This article recaps and supplements, as needed, the presentation and information provided by the author during the ACC live web seminar titled “Dispute Resolution for International Deals” and sponsored by Primerus, which took place on May 16, 2024.
1. The Greek Judicial System
There are three types of courts – civil, criminal and administrative ones. Most disputes deriving from international business transactions are civil. However, international business transactions can give rise to a criminal and/or an administrative matter.
There are three levels of judicial consideration: (1) first instance courts (2) Courts of Appeals and (3) the Supreme Court. A case is fully adjudicated on its merits at the first instance and appellate levels. At the supreme court level [the council of the state for administrative law cases], the review regards only questions of law.
2. Greek and European Union (EU) law
Greece is an EU member state. EU law is or should be [in case of possible late or non-appropriate transposition by Greece] part of the Greek law. Greece remains compliant with the EU law to most extent, whereas the majority of the Greek law has an EU origin.
3. Jurisdiction – Enforcement and Applicable law
For international business transactions, topics of particular importance include:
- the jurisdiction of the Greek courts and the enforcement of non-Greek court decisions or arbitral awards in Greece and
- the applicable law.
At the EU level the main relevant legislation is, respectively,
- Regulation (EU) No 1215/2012 [which replaced Regulation 44/2001 (the Brussels I Regulation)] on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters within the EU; and
- the so-called Rome I and Rome II conventions, namely Regulation (EC) No 593/2008 on the law applicable to contractual obligations (Rome I) and Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations (Rome II).
Regarding arbitral awards, Greece has signed and adopted the New York Convention “on the Recognition and Enforcement of Foreign Arbitral Awards” of 1958 [which is a quite popular international convention signed by 156 states thus far].
It is rare for a non-Greek court judgment or arbitration award in an international business transaction not to be recognized and enforced in Greece. The upper limits are international public order and bonos mores.
4. Greek Arbitration and Mediation Laws
Greece has modern arbitration and mediation rules.
Since 2023 Greece has a new law on international commercial arbitration [Law 5016/2023], which follows the 2016 UNCITRAL model law and its revisions as well as the latest trends in practice and theory.
Mediation started being applied in 2019 when a new law came into force [Law 4640/2019], which mirrors Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters [the Mediation Directive].
There has been a gradual increase in mediation. This was assisted by the COVID-2019 lockdowns, which also affected the courts, at a time when mediation could [and still can] take place online, and by the introduction of a mandatory initial mediation session for certain disputes. But the main driver for mediation is stated below.
5. Mediation, and Often Arbitration, are ESG Practices
Mediation and arbitration may offer a