Friday, 26 August 2016

No application of foreign law in Greek summary proceedings

A judgment rendered early this year by the Thessaloniki 1st Instance Court continues in the line followed by a series of earlier decisions, which apply domestic law even when foreign law should have been applied, in accordance with the Rome II Regulation 
[Thessaloniki 1st Instance Court Nr. 126/2016, published in the data base ISOCRATES (Athens Bar Association)].

THE FACTS: The applicant is a Romanian citizen, living in Craiova. He is a driver by profession, working in the field of transportation. The 1st defendant is also a citizen and resident of Romania, actually a colleague of the applicant. In the course of their occupation, they were ordered to load a quantity of fruits from Greece and return to Romania. The defendant was sitting on the wheel, while the applicant was in the third (back) seat. On their way back and within the administrative region of Thessaloniki, an accident occurred. The defendant lost control of the vehicle and crushed the track outside the highway. As a result, a third person within the track (sitting next to the driver) was killed, and the applicant was severely injured.
The applicant initiated summary proceedings against the driver (1st defendant), the owner of the vehicle, and the Motor Insurers’ Bureau (M.I.B.), which is a legal entity of private law based in Athens, supervised by the Bank of Greece. He requested damages for economic loss and additional expenses caused because of the accident. At the hearing, the applicant withdrew the proceedings with respect to the driver and the truck owner.

THE RULING: The Thessaloniki court assumed jurisdiction on the grounds of Article 3 in conjunction with Article 35 Greek Civil Procedure, i.e. the provisions granting international jurisdiction to the place where the harmful event occurred. It then examined the issue of applicable law. In this respect it referred to the Rome II Regulation, on the law applicable to non-contractual obligations. It first mentioned Article 4.1, by repeating its wording. Then it went forward, invoking Article 4.2 Rome II Regulation, which reads as follows: where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply. The court underlined that it has no discretionary powers as to its application, i.e. it is obliged to apply the above provision, unless it is satisfied that the escape clause of Art. 4.3 Rome II Regulation should prevail.
In light of the above, the Thessaloniki court concluded that by applying Art. 4.3, the case is more closely connected with Romania: Both the driver and the victim are Romanian citizens living in Romania; the vehicle is registered in Dolj county, Romania; and the green card was issued by Romanian authorities. Hence, Romanian law should be applied in the case at hand. However, due to the urgency of the matter, the court opted for the application of Greek law, because it was not aware of the pertinent provisions under Romanian law, nor it was possible for the court to become aware of it on short notice, i.e. without ordering the production of relevant evidence, thus delaying excessively the pending proceedings.
For the reasons stated above, the Thessaloniki court proceeded to the examination of the merits, applying fully and exclusively domestic law.

COMMENTS: Two points deserve some closer look in the decision of the court.
1.       Although the court was right in accepting its jurisdiction, its omission to refer to the provisions of the Brussels I bis Regulation leaves a bitter taste in regards to the preparedness of Greek courts to examine cases with cross border elements on the basis of the proper / applicable regime.
2.       On the other hand, the court was much more knowledgeable regarding the conflict of laws rules of Rome II Regulation. The analysis made by the court with respect to Article 4 was impeccable. What probably strikes the attention of the reader is rather the end-result, i.e. the application of Greek law for the reasons stated above. This is however a path followed almost religiously by Greek courts over the last decades. In most of the decisions reported, the courts include an additional argument, namely that the foreign law would presumably not deviate significantly from domestic legislation.
Legal scholarship supports almost unanimously this position. There are only some suggestions, that courts should exploit all available means and exhaust all possible sources of information, especially by making use of technological tools, in order to reach foreign law provisions applicable in the case under dispute.
A final remark on this point would go towards the direction of Article 14 Rome II Regulation. The court omitted to make reference to Art. 14.1 [freedom of choice by the parties]. It is not clear by the text of the judgment, whether the parties invoked Greek or Romanian law. Usually Greek lawyers tend to refer to the provisions of their jurisdiction, as most probably done by other colleagues around the globe. Hence, if no issue of applicable law was raised by the parties, the court could have easily apply directly domestic law, without passing through the thorny corridors of Article 4 Rome II Regulation.


Saturday, 13 August 2016

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

A judgment rendered last year by the Thessaloniki 1st 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.

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 1st 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 1st 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.

[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.


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].