Decision of the Multi-Member Court of First Instance of Athens on the Invalidity of General Terms of a Credit Agreement with an Open (Mutual) Account - Law Firm Psarakis & Kefalas

The Multi-Member Court of First Instance of Athens recently issued Decision No. 2900/2025, accepting the arguments of the debtor company regarding the invalidity of specific contractual terms in a credit agreement with an open (mutual) account. The Court found invalid the clause providing for interest calculation based on a 360-day year, as well as the clause allowing the bank to unilaterally modify the interest rate margin.

Specifically, the initial credit agreement included the following term: “The Bank may modify the Margin if the factors determining it change, namely the financial condition of the borrower, the borrower’s transactional behaviour, the collateral offered, and the return from parallel transactions conducted through the Bank (upon the borrower’s request, the Bank shall provide a reasonable explanation and analysis of the above factors).”

The Court held that this clause constituted a General Term of Transactions (GTT), as it had been drafted in advance for use in an indeterminate number of future agreements. It further ruled that the clause was vague, since it did not set out specific, clear criteria governing the adjustment of the margin.

The decision states, inter alia: “[…] this makes the clause vague, since the reference to the borrower’s ‘financial condition, transactional behaviour, offered collateral, and the return from parallel transactions’ is insufficient for the clause’s clarification, as it is not specified by clearly defined criteria. As a result, the clause essentially reserves to the Bank the right to unilaterally modify the agreement with respect to the agreed floating interest rate, without a clear, specific, or clearly defined reason and without the possibility of determining it based on specific criteria set out in the contract.”

This judgment adds to a growing line of case law holding that, in credit agreements with floating interest rates, any clause governing the adjustment of such rates (both the base rate and the margin) must be predictable in advance for the borrower and may not grant the Bank a discretionary right to unilaterally modify the contractual interest rate. (See also Supreme Court Decision No. 168/2024.)

December 2025Decision of the Multi-Member Court of First Instance of Athens on the Invalidity of General Terms of a Credit Agreement with an Open (Mutual) Account

December 2025

Decision of the Multi-Member Court of First Instance of Athens on the Invalidity of General Terms of a Credit Agreement with an Open (Mutual) Account