and the shipper or the recipient of goods on the other side. Finally, it concluded that the choice of forum included in the bill of lading was null and void because it wasn’t signed from both parties. The court underlined that the subsequent signature by the recipient (i.e. when the bill of lading was endorsed) took place only with the purpose of completing the transfer of the bill’s rights in personam and in rem, and does not include any agreement or consent as to the prorogation clause. It went then further, stating that the jurisdiction agreement was not concluded in a form, which accords with a usage of which the buyer was or ought to have been aware. Finally, the court found that no continuous commercial links between the parties were proven, and rejected the respective argument by the appellees.

By reading this ruling, two are the main conclusions to be drawn from: First, the Thessaloniki Appeal Court applied the Brussels Regulation despite the clear wording of Art. 23.1, which excludes control over prorogation agreements in favor of a court or courts of non - member states from its ambit. This is not the first time Greek courts are opting for this approach, and it happens even after the ECJ ruling in the Coreck case. Additionally, the facts of the case give no rise for supporting a potential violation of the so-called protective jurisdictional bases (Art. 13, 17 & 21 Brussels I Regulation), which would be reason enough to bring back the Regulation into play [see in detail Rauscher/Mankowski, EuZPR/EuIPR (2011), Art. 23, Nr. 3a, επ., 532 επ., (Magnus)/Mankowski, Brussels I Regulation (2012), Art. 23, Nr. 37, 458].

Secondly, this decision echoes well-established jurisprudence, founded in a 1994 Supreme Court ruling, and followed with minimal exceptions ever since, one of which was the quashed ruling of the Thessaloniki 1st instance court. Regrettably, courts are making no distinction in terms of applicable law, i.e. whether the case should be tried according to Art. 23 Brussels Regulation or domestic choice of forum rules (Art. 42-43 CCivP). Hence, failure of the seller to produce a bill of lading bearing both signatures leads to its nullity concerning the prorogation clause, and regardless whether the case falls into the scope of the Regulation or not. This runs contrary to the prevailing opinion of legal doctrine on the application of Art. 23 Brussels Regulation in Greece and abroad [see for instance (Magnus)/Mankowski, Brussels I Regulation (2012), Art. 23, Nr. 138, p. 499 et seq., Reithmann/Martiny/Hausmann, Internationales Vertragsrecht, 7. Auflage (2010), p. 1993 et seq., Nr. 6464, note 2, Rauscher/Mankowski, EuZPR/EuIPR (2011), Art. 23, Nr. 54a, 585 επ., Staehelin, Gerichtsstandsvereinbarungen im internationalen Handelsverkehr Europas: Form und Willenseinigung nach Art. 17 EuGVÜ/LugÜ (1994), p. 89 et seq].