November 2025

Decision of the Multi-Member Court of First Instance of Athens on the Recognition of the Validity of Share Transfer

The decision No 2480/2025 of the Multi‑Member Court of First Instance of Athens (regular procedure) was issued, by which the validity of a private share‑transfer agreement in a two‑member family Joint‑Stock Company (S.A.) was upheld in favour of our client, a Single‑Member Private Capital Company (M.I.K.E.), from its grantor — the sister of the plaintiff and the other shareholder — while the plaintiff’s action was dismissed.

In particular, the said judgment held acceptable, among others, the following:

a) At the critical time of the transfer of the contested shares there existed decision No 752/2016 of the Single‑Member Court of First Instance of Athens, which had ordered the judicial escrow (“μεσεγγύηση”) of the contested shares. That decision remained unexecuted, because the judicial escrow procedure had not been completed. Specifically, no evidence was submitted showing that a bailiff had been instructed to proceed to the location where the shares under pledge were held, remove them and deliver them to the Deposits and Loans Fund, drafting the relevant escrow report. The court ruled that this absence is not remedied by the subsequent (nearly 21 months later) service of the decision by the plaintiff to the grantor of our client for his awareness and for legal consequences. Accordingly, at the relevant time of the share sale there was no prohibition on their disposal.

Specifically, in its operative passages the judgment states: “[…] the imposition of judicial escrow by virtue of a decision on a precautionary measure constitutes a composite procedural act, whose completion requires both the issuance of a judicial decision and the drafting of an escrow report by a judicial bailiff. Therefore, for the invocation of the consequences of judicial escrow, and in particular the prohibition of disposing the escrowed thing, the completion of the escrow (judicial) with drafting of the relevant bailiff’s report and service of a copy or extract thereof to the registry of the court of first instance where the thing is located is required. In the case under consideration, it was not proved, as the plaintiff did not submit relevant evidence, that an instruction was given for execution by a bailiff on a copy or extract of the decision No 752/2016 on precautionary measures, nor that a bailiff visited the place where the contested shares were located so as to remove them and deliver them to the Deposits and Loans Fund, drafting for the above the relevant escrow report […] In summary, pursuant to Articles 711 and 715 of the Code of Civil Procedure (ΚΠολΔ), as directly referred to by Article 727 ΚΠολΔ, for the judicial escrow of the disputed things (namely the shares of the aforementioned S.A.), a report should have been drafted, without which no judicial escrow can be deemed to exist, and the decision ordering it remains unexecuted. Moreover, the service of the said decision on precautionary measures by the plaintiff to […], which took place on […] (i.e., almost 21 months after its issuance), in order for him to become aware thereof and of the legal consequences (see bailiff’s service report No […]) does not remedy the aforementioned defect and in no way implies the execution of the said decision. Accordingly, since the imposition of judicial escrow was not completed, there was no legal encumbrance of the contested shares and no prohibition of their disposal at the critical time of their sale by […] to the first defendant herein. Consequently, at the contract of sale of the contested shares from […] to the first defendant herein, there was no prohibition of their disposal, and therefore the specific private agreement, as regards the transfer of the contested […] shares, is not void due to conflict with Articles 174, 175 and 176 Civil Code (ΑΚ), the related claim of the plaintiff being rejected as substantively unfounded […]”.

b) The contested shares had been acquired by the grantor of our client company by virtue of a parental gift from his mother. The sister of the grantor (and here plaintiff) had challenged the validity of that gift by filing an action. Our client company acquired the contested shares from the grantor, following the filing of the relevant action by the opponent, i.e., during the litigation. Subsequently, decision No 6993/2019 of the Three‑Member Court of Appeal of Athens was published, which finally held the validity of the parental gift of the contested shares from the mother of the grantor of our client company to the grantor. The trial court (Court of First Instance of Athens) held that it is bound by the res judicata of that final decision of the Court of Appeal with respect to the issue of ownership of the contested shares by the transferor at the time of their sale to our client company. Accordingly, it held the relevant purchase valid.

Specifically, the decision states: “[…] regarding the second claim of the plaintiff, namely that the private sale agreement of the contested shares dated […] is void, since the initial defendant […] was not their owner, having acquired them from a non‑owner, on the ground that at the time of the prior private agreement dated […] the donor mother of the plaintiff lacked legal capacity due to her health condition, the following is to be said […] the appellate court rejected the action of the plaintiff in its entirety. With the particular decision therefore, it was adjudicated with res judicata between the plaintiff and the initial defendant brother […] both the validity of the parental gift and transfer of the contested […] shares from the mother of the plaintiff to the […] and his ownership thereof. The above factual matters are covered by the res judicata of the aforementioned final decision, and cannot be contested anew by the present action of the plaintiff. It should be noted that by the res judicata of that decision, even the first defendant‑appealed herein is bound, as she acquired the contested shares from the […] during the pendency of the action filed on […] under Ref. No […]. Accordingly, the initial defendant […], following the aforementioned finally adjudicated valid contract of parental gift and transfer, became owner of the contested […] shares. Consequently, being their owner, he validly proceeded, thereafter, to the conclusion of the private sale agreement dated […] for the sale and transfer (which includes the contested shares) with the first defendant herein – single‑member I.K.E. […]”.