Friday, 3 June 2016

First judgment on the application of Brussels I bis Regulation in Greece

Nearly 18 months after the entry into force of Regulation 1215/2012, and following few decisions rendered in the course of summary proceedings, the Thessaloniki 1st Instance Court published early March the first judgment on the application of the Brussels I bis Regulation in ordinary proceedings.

The facts: On February 2014, the claimant, a resident of Thessaloniki, Greece, acting as a funds administrator on behalf of a foreign investor, ordered the transaction of 14 million Euros to an account of a UK credit institution, located in London, which the claimant opened online. The parties agreed that the Bank would hand over a username and the password to a proxy of the claimant, who would travel to London specifically for that purpose. Upon return of the proxy to Thessaloniki, the claimant activated his account, and requested the transfer of 13,8 million € to an account he owned in a Bulgarian Bank. The web banking system of the UK credit institution certified the transaction; however, the above amount was not transferred to the Bulgarian account, but it was still visible in the UK account. He then unsuccessfully attempted to complete the same transaction a number of times from March to July 2014. Three months later the claimant tried again; this time however the web banking system did not allow the transaction at all. Following the above, the claimant notified the respondent, that the deposit should be transferred within 5 days to the Bulgarian account, or a check be issued and sent to him. The respondent replied in written that the transfer order was completed, however the amount has not been credited to the Bulgarian account of the claimant.  

In light of this bizarre situation, the claimant filed before the Thessaloniki 1st Instance court an action for damages against the UK Bank, considering that the written reply of the respondent constitutes an acknowledgment of debt. The defendant was duly ant timely served, however it did not appear in the hearing.

 The ruling: The court declined its international jurisdiction on the basis of the following grounds:

a.      Art. 7.1 (a) Brussels I bis Reg. is not to be applied, because the place of performance of the obligation in question was London, UK, i.e. where the defendant exercises its professional activities, namely where the deposit is kept safe. The fact that the claimant is able to conclude transactions from Greece through web banking channels is irrelevant for establishing international jurisdiction in favor of Thessaloniki courts. Equally irrelevant is the fact that the defendant has given access codes to the claimant’s proxy, so that he can complete transactions from Thessaloniki.

b.      Article 18 Brussels I bis Reg. is not to be applied, because the conditions of Article 17 are not met. The court made special reference to Art. 17.1 (c), stating that no proof has been provided by the claimant, that the defendant “pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities”.

Comments: Solely by applying the new Brussels I Regulation for the first time in Greece, this judgment gains importance almost axiomatically. The result of the ruling is the correct one; nevertheless, the findings of the court on the second ground emanate from the assumption that the claimant is a consumer, which does not seem to be the case. Before scrutinizing the conditions set under Articles 17 et seq. Brussels I bis Reg., the court should have examined whether the claimant was allowed to invoke the provisions aforementioned. A number of facts stated in the ruling lead to the opposite conclusion:

a.      The claimant is managing investment funds of a third person, hence, he confesses that he is not the real owner of the deposit.

b.      The claimant is not inexperienced in the field; he states in his action that he was hired by a foreign investor to manage his funds.

c.       In light of the above, it is obvious that the claimant conducts a professional activity, i.e. the profession of a fund broker.

In addition to the above, no reference was made to a decision of the Greek Supreme Court from 2009, which ruled that the protective provisions of Section 4 of the Brussels I Regulation do not apply in leverage contracts, following a legal opinion prepared by Professor Nikas [see Supreme Court 1738/2009, and Nikas, Civil Procedure Law Review (Epitheorissi Politikis Dikonomias) 2010, pp. 506-528].