The Greek Supreme Court of Cassation (Areios Pagos) rendered a very important decision at the end of June, which is giving the final blow to a period of procedural insanity. A provision in force since the 1^st of January 2016 is forcing claimants to serve the document instituting proceedings abroad within 60 days following filing. Failure to abide by the rule results to the deletion of the claim as non-existent. As a consequence, the claimant is obliged to file a new claim, most probably being confronted with the same problem.

[Supreme Court of Cassation (Areios Pagos) nr. 1182/2022, available here.

Facts and judgment in first instance

The dispute concerns two actions filed on 31.01.2017 and 31.03.2017 against defendants living in Monaco and Cyprus respectively. The claimant served copies of the action by using the main channels provided for by the 1965 Hague Service Convention (for Monaco; entry into force: 1-XI-2007) and the Service of Process Regulation nr. 1393/2007. Service to the defendant in Monaco was effected on 08.05.2017, whereas service to the defendant in Cyprus on 19.06.2017. Both actions were dismissed as non-existent (a verbatim translation would be: non-filed) due to the belated service to the countries of destination [Thessaloniki Court of 1^st Instance 2013/2019, unreported]. The claimant filed a second (final) appeal, challenging the judgment’s findings.

The overall picture before the decision of the Supreme Court

So far, the vast majority of Greek courts was following the rule in exactly the same fashion as the first instance court. Article 215 Para 2 of the Greek Code of Civil Procedure reads as follows: … the claim is served to the defendant within a term of 30 days after filing; if the defendant resides abroad or is of unknown residence, the claim is served within 60 days after filing. The rule applies exclusively to ordinary proceedings, i.e., mostly civil and commercial matters, with the exception of some pertinent disputes, which are regulated under a special Book of the Code of Civil Procedure [Book 4, Articles 591-465: Special Proceedings]

A countless number of motions were dismissed as a result of this rule since 2016. Courts were refusing claims even when the defendants were appearing before the court, submitting pleadings and raising their defense. Only claims addressed to defendants living in countries which are neither EU member states nor Hague Convention signatories, are ‘saved’. Article 134, in connection with Article 136 Greek of Code of Civil Procedure has established half a century ago the notorious system of fictitious service, akin to the French system of remis au parquet (Article 683 Code de Procédure Civile). This system still applies for countries such as the United Arab Emirates or Madagascar, however not for Cyprus or Monaco, due to the prevalence of the EU Regulation and the Hague Convention, anchored in the Constitution (Article 28). Hence, the non- production of a service certificate is no obstacle for the former, whereas any service certificate dated after the 60 days term is not considered good service for the latter, leading to the dismissal of the claim.

The decision of the Supreme Court

Against this background, the Supreme Court was called to address the matter for the first time after nearly six years since the introduction of the new provision.

The Supreme Court began with an extensive analysis of the law in force (Article 134 Code of Civil Procedure; EU Service Regulation; Hague Service Convention, and Article 215 Para 2 Code of Civil Procedure). It then pointed out the repercussions of the latter rule in the system of cross-border service, and interpreted the provision in a fashion persistently suggested by legal scholarship: The 60 days term should be related with the notification of the claim to the Transmitting Authority, i.e., the competent Prosecutor’s office pursuant to Article 134 Code of Civil Procedure and the declarations of the Hellenic Republic in regards to the EU Service Regulation and the Hague Service Convention.

The date of actual service should be disconnected from the system initiated by Article 215 Para 2 Code of Civil Procedure. The Supreme Court provided an abundance of arguments towards this direction, which may be summarized as follows: Violation of Article 9 Para 2 Service Regulation 1393/2007 (meanwhile Article 13 Para 2 Service Regulation 2020/1784); contradiction with the spirit of Article 15 of the Hague Service Convention, despite the lack of a provision similar to the one featured in the EU Regulation; violation of the right to judicial protection of the claimant, enshrined in the Greek Constitution under Article 20; violation of Article 6 (1) of the European Convention of Human Rights, because it burdens the claimant with the completion of a task which goes beyond her/his sphere of influence.

For all reasons above, the Supreme Court overturned the findings of the Thessaloniki 1^st Instance court, and considered that service to the defendants in Monaco and Cyprus was good and in line with the pertinent provisions aforementioned.

The takeaways and the return to normality

The judgment of the Supreme Court has been expected with much anticipation. It comes to the rescue of the claimants, who were unjustly burdened with an obligation which was and still is not under their controlling powers. The judgment returns us back to the days before the infamous provision of Article 215 Para 2, where the domestic procedural system was impeccably finetuned with the EU Regulation and the Hague Service Convention.

Carlos Santaló Goris, Researcher at the Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law and Ph.D. candidate at the University of Luxembourg, offers an analysis of some aspects of a judgment concerning the EAPO Regulation rendered by the District Court of Žilina (Okresný súd Žilina), Slovakia.

Can insolvency practitioners apply for a European Account Preservation Order (“EAPO”) against insolvent debtors to freeze their bank accounts? The District Court of Žilina (Okresný súd Žilina) in Slovakia confronted this issue in an EAPO application it received on January 2022. The EAPO Regulation expressly excludes the use of the EAPO Regulation for “claims against a debtor in relation to whom bankruptcy proceedings, proceedings for the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions, or analogous proceedings have been opened” (Art. 2(2)(c) EAPO Regulation). This is the same exclusion that can be found in Art. 1(2)(b) the Brussels I bis Regulation. Recital 8 of the EAPO Regulation reiterates that the Regulation “should not apply to claims against a debtor in insolvency proceedings” remarking that the EAPO “can be issued against the debtor once insolvency proceedings as defined in Council Regulation (EC) No 1346/2000 (now Regulation No 2015/848)”. At the same time, Recital 18 states that that exclusion should not prevent the use of an EAPO “to secure the recovery of detrimental payments made by such a debtor to third parties”.

In the instant Slovakian case, an insolvency practitioner requested an EAPO application against an insolvent debtor. The objective was to integrate the funds recovered through the EAPO into the insolvency estate. The insolvency practitioner applied for the EAPO once no assets were found in Slovakia. The EAPO application included a request to investigate the debtors’ bank accounts in Austria. One of the creditors suspected the debtor “had misappropriated funds and stashed them in offshore accounts”. The District Court of Žilina (Okresný súd Žilina) considered that, since the EAPO was requested against the debtor, such a request fell within the insolvency exclusion. Thus, the EAPO Regulation was not applicable. This court embraced the most literal sense of the insolvency exclusion. However, from a teleological perspective, the insolvency exclusion aims at preventing individual creditors from using the EAPO to undermine an insolvency estate during bankruptcy proceedings. In this case, the EAPO was used in favour of the insolvency estate. Had the EAPO been successful, it would have served to increase it.

The present case serves as an example to show that the boundaries of the EAPO insolvency exclusion are blurred. Perhaps, in the future, a similar case might reach the CJEU and help cast further light on the EAPO’s insolvency exclusion.