December 2025
G. Kefalas - The annulment of a bank/Servicer payment order following an opposition by a borrower - upd
George Kefalas, LL.M. (mult.), Μ.Sc.
Legal Insight
October 2021 - upd December 2025
George Kefalas, LL.M. (mult.), Μ.Sc.
Summary: In view of the entry into force on 1 January 2026 of the amendments to the payment order regime introduced by Law 5221/2025, the issue of whether—and how—a payment order may be set aside following an opposition (application to annul) lodged by the debtor is more topical than ever. Under the new framework, jurisdiction to issue a payment order is transferred to lawyers, a change expected to accelerate issuance, while, at the same time, grounds attacking the validity of the payment order will no longer be capable of being raised at the later enforcement stage. These developments, in turn, require debtors to react faster, so as not to forfeit their procedural rights.
1. Introduction
Through the changes introduced by Law 5221/2025 to the payment order regime—most notably the transfer of the power to issue payment orders from the court to lawyers—a reduction in issuance time is anticipated (and expected). At the same time, key changes include the following:
Grounds challenging the validity of a payment order can no longer be raised in the subsequent enforcement proceedings, pursuant to the new Article 933(4) of the Greek Code of Civil Procedure (CCP).
If no opposition is lodged in time after the first service of the payment order (or if the opposition filed is dismissed on a formal/procedural ground), the debtor may, even before a second service of the payment order, file the opposition under Article 633 CCP seeking its annulment. Until now, in order to have standing to file an Article 633 CCP opposition, the debtor had to await re-service of the payment order.
Even in that latter scenario (i.e., an Article 633 CCP opposition after second service of the payment order), the debtor may now also request a stay/suspension of the enforceability of the payment order.
Precisely because of the speed of the process and the element of surprise for the debtor—who has not had the opportunity to present a defence—payment orders depend on strict prerequisites, foremost among them that the claim and the amount due must be evidenced by a public or private document having evidentiary force under the law. Accordingly, when defending against a payment order, the debtor may, in addition to substantive grounds disputing the creditor’s claim (typically a bank or servicer), raise a wide range of formal/procedural defects capable of leading to annulment of the payment order. In this article we examine defects frequently encountered in payment orders sought by banks or loan servicers which, if invoked by the debtor, may lead to their annulment.
2. Grounds for annulment of a payment order
Under Article 623 CCP, a payment order may be issued provided, among other conditions, that the claim and the amount due are evidenced by a public or private document. As a rule, the “document” required is the original, i.e., the document bearing the debtor’s handwritten signature (in the present context). However, under Article 449(2) CCP, photocopies or photographs of documents have evidentiary force equal to the original, provided their accuracy is certified by a person legally competent to issue copies. Therefore, the claim and the amount due must be proven by a document submitted either in original or as a certified copy. If the creditor submits a document (e.g., the initial loan agreement) merely as an uncertified copy, the payment order is annulled following an opposition, due to lack of written proof of the claim.
Notably, Article 449(3) CCP further sets out the conditions under which an accurate copy derived from accurate or digitised electronic copies has evidentiary force.
B. Absence, in the credit/loan agreement, of a procedural agreement on the evidentiary value of extracts from the loan account statements
To facilitate proof of banks’ claims, the vast majority of banking agreements contain a clause providing that the bank’s claim and its amount are proven by an extract from the bank’s commercial books showing the movement of the loan account. Such a clause typically provides, in substance, that an extract produced from the bank’s books (or a copy thereof) showing the relevant account(s) and the outstanding balance shall constitute full proof of the bank’s claim against the debtor, subject to rebuttal evidence.
If, however, such a clause is not included in the loan agreement and the bank, for purposes of issuing a payment order, submits an extract from its commercial books showing account activity, the payment order may be annulled following an opposition, due to lack of written proof.
A characteristic example is Athens Court of First Instance (Single-Member) decision 1869/2023, which held, in essence, that although the application for issuance referred to the relevant terms, it did not show that the parties agreed that the amount due would be proven by an extract from the bank’s commercial books; moreover, the contract itself did not include a procedural agreement elevating such extracts to admissible proof in favour of the bank; consequently, the submitted extracts lacked evidentiary force vis-à-vis third parties and the requirement of written proof for issuing a payment order was not satisfied.
