Enforcement measures

Repossession following lease termination

Outline the basic repossession procedures following lease termination. How may the lessee lawfully impede the owner’s rights to exercise default remedies?

After lease termination, the lessee is obliged to deliver the aircraft to his or her contractual counterpart, owner or lessor. Nevertheless, if the lessee fails to comply with this obligation, the owner or lessor may exercise the self-help remedy provided in a notarial lease contract and seek its enforcement against the lessee. If the lease agreement is a private contract and not enforceable per se, there are no self-help remedies available to the owner or lessor, who may only proceed to claim repossession by following the Greek law provisions on enforcement of his or her rights as such. These require pursuing and obtaining an enforceable judgment against the lessee through legal proceedings before the competent Greek civil court. Such a judgment is vested in the form of enforcement and is served upon the lessee via a competent court bailiff, ordering him or her to return possession of the aircraft to the owner or lessor. If the lessee fails to comply, the court bailiff expels the lessee from the possession of the aircraft, which he or she hands over to the owner or lessor. These steps are recorded in an enforcement report, which is served without delay upon the administrator of the airport where the aircraft is situated. It is self-evident that the enforcement procedure outlined above presupposes the previous arrest of the aircraft.

The lessee may lawfully impede the owner’s rights to exercise default remedies only if he or she can prove that the aircraft is defective and as a result it has caused damages to the lessee while the lease was running, due to delays in the performance of scheduled flights, etc.

Enforcement of security

Outline the basic measures to enforce a security interest. How may the owner lawfully impede the mortgagee’s right to enforce?

If a security (mortgage) on an aircraft is given by notarial deed, which is expressly enforceable, the mortgagee may proceed to enforcement against the aircraft without a court order. If the security is given by a private non-enforceable agreement, it will be necessary for the mortgagee to pursue an enforceable court order, which will give him or her the right to enforce his or her interest against the aircraft.

Enforcement on aircraft may take place by applying the general provisions of the Greek Code of Civil Procedure (GCCP) on enforcement and execution (articles 904 to 940) and the specific provisions of articles 992 to 1016 of the same Code ‘on attachment of the debtor’s immovable property, ships or aircraft’.

An aircraft may be detained provisionally by way of an ex parte application.

In the case of insolvency, a creditor’s enforcement rights are suspended and must follow the procedures provided by Greek law on insolvency.

Priority liens and rights

Which liens and rights will have priority over aircraft ownership or an aircraft security interest? If an aircraft can be taken, seized or detained, is any form of compensation available to an owner or mortgagee?

The liens that have priority over an aircraft or aircraft security interest (mortgage) are (i) costs and fees relating to salvage and rescue; (ii) extraordinary and necessary expenses for the aircraft’s maintenance; and (iii) charges, dues and air navigation taxes that burden the aircraft (article 74 section 2 GALC). Liens are also exercised on the insurance indemnity for the damage to or loss of the insured aircraft if the creditor notifies the insurer of the amount of his or her claim within 30 days of the occurrence (article 78, section 2 of GALC). Liens are not exercised on freight, nor on various inducements owed to the owner of the aircraft, either for contribution to joint average, or for effected salvage or rescue. The aforementioned liens are extinguished (i) on the aircraft’s sale in public auction; or (ii) after the lapse of three months since the claim arose.

Aircraft may be seized as a means of enforcement of a private claim. The seizure of an aircraft entails prohibition of take-off. When the decision ordering confiscation becomes irrevocable, the ownership of a confiscated aircraft passes to the Greek state. No compensation is available to an owner or mortgagee.

Enforcement of foreign judgments and arbitral awards

How are judgments of foreign courts enforced? Is your jurisdiction party to the 1958 New York Convention?

With regard to judgments issued by the courts of other EU member states, Regulation (EU) No. 1215/2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters applies. More particularly, as per the provisions comprised in Chapter III, section 2 of the above Regulation on enforcement (articles 39 to 44), a judgment issued in a member state, which in that same member state is enforceable, shall be enforceable in the other member states without the requirement of any declaration of enforceability (article 39). An enforceable judgment shall carry with it, by operation of law, the power to proceed to any protective measures which exist under the law of the member state addressed (article 40).

According to Regulation (EU) No. 1215/2012, the procedure for the enforcement in Greece of judgments issued in another member state, shall be governed by Greek law. A judgment issued in a member state, which is enforceable in that state, shall be enforced (in Greece) under the same conditions as those applying to a judgment that was issued in Greece (article 41 paragraph 1).

For the purposes of enforcement in a member state, and, in our case, in Greece, of a judgment issued in another member state, the applicant shall provide the competent enforcement authority with (i) a copy of the judgment that satisfies the conditions necessary to establish its authenticity, and (ii) a certificate confirming that the judgment is enforceable, containing an extract of the judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest (article 42 paragraph 1). Where enforcement of a judgment issued in another member state is sought, the aforementioned certificate shall be served on the person or legal entity against whom the enforcement is sought prior to the first enforcement measure. The certificate shall be accompanied by the judgment, if the latter is not already served on that person or legal entity (article 43 paragraph 1).

If enforcement is sought for judgments issued in a non-EU member state jurisdiction, then article 905 of the GCCP shall apply. According to this, provisions of international treaties to which Greece is a member state and to EU regulations, an enforcement of foreign court judgment is possible in Greece, under the condition that this judgment is declared enforceable via a Greek court decision issued by the one member court of first instance of the residential or the headquarters’ district of the debtor. The aforementioned competent court shall issue its decision according to the Rules on Non-Contentious Jurisdiction Procedure provided in articles 740 to 781 GCCP. According to article 905 paragraph 3 GCCP, the prerequisite for the declaration by the Greek courts of the enforceability of a foreign (non-EU) court decision is that the conditions explicitly set out in article 323 paragraphs 2 to 5 GCCP are met. More specifically, a foreign, non-EU court judgment shall be declared enforceable:

  • if the subject case was according to the provisions of GCCP subject to the jurisdiction of the courts of the state where the court that issued the judgment belongs;
  • if the defeated litigant party was not deprived of its right to defend itself and, generally, of its right to participate in the trial, except for the case where the deprivation of such a right took place according to a specific legal provision applicable to the citizens of the state of the court that issued the judgment; and
  • if the judgment is not contrary to fair practices or public order. (It should be noted that there is no different treatment relating to the enforcement in Greece of English and New York Court judgments).

As far as the enforcement of arbitral awards is concerned, article 906 GCCP applies, according to which foreign arbitral judgments are declared enforceable in the same way as foreign court judgments are, (ie, via a court decision issued by the one member court of first instance of the residential or the headquarters’ district of the debtor). The aforementioned competent court shall issue its decision according to the same Non-Contentious Jurisdiction Procedure provided by articles 740-781 GCCP. Additionally, though, in the case of foreign arbitral judgments, all six prerequisites explicitly set out by article 903 GCCP must collectively concur. More particularly, an arbitral judgment or award may be declared enforceable in Greece:

  • if the relevant arbitration agreement, upon which the issuance of the arbitral award is based, is valid under the provisions of the governing law;
  • if the object of the arbitral judgment may be the object of an arbitration agreement according to Greek law;
  • if the judgment is not subject to an appeal or recourse, or there is no pending procedure questioning the validity of the arbitral judgment;
  • if the defeated party was not deprived of the right of defence during the arbitration procedure;
  • if the arbitral judgment in question is not contrary to a Greek court judgment issued in the same case, thus consisting in a res judicata for the parties among which this arbitral judgment was issued; and
  • if the judgment is not contrary to public order or fair practices.

Greece is a party to the New York Convention of 1958, which it ratified via legislative decree No. 4220/1961, under the condition of the two limitations set forth in the Convention’s article I(3).