Decision No. 671/2025 of the Athens Multi-Member Court of First Instance has been published, recognizing the abusive invocation by a loan servicing company of a resolutory condition clause that provided for the automatic termination of the debt settlement agreement in case of payment delays, and affirming the continued validity of the agreed settlement.
Specifically, the debtors had entered into a debt settlement agreement with a credit institution (prior to the transfer of the claim and the assignment of management to a servicing company), under which a significant portion of the debt would be written off, provided that the settlement terms were duly fulfilled. The agreement included a clause stating: “In the event of a delay in fulfilling your obligations arising from this settlement proposal for a period exceeding thirty days from the respective due date of each installment as set out above, this agreement shall cease to be in force.”
However, the debtors paid several installments in 2020 and 2021 with delays exceeding the 30-day limit, yet the credit institution accepted these late payments without objection.
Nevertheless, in late 2022, the credit institution sent a letter to the debtors, reiterating a prior termination notice from 2013 and demanded full repayment of the outstanding debt within seven days—excluding any previously agreed write-off. When the debtors attempted to communicate with the creditor, confusion arose due to the transfer of the claim, making it unclear who the rightful creditor was. Eventually, the loan servicing company confirmed that, due to non-compliance with the agreement, it was now seeking full repayment of the debt.
The Court ruled that the servicing company's conduct was abusive, as it had tolerated delays in payment without notifying the debtors, thus reasonably leading them to believe that the 30-day timeframe was indicative rather than binding. Despite the sudden change in stance by the financial institutions, the debtors continued to make payments under the agreement, even depositing funds publicly at the Deposits and Loans Fund. Subsequently, the servicing company provided the debtors with an account number for direct deposit of the settlement payments.
This decision is particularly noteworthy as it addresses a more specific issue than the usual cases of abusive exercise of contract termination rights. Here, no formal termination notice was necessary due to the inclusion of a resolutory condition in the agreement—a common practice in settlement contracts. Nonetheless, even in such cases, it is possible to challenge the bank's abusive behavior, specifically the (abusive) invocation of the clause incorporating the resolutory condition.
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