GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Daphne Kasimati, Afroditi Kazani and Ioanna Exarchou, Machas & Partners
6. Enforcement 6.1 Enforcement of Collateral by Secured Lenders In principle, enforcement of security interests typically necessitates judicial proceedings. For most forms of collateral – such as mortgages, pledges, and non-pos- sessory pledges – creditors must obtain an enforce- able title (eg, a court judgment or payment order) and proceed with enforcement through court-supervised mechanisms, such as public auctions. The process entails strict steps and procedural requirements. Self-help remedies, where a creditor unilaterally enforces a security interest without court involve- ment, are generally not permitted in Greece, but are now available in Greece following the enactment of Law 5123/2024. In particular, the creditor may now collect the pledged claim without any further require- ment after the lapse of a 10-day grace period once the secured claim becomes due and payable in whole or in part. In case the pledged claim becomes due before the secured claim, the provisions of the Greek Civil Code apply. The purpose of such a provision seems to be streamlining the enforcement process by aligning the interests of the pledgees and the pledgors. For security interests established under the Legislative Decree 17.7/13.8.1923, for the benefit of credit institu- tions, enforcement is more streamlined; No enforce- able title is required, while secured creditors may publish a notice for the public auction of the pledged assets immediately, bypassing the three-day period that applies in standard enforcement procedure. The most expedited and straightforward enforcement process is set out for the realisation of security in the form of financial collateral. Aside from not requiring an enforcement title or the three-day waiting period, the financial collateral can be sold directly by the creditor, or the creditor may acquire ownership of the collateral and set off its value against the financial obligations owed by the debtor. Regarding guarantees, enforcement typically involves initiating judicial action against the guarantor to obtain a court judgment. Under civil law, guarantors may raise specific defences, such as the benefit of discussion.
However, in commercial contexts, guarantors often waive these defences in the guarantee agreement. 6.2 Foreign Law and Jurisdiction In Greece, the choice of foreign law is generally valid and enforceable in accordance with Regulation (EC) No 593/2008 (Rome I). This framework allows the contracting parties broad autonomy to select the law applicable to their contract. However, this freedom is subject to certain limitations. Greek courts may refuse to apply a foreign law where such application would be manifestly incompatible with Greek public policy (ordre public), as provided under civil law. Public policy encompasses mandatory rules that cannot be derogated from by private agree- ment (ius cogens). Furthermore, pursuant to Article 33 of the Greek Civil Code, a provision of foreign law will not be applied if the effects it produces are contrary to a mandatory rule of the forum. In addition, overriding mandatory provisions of Greek law (rules of immediate application) may apply irre- spective of the parties’ choice of law, particularly in areas involving tax, customs and administrative issues. With respect to submission to jurisdiction clauses, these are generally enforceable under Greek law. However, unilateral jurisdiction clauses – such as jurisdiction rules on exclusive competence (eg, in proceedings that concern rights in rem in immovable property, a Greek court may decline to respect the choice of a foreign jurisdiction) or clauses granting the right to sue exclusively to one party (eg, “only the bank may bring proceedings before a court of its choice”, or clauses in contracts with national authori- ties) – may be scrutinised by Greek (and EU) courts. If such a clause creates a significant imbalance between the parties, especially where one party is in a weaker bargaining position (such as a consumer or a small business), it may be deemed invalid. Waivers of immunity can be upheld under Greek law, provided the entity waiving immunity has the capacity to do so. State-owned entities or sovereign borrow- ers may be subject to different rules depending on whether Greek or EU laws restrict their ability to waive
193 CHAMBERS.COM
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