August 2025

Decision of the Athens Single-Member Court of Appeal on the Validity of Property Acquisition by the Successful Bidder through Auction and Reversal of the First-Instance Judgment

Recently Published Judgment No. 4004/2025 of the Athens Single-Member Court of Appeal Regarding the Dismissal, at Second Instance, of the Debtor’s Objection against a Conducted Auction Allegedly Initiated Abusively.

Judgment No. 4004/2025 of the Athens Single-Member Court of Appeal was recently published, rendered upon appeal filed by the successful bidder against a first-instance decision which had annulled the conducted auction following an objection (ανακοπή) submitted by the debtor, invoking grounds of allegedly abusive initiation of enforcement proceedings.

In the case under review, the debtor had claimed at first instance that the enforcing creditor abusively initiated an auction of his property, despite allegedly having agreed to its voluntary sale. The first-instance court erroneously accepted this claim and annulled the auction, thereby causing serious harm to the successful bidder who had not only paid the auction price out of his own assets but also covered substantial additional costs (e.g., notarial fees and real estate transfer tax), as well as incurred expenses for the legalisation and renovation of the property.

Subsequently, the Athens Court of Appeal upheld our client’s appeal, fully adopted our arguments, and definitively rejected the debtor’s objection, overturning the first-instance judgment. Specifically, the appellate court held that, although a suspension of the auction may indeed be lawfully agreed between the enforcing creditor and the debtor, such an agreement is only valid if properly notified to the auction officer. This requirement is justified by analogy with the procedural provisions governing court-ordered suspensions, given that the rules governing compulsory auctions are of public order in nature. These rules are designed not only to protect the creditor and the debtor but also the successful bidder, who is typically the party most adversely affected by the annulment of an auction.Furthermore, the Court of Appeal aligned with the prevailing case law in holding that a mere informal assurance from the creditor to the debtor regarding a potential consent to suspend or cancel the auction – given without formalisation, without the knowledge of the auction officer and without any communication to the successful bidder – cannot in any way result in the invalidity of the auction. (See here).

In the present case, it was not proven:

(a) That either the auction officer or our client – the successful bidder – had any knowledge of the existence of such an agreement or promise by the enforcing creditor regarding the cancellation or suspension of the auction; and

(b) that the enforcing creditor had provided any definitive consent to such cancellation or voluntary sale. On the contrary, it was proven that the creditor merely expressed a conditional intention to consent, contingent upon the fulfilment of specific requirements, which the debtor ultimately failed to meet. In any case, neither the auction officer nor the successful bidder were informed of such intention.

Key excerpts from Judgment No. 4004/2025 read as follows: “From the combined interpretation of Articles 361 of the Civil Code and 1019 para. 2 of the Code of Civil Procedure, and in view of the autonomy of private will, it follows that the suspension of an auction may lawfully result from an agreement between the enforcing creditor and the debtor. However, for such agreement to be valid [...] it must, by analogy and due to the similarity of legislative rationale with the provisions governing court-ordered suspensions, be notified – on the parties’ own initiative – to the auction officer, failing which the auction is deemed to have been irregularly conducted (see Supreme Court Plenary Decision No. 33/1995, SC 2069/2007, NOMOS legal database).The rules governing auctions are generally of public order and aim to provide legal protection through compulsory enforcement, taking into account the interests of the creditors (who remain unpaid), the debtor (whose property is being auctioned), and the successful bidder, who participates in the process primarily for his own interest, but also indirectly for the benefit of the creditors. A mere assurance by the enforcing creditor to the debtor that they would consent to the suspension or cancellation of the auction – an assurance not formalised and given without the knowledge of the auction officer or any other creditors who may have declared their claims – cannot justify the annulment of the auction. This is especially true where there is no assertion or finding by the trial court that the successful bidder, who suffers the main financial loss in such annulments, had any knowledge of the events prior to the auction. The entire compulsory enforcement procedure involves a dynamic interaction among multiple parties, which does not necessarily include only the initial creditor and debtor, and its effectiveness cannot leave untouched the substantive legal relationships of the persons involved. Accordingly, the ground of objection based on Article 281 of the Civil Code (abuse of rights) is rejected as unfounded on the merits. In particular [...] it was not proven that the successful bidder – who is primarily harmed by the annulment of the auction – had any prior knowledge, before the auction, of the conduct of the enforcing creditor or any developments between the creditor and the debtor. Nor had she been made aware, prior to the auction, of any assurance or promise by the creditor that she would consent to its suspension in light of the debtor's intended voluntary sale. No such agreement was notified to the auction officer either…”