Newsletter April 2019 – Vol.17

CLAIM BEARING ΙNTEREST RATE AFTER SERVICING THE CLAIM – PAYMENT ORDER AND IT’S SCALING

The method of calculating the interest on a claim is provided by Article 346 of the Greek Civil Code, as revised under Law 4055/2012. On the basis of this, the debtor is obliged to pay legal interest (default interest) on the debts due to the lender having served a claim against him or to the execution of the order for payment of the debt arrears. The rate of litigious interest is two (2) percentage points higher than the default interest. This obligation exists irrespective of the default or fault of the debtor. Its prerequisite is that the nature of the claim is awarding, so as to oblige the debtor to pay the claim, and not just recognize the existence of a debt. Finally, as from the publication of the final decision awarding a financial debt with interest or rejecting an objection to the order for payment, the percentage of the interest-based interest is set out three (3) percentage points higher than the default interest. This surcharge does not apply unless a final decision is appealed against. With this more strict ruling, this new arrangement aims to put more pressure on the debtor to recognize the claim or to resolve the dispute out of court.

VESSEL DELIVERY: THE EGG or THE CHICKEN?

A usual “dispute” when delivery of a vessel is about to happen, is how the procedure will be triggered. The Sellers side, Owners and Bank, wish to see the sale funds in the Sellers account to discharge the mortgage and allow transfer to proceed. The Buyers side, understandably, wishes exactly the opposite: They wish to confirm that the vessel is free from encumbrances to release the purchase price and receive ownership.
It is obvious that none of the two can occur 100%, and that a compromise in the wills of the parties should take place. Further, it is obvious that a number of actions are expected, which, for the sake of good order, should be deemed to occur simultaneously, even if practically one presupposes the other. Such actions are a discharge of existing mortgage, transfer of purchase funds, deletion from the current registry and registration to the new one, recording of the new mortgage etc.
A possible compromise is that funds are sent in suspense mode at Buyers name in Sellers bank, along with irrevocable release instructions that they will be released upon release of free of encumbrances certificate. In such case, Sellers bank is at comfort to discharge the mortgage, knowing that they will receive purchase finds immediately thereafter, without the delay that could be experienced in case the funds are remitted at the time of discharge from another account through New York.

LIABILITY OF THE BOD MEMBERS ΙΝ Α S.A

The fresh law 4548/2018 (regarding Societes Anonymes) which applies as of 01.01.2019, amends -inter alia- the provision with respect to the liability of the members of the Board of Directors of a societe anonyme. Pursuant to the Explanatory Memorandum, with respect to the pertinent provision, the General Assembly of the Shareholders does not discharge the members of the Board of Directors of any liability. The General Assembly approves the overall management that has taken place, i.e. the corporate governance in general, during the respective financial year, and not each and every action or omission which may have caused damage to the company.
Hence, in the light of the fresh provisions, the liability of the members of the Board of Directors remains but in the proceedings for damages to the company, on account of the liability of the members, the approval of the overall management, if granted, shall be taken into account.

ATTORNEY’S DUTY IN CONFIDENTIALITY

Trust between attorneys and clients is of utmost importance while handling a case. The abstract meaning of trust is clarified in Attorneys’ Code (articles 5 and 38) and in the Code of Professional Conduct (article 36) as a duty of confidentiality. The duration of confidentiality is not certain, but the Attorneys’ Code provides that same should exist “during assignment and execution of mandate”, while the Code Of Professional Conduct expands same by providing that confidentiality is essential “not only during but also after termination or revocation of mandate, even following client’s death”. The starting point of confidentiality is not defined in the law, but it is obviously connected with the appointment. When an appointment starts to exist is also not clear. However, appointment includes the communications between client and lawyer before the conclusion of the appointment, even though it is argued that in criminal cases the same applies in a more narrow manner.

THE DECLARATION OF ARTICLE 32, PAR. 2 OF CPRC – HOTELS

Pursuant to article 32, par. 2 of the Code of Public Revenue Collection, in case that rents have been paid in advance or assigned, the tenants or sub-tenants must submit a declaration to the competent Tax Office before the imposition of seizure and provide a document certifying this declaration. The impact of such declaration is significant as, pursuant to Article 33 of the Code of Public Revenue Collection, where a seizure is imposed but the declaration has not been submitted or it has but not in time or does not have the form prescribed in Art. 32, the third party will be considered as the debtor of the amount for which the seizure has been made.

This declaration must also be submitted in the case of hotel contracts. These are lease agreements concerning hotel rooms that can be concluded either directly by the interested customers alone or via travel agents. They share similar attributes with lease agreements, work contracts, service and sale agreements but since the element of lease agreements dominates, they are subject to the provisions of the Civil Code for lease agreements. Therefore, article 32, par. 2 of the applies also in the case of advance payment or assignment of rents of hotel contracts.

PORT FEES: TAX DECLASSIFICATION

Pursuant to Law 2399/ 1996, every passenger embarking or disembarking from a ship is subject to a special port usage due in favour of the management and exploitation operators of the ports of embarkation and disembarkation. The fee shall be used exclusively for the execution, maintenance and improvement of port constructions and facilities. Port dues are public revenue. State authorities are required to provide all necessary information at their disposal for controlling the collection of the passenger tax at the request of the relevant public bodies, namely Port Authorities SA (former Harbor Funds).

Among the States, authorities are also the Public Financial Services (PFS), which are obliged to provide the absolutely necessary tax data of enterprises in order to ascertain the regular certification, collection and reimbursement of the special passenger tax by the company. Thus, this is an exemption from the fiscal confidentiality provided in Art. 85 CL 2238/1994 CODE OF INCOME TAX, considering the need to ensure the existence of this special fee. (Opinion of the Legal Council of State 509/2008)

COLLISION CONVENTION 1910 AND MASS (Maritime Autonomous Surface Ships)

Maritime Autonomous Surface Ships (MASS) are unmanned vessels capable of fully operating at all times with little or no physical human intervention. They are usually programmed and controlled electronically but they are also capable of being navigated physically in emergency situations. Despite the fact that MASS does fall into the definition of Ship used in the Collision Convention 1910, there are some difficulties in applying the convention to MASS, regarding the fault of the vessel during navigation. The Collision Convention 1910 was based on the fact that there is a master on board, responsible for the navigation of the ship and capable of interfering and execute any operation necessary to prevent the collision. In the absence of a master, the liability for any fault during navigation that led to collision must be sought among the operators that program or radio guide the ship. The courts have not yet resolved this issue. In any case, the shipowner is still liable for any collision damage that was caused by his servants on who he entrusted the safe navigation and operation of the MASS.

CONVERSION FROM A CUSTODIAL SENTENCE TO A FINANCIAL PENALTY

According to article 82 of the Greek Criminal Code, the custodial sentence which is up to five years can be converted into a financial penalty by the Court. The conversion rate varies from 5 to 100 Euros per custodial day or day of imprisonment. For the calculation of the above – mentioned sum one should take into consideration the personal and financial situation of the sentenced. The total amount is a lump sum payment, nevertheless, there is a possibility to pay in instalments either ex-officio or after a request made by the sentenced person in cases, where there is a substantive change of the circumstances of his personal and financial situation. This request should be addressed to the same court that issued the judgment with the requirement to pay the judicial expenses or in case of inability to cover such expenses, with the requirement to get the relevant certificate from his personal tax office. Together with the request, one should also submit his authorization for i. the submission of the request, ii. his legal representation at the court hearing and iii. his waiver from the subpoena and its deadline, as well as a copy of the relevant judgment.