C. Submission of monthly balance information notices instead of an extract from the bank’s commercial books
As noted above, an extract from the bank’s commercial books may be agreed to constitute full proof of the existence and amount of the claim. In practice, however, banks/servicers often submit, instead of such an extract, the monthly letters sent to the debtor for balance information. In these cases, the payment order may be annulled following an opposition.
Thus, Athens Court of First Instance decision 1052/2019 held, in substance, that the monthly statements submitted did not constitute extracts from commercial books and, therefore, the claim awarded by the payment order was not evidenced by documents having statutory or contractual evidentiary force; accordingly, due to lack of written proof, the payment order was voidable.
D. Failure to submit a complete extract from the bank’s commercial books
Very often, even where the relevant procedural clause exists and banks do submit an extract from their commercial books, that extract does not show the loan account movement from disbursement to termination/acceleration. Case law requires that the extract reflect all debits and credits arising under the loan; otherwise, the payment order is voidable.
Accordingly, in decision 1869/2023 the Athens Single-Member Court of First Instance held, in substance, that the extract presented did not contain account movement for the entire period from execution of the loan agreement until its closure, but only for a limited range of dates; as a result, the requirement of written proof for issuance of the payment order was not fulfilled.
Ε. Failure to prove assignment of the claim from the bank to an SPV, or entrustment of management to a servicer (where the application was filed by the servicer)
Frequently, the application for issuance of a payment order is filed not by the bank but by a loan servicer, following assignment of the claim by the bank to a special purpose vehicle (SPV) or to a loans-and-credit claims acquisition company. In these cases, the servicer often submits, as evidence of the assignment, the summary of the assignment agreement as registered in the public books of the Athens Pledge Registry (Ennechyrofylakeio)—typically a short 3–4 page document reflecting only limited terms of the transfer.
Certain courts have held, on a case-by-case basis, that in such circumstances a payment order is annulled where important terms of the assignment agreement do not follow from the summary—such as, for example, the purchase price/consideration.
As held in Heraklion Single-Member Court of First Instance decision 825/2025, where the registered summary did not state the purchase price but merely referred to the underlying agreement, and the full agreement was not produced, the registration was not lawful; since lawful registration is treated by statute as a condition for effectiveness and also operates as notice to the debtor, the absence of the purchase price (treated as an essential element under the relevant regulatory framework) rendered the transfer incomplete and ineffective vis-à-vis the opposing debtors.
Moreover, as an annulment ground related to the management agreement, debtors often argue that the submitted summary of the management agreement omits essential statutory elements (e.g., the stage of non-performance of the claim, cf. Athens CFI 769/2024) or that the summary does not demonstrate that the specific claim covered by the payment order falls within the portfolio entrusted to the particular servicer (e.g., Athens Court of Appeal 25/2023).
F. Failure to submit all assignment agreements or management-entrustment instruments
In many cases, the original assignment from the bank to the fund, or the original management entrustment to the servicer, is followed by further amendments/supplementary deeds. Under case law, the entire chain of such instruments must be produced, so that it is clear the applicant for issuance of the payment order is indeed the person with active standing to seek it.
In this vein, Boeotia Single-Member Court of First Instance decision 27/2025 held, in substance, that where amending/supplementary deeds were not produced (nor their relevant annexes showing continued entitlement), the active standing of the respondent was placed in doubt, because the debtor could not know the content of those amendments, which the court considered part of the legitimating documentation required for proving succession and, consequently, active standing.
G. The termination notice is not signed by a person authorised to represent the bank/servicer
A prerequisite for issuance of a payment order based on a running account (allilochreos)—and also for amortising loans where the payment order is sought before contractual maturity—is termination/acceleration of the agreement and production of the termination notice to the issuing authority. As an act of the legal entity (bank/servicer), termination must, in principle, emanate from persons who lawfully represent the entity (typically its board) or persons duly authorised.
In many cases, however, termination is executed not by the board but by ordinary employees or by a lawyer, without production of an authorisation instrument granting the requisite power.
In Athens Single-Member Court of First Instance decision 518/2024, the court held, in substance, that the issuing judge did not set out how the employees were authorised to terminate the loan, nor whether the lawyer empowered under the notarial power of attorney had given a specific mandate to those employees; thus, termination was invalid, no acceleration occurred, and the entire unpaid balance did not become due and payable (with references to further appellate and first-instance case law).
H. Defective service of the payment order and automatic lapse after expiry of two months from issuance
Under Article 630A CCP, the payment order must be served on the person against whom it is directed within two (2) months from issuance; if service is not effected within that period, the payment order automatically ceases to be valid. Accordingly, within two months from issuance, the payment order must be served—and served validly—on the debtor. If service does not occur within the two-month period, or if service occurs but is invalid (e.g., service at an address later shown not to be the debtor’s residence), then, upon opposition, the court declares the payment order ineffective.
By way of example, Kavala Single-Member Court of First Instance decision 311/2025 held that service at an address that was not the debtors’ actual residence was tantamount to a complete lack of service; since no other valid service occurred within two months from issuance, the payment order lost its force as an enforceable title, rendering the ensuing enforcement proceedings void.
Ι. Invalidity of the payment order due to invalid termination of the credit agreement as a result of abusive conduct by the bank
Banks, as financial institutions with a significant role in the national economy, are subject to enhanced duties of care toward borrowers. Especially after the adoption of the Banking Code of Conduct (KDT), a structured set of rules has been established governing banks’ conduct—by stages—when a borrower experiences repayment difficulties. In such cases, banks or servicers must act responsibly and, in compliance with the KDT, negotiate in good faith to reach a restructuring solution, rather than immediately terminate/accelerate the credit agreement—particularly where the borrower demonstrates a genuine willingness to negotiate.
Under the KDT, after assessing the borrower’s financial information, they must submit a restructuring proposal which must not be merely pretextual, and the borrower has an express right to submit a counterproposal. If, disregarding these requirements, the bank/servicer proceeds directly to termination and litigation measures, termination may be found abusive, thereby rendering the termination invalid and, in consequence, invalidating any ensuing payment order.
J. Invalidity of the payment order due to abusive filing of the application for its issuance
In line with the above, filing an application for issuance of a payment order while negotiations with the borrower are ongoing may be found abusive and lead to invalidity of the payment order. A characteristic example is Athens Single-Member Court of First Instance decision 5095/2019, which accepted, in substance, that although a settlement process had begun, the creditor filed an application for a payment order (an aggressive litigious act) against parties with whom it was negotiating, while continuing—days later—to request information by email, up to the issuance of the payment order.
In the same context, an additional indication of abusiveness may be the pendency of an out-of-court settlement mechanism procedure at the time of filing the payment-order application, especially where the delay in completion is due to dilatory conduct by the bank/servicer. On this point, there is already extensive case law in the field of enforcement (e.g., Thessaloniki Single-Member Court of First Instance decisions 45166/2025 and 10589/2024).
K. Invalidity of the payment order vis-à-vis the guarantor due to discharge of the guarantee following novation/renewal of the loan agreement
In many cases, after the initial credit/loan agreement, addenda are executed introducing very substantial changes, e.g., changing the currency of the credit or converting repayment from a running account structure to an amortising loan. Case law accepts that such changes may so materially alter the obligational relationship that, in substance, a new contract arises. This is treated as novation/renewal of the obligation under Article 436 of the Greek Civil Code, resulting in extinction of the old obligation and creation of a new one; novation also extinguishes any securities granted under the initial obligation (e.g., guarantee, pre-notation of mortgage, etc.). If, therefore, the guarantor does not sign the addendum, the guarantor no longer bears liability, because liability under the initial agreement has been extinguished.
A characteristic case is Athens Court of Appeal decision 1008/2016 (involving a currency change following an addendum), which held, in substance, that introducing foreign-currency operation was not a mere addendum increasing the credit amount; rather, it constituted a different and essential change, given exchange-rate volatility and the associated unforeseeable risks.
L. Invalidity of the payment order due to invalid transfer of a claim arising from a running account before termination of the agreement and closure of the account
As we have analysed in an earlier article, the transfer of claims incorporated in a running account (allilochreos) is invalid where it occurs before termination of the credit agreement and closure of the account (see here). In such cases, the servicer entrusted with management of the claim has no right—due to invalidity of the assignment agreement and, consequently, of the management agreement—to file an application for issuance of a payment order.
As noted in the introduction, the amendments to the payment order regime introduced by Law 5221/2025, which enter into force on 1 January 2026, require faster reflexes from debtors. In particular, the new prohibition against raising validity-based objections to the payment order at the subsequent enforcement stage makes the litigation stage aimed at setting aside the payment order even more critical than in the past. Accordingly, the debtor must react promptly by lodging the appropriate remedies, in order to prevent enforcement proceedings against their assets.
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