GREECE: An Introduction to Dispute Resolution

Undoubtedly, during the past year the Russian invasion in Ukraine has drawn the international community’s attention. It is a rather common belief that the repercussions of the Russian invasion are yet to be completely discovered. The effect of the war is particularly suffered by the energy sector, since Russia has been Europe’s main supplier of natural gas for decades. Consequently, prices for energy resources have skyrocketed, stimulating unprecedented social turmoil.

In the shadow of these developments and the major energy crisis that has erupted as a direct outcome of the war in Ukraine, a noteworthy discussion has opened in Greece, regarding the increased cost of electricity bills and the inability of consumers to meet their payment obligations. The issue has been raised due to the fact that the country’s leading power-supplying company has taken advantage of a loophole, enabling it to impose upon consumers an adjustment to the electricity bill (adjustment clause). This clause is part of every contract between electricity suppliers and consumers, giving the right to the former to adjust the charge for electricity consumption, depending on the fluctuations in the price of electricity production.

The primary concern surrounds the validity of such clauses. It is indeed debatable whether the average consumer is capable of perceiving the significance of this type of clause, which can in fact led to unbearable charges for approximately equivalent consumption levels. The importance of this question has driven several consumer unions to take action before Greek courts, in pursuit of a final resolution on the matter. At the moment, a judgment of temporary effect has forced suppliers to suspend power disconnections in households that cannot afford the additional charge, based on the adjustment clause.

Undoubtedly, the aforementioned issue could be resolved, on a judicial level, by means of the “pilot trial” tool, which allows the Supreme Court (Areios Pagos) to directly make precedent and issue a decision regarding complex interpretative legal matters of general interest that impact a wide group of persons (Article 20A of the Greek Code of Civil Procedure). Despite the fact that this specific matter seems to have fulfilled all prerequisites for a pilot trial to be conducted, Areios Pagos surprisingly chose otherwise.

Faced with an impasse causing increased social tensions, the legislator intervened by Law 4951/2022, freezing adjustment clauses of any kind on floating electricity supply tariffs up until 1 July 2023, with a governmental discretion to either extend or abbreviate this period. Additionally, electricity suppliers were forced, pursuant to a relevant provision of the above law, to publish, in a clearly visible space on their websites, the fixed charges and the electricity supply charges for power and energy applicable to the above-mentioned tariffs, before the application of said charges. On the other hand, consumers were vested with the right to switch electricity suppliers or to select another category of supply invoice, without giving rise to any right to compensation of the former supplier for early withdrawal.

Leaving the war in Ukraine aside, the impact of COVID-19 seems to be gradually declining, although the pandemic has definitely left its mark on several Greek legal provisions. Without a doubt, social distancing has created the need to digitalise civil procedure, making it more flexible and achieving the award of justice within better time limits. For instance, last year saw the introduction of the concept of electronic filing, as well as of service by electronic means. Though it is premature to draw safe conclusions as to their adequacy and sufficiency, time will tell whether they will achieve their purpose.

The trend towards the digitisation of our legal system in general was also reflected in the past year, in the introduction of L. 4967/2022, regarding contracts for the supply of digital content and services and contracts for the sale of goods. This particular law has amended the sales law, aiming to update private law in relation to modern transactions.

In this respect, the rules for every sales agreement shall apply to contracts for the supply of digital content and digital services, a concept which is introduced for the first time in the Greek Civil Code (GCC) and adds new dimensions to the content of the so-called “conformity of the thing with the sale contract”. If any conclusion can be drawn from the amendments set out in the aforementioned law, it would be that the reform of the sales law undoubtedly enhances legal certainty, as the parties to the transaction (seller and buyer) will now know in advance which requirements they will have to comply with. Greek law will thus also become more attractive as a choice of applicable law even in international contracts.

Another major issue for the Greek community that arose during the past year was whether loan servicing companies have active legalisation to carry out procedural acts in relation to real estate auctions. Contrary to L. 4354/2015, L. 3156/2003 does not contain a provision regarding the aforementioned legalisation. Thus, the power of leverage companies to initiate auction proceedings is left open to interpretation. On this crucial legal subject, Areios Pagos has issued contradictory judgments in a short period of time, causing major confusion on a matter that is undoubtedly of general interest and highly relevant in practice. Ultimately, the issue is set to be addressed by the Plenary Session of the Supreme Court in the following months.

In the sector of alternative dispute resolution, there are significant efforts aiming to attract clients and persuade them to select Greece as the seat of the arbitration proceedings. By choosing the seat, parties also choose the arbitration legislation that will apply to the case and the national courts having jurisdiction over the arbitration proceedings. While domestic arbitration is regulated by the GCCP, international arbitration is governed by L. 2735/1999, which adopted the UNCITRAL Model Law. However, the UNCITRAL Model Law was amended in 2006 and the Greek legislation had not since proceeded to any amendments, in order to reflect the 2006 version of the Model Law. Although a draft bill on international commercial arbitration was prepared in 2020, it was never passed by Parliament, despite the fact that, in 2022, the same draft bill was presented to Cabinet for the purpose of discussion and comments on the new regulatory framework. This is about to change.

In the first days of January 2023 a noteworthy development took place. A new draft bill, up to the standards of the UNCITRAL Model Law, was submitted to the Greek Parliament. Such law introduces a series of modern provisions, which are more in line with the needs of international transactions, such as the presumption of arbitrability, in the sense that it establishes the general rule that all disputes are arbitrable, unless prohibited by law. Additionally, it grants the power to the arbitral tribunal to order interim measures, if the tribunal deems it expedient, whereas the arbitral tribunal is also granted the power to force the parties to submit documents or any other evidence in their possession, which are likely to have an impact on the outcome of the case. The extent to which such amendments will ultimately be adopted by Parliament and introduced to our legal system remains to be seen.