August 2023 – Provisional Order regarding the reduction of amount of a guarantee conditionlawuser
The opposing party proceeded with the seizure in September 2022 of banking accounts held by a company active in the field of medical technology equipment. Within the framework of the filed Objections according to Article 933 of the Code of Civil Procedure, an application for the suspension of the enforcement of the imposed attachment was also filed. Initially, under the framework of a Provisional Order, a temporary suspension of the seizure on the main bank account used by the aforementioned company for its transactions with its clients (public and private) and for meeting its obligations (towards tax authorities, insurance funds, suppliers, etc.) was granted until the decision on the Objections was issued, as well as on a bank account of one of the guarantors in the disputed contract was made.
However, the decision issued in December 2022 on the main request for suspension of the enforcement, although it acknowledged the validity of the filed objection (specifically concerning the abusive nature of the imposed seizure and the violation of the principles of proportionality, necessity, and appropriateness of the chosen enforcement measure) and recognized the viability of the company, the importance of the uninterrupted operation of the company’s disputed bank account, and the irreparable damage it would suffer if the suspension of the seizure was not granted, the requested suspension was accepted under the condition of providing security, which was set at the considerable amount of 50,000 euros (regarding the guarantor, a suspension was granted without security).
In the months that followed, despite the company’s renewed efforts to find a compromising solution to the dispute, the opposing party proceeded with further enforcement actions against the company. By the end of July 2023, despite the aforementioned efforts to find a compromising solution to the dispute, the opposing party moved to freeze the company’s disputed account, as the considerable security required had not been deposited by that time.
An immediate request for the reform of the decision that set the security to the amount of 50.000 euros was submitted, followed by a request for the issuance of a relevant Provisional Order. The Provisional Order issued on August 4, 2023, granted our request for temporary suspension, until the discussion of our main request for the reform of the above decision (in which the security was set at 50,000 euros), without fulfilling the condition of the initially set security. Instead, a specific form of provisional reduction of this security to the amount of 10,000 euros was granted, an amount which our client could provide without having to cease its operation.
The main arguments that led to the above decision of the appointed Judge were as follows: 1) the validity of our raised objection against the attachment, 2) the non-finality of the claim, 3) the abundance of the enforcement measures taken by the opposing party, which collectively far exceeded its alleged claim, 4) the irreparable damage the company would suffer from the cessation of the operation of the disputed account, especially given its immediate impact, among others, on the signing of a relevant medical technology supply contract with a Public Hospital (the operation of the account and the liquidity it ensured were essential for issuing the necessary performance guarantees for the contract with the Hospital), and the irreversible and significant damage that would be inflicted on the infants who would not receive timely appropriate medical care due to the inability to cover their medical needs, 5) the non-expiration of the 8-day period since the service of the disputed seizure, after which the seizured claim is assigned to the seizing party, given that the objection had been timely raised and the granted suspension (since the company was a Servicer Company and had not served the decision providing the suspension, which was granted under the condition of a 50,000 euro security, to both the company and the bank holding the account as a third party) had not allowed the remaining 8-day period to elapse. The elements under 3 and 4 are also those that are presumed to be evaluated by the Court that will decide on the main request, as they constitute a change in the circumstances that justifies the final reform of the decision under review.
The above Provisional Order of August 4, 2023, which temporarily reduced the initially set security, on the one hand, allows for the smooth operation of our client’s company and the fulfillment of the contracts it maintains with the Public, and, on the other hand, provides the necessary time for the issuance of a decision on our raised objection, which will determine the legality of the disputed imposed attachment, while simultaneously giving our client the necessary time to make new and even more intensive efforts to find a realistic and sustainable settlement for the alleged claims of the opposing party.