* The present article is written by Ioannis A. Sarakinos, Attorney-at-law – LL.M in Banking Law & Financial Regulation from the London School of Economics & Political Science.
Athens, 3rd February 2016
Last Updated: 20th February 2016
Unquestionably, Greek economy faces one of its most problematic periods. This becomes obvious also in the field of commercial transactions. Great delays of payment of commercial debts are far more regular. These delays destabilize the market by gradually decreasing the necessary liquidity.
Greek law includes various provisions in order to combat late payments taking place in commercial transactions. For example, Greek Civil Code (GCC) and the Greek Code of Civil Procedure (GCCP) provide the legal consequences for overdue debtors as well as the procedure for the collection of the overdue commercial debt. Briefly, overdue debt (i.e. debt not paid at the agreed date) creates an obligation for the debtor to pay the commercial debt together with the statutory interest for late payment (Articles 335 et seq. of the GCC). The creditor can then claim both the commercial debt and the statutory interest for late payment either by issuing a payment order (Articles 623 et seq. GCCP) or by filing a claim or by issuing one of the enforcement titles provided within the Presidential Decree (P.D.) 166/2003 – which even though it has been abolished it is still applicable for commercial debts created before 09.05.2013.
However, for commercial debts created after 09.05.2013, the applicable legislative regime follows the aforementioned provisions of the GCC and the GCCP in conjunction with the provisions of the L. 4152/2013 implementing the EU Directive 7/2011/EC into the Greek legal system (hereinafter ‘the Law’). The introduction of the Law reflects the legislator’s effort to modernize procedures for the collection of late commercial debts and to create a climate for prompt payments in commercial transactions in general.
Law 4152/2013 has the following points of interests in combating late payment during commercial transactions:
- It applies to commercial debts occurred during commercial transactions between undertakings and between undertakings and public authorities.
- During commercial transactions between undertakings, the creditor is entitled to interest for late payment without the necessity of a reminder (i.e. notice to the debtor). Yet, the following conditions have to be previously satisfied: fulfillment of creditor’s contractual and legal obligations and nonpayment of the amount due on the agreed payment date. As expressly provided, the statutory deadline for payment may not exceed 60 days, unless it is has been agreed otherwise in the contract. If otherwise agreed, the relevant contractual term will be examined whether it can be considered as unfair under the Law. If the payment date is not expressly provided in the contract, the creditor is entitled to interest for late payment 30 calendar days following the day of receipt of the invoice by the debtor.
- During transactions between undertakings and public authorities, the creditor is entitled to interest for late payment without the necessity of a reminder (i.e. notice to the debtor). Once more, the following conditions have to be previously satisfied: fulfillment of creditor’s contractual and legal obligations and nonpayment of the amount on the agreed payment date. In this case, the statutory deadline for payment may not exceed 30 calendar days following the day of receipt of the invoice or if that day is uncertain, 30 calendar days following the day of receipt of the goods or services by the debtor. As opposed to commercial transactions between undertakings (explained above), the date of receipt of the invoice is not subject to the contractual agreement between the debtor and the creditor. Finally, in exceptional cases, the Law grants the possibility to extend the aforementioned period of 30 days to a maximum period of 60 days.
- Minimum fixed compensation of 40€ for recovery costs.
- Contractual terms for the payment of commercial transactions are examined as to whether they can be considered as unfair and practice (subparagraph Z8).
- Quicker recovery procedures for unchallenged claims. Specifically, claims or applications before the court in relation to unchallenged claims will be tried at the soonest trial date available, regardless of the amount of the commercial debt. The court’s decision on the claim or the application, which is an enforceable title, must me issued within 90 days from the date of its filing to the court.
- Debts subject to insolvency proceedings against the debtor, including proceedings for debts restructuring (Article 99 et seq. of the Greek Bankruptcy Code), do not fall within the scope of the Law.
Disclaimer: This article is not intended to provide legal advice on individual situations as the merits of each case differ. For specific advice on your case please contact us by email: email@example.com or tel.: +30 211 4106546.
© 2016 Ioannis A. Sarakinos. All Rights Reserved.