February 2024

Judgment of the Athens Court of First Instance annulling an order for payment of the amount due to the Special Purpose Vehicle (Fund)

Decision No 1088/2024 of the Athens Court of First Instance has been published, upholding our client's appeal and annulling a payment order issued at the request of a servicer under a Swiss franc mortgage loan agreement. Specifically, the court held that the amount of the claim in favour of the foreign special purpose vehicle (fund) was inadmissibly awarded, because the servicer may, under Law no. 4354/2015 (and already under Law 5072/2023), the servicer could only request payment of the claim to himself and not to the fund whose claims he manages.

In particular, the decision accepted that "However, the contested payment order improperly assigned the claimed amount to the aforementioned foreign special purpose vehicle, since, as stated in the above legal reasoning, in the case where the credit institution's claim is transferred to a Loan and Credit Claims Acquisition Company , the latter must, as a mandatory condition for the validity of the transfer of the claim in general, must have entrusted the management thereof in advance to a Loan and Credit Receivables Management Company under the conditions set out in Article 1(1)(a) (ii) 1 f. 4354/2015, as in the present case, where that foreign special purpose vehicle has entrusted the management of the claims acquired by [... ] bank to the defendant, the legitimacy of the NADP for the judicial pursuit of the claim is, by express legislative provision, exclusive and the latter must demand payment of the claim due to the same, by analogy with what is accepted on the occasion of the authorization for collection, where the authorized party does not acquire the claim, which remains the authorizer, but is merely entitled to pursue it (e.g. to collect it) in his own name, but on behalf of the authorising party. Consequently, the contested order for payment should have awarded the above amount to the defendant as administrator of the claim and not to the beneficiary foreign special purpose vehicle [...]".

As we have already mentioned: "A first issue concerns the beneficiary of the collection of the debt being contested in court. In simple terms, when the Servicer claims in court for the collection of any amount, should it seek payment to the Servicer, who is merely administering it, or to the fund that has purchased the receivable? In principle, it is argued that if the Servicer is recognised as having the power to conduct the litigation on behalf of the Fund, it also has the power to demand payment of the claim to itself. So if the debtor wants to stop the auction, for example, he should pay his debt to the Servicer and not to the Fund. Similarly, in the cheque for payment that precedes the attachment, the debtor should be ordered to pay the Servicer and not the Fund. This issue is of course of great practical importance, since if payment is requested to an unauthorised person, any act of enforcement may be considered null and void."

(for more see here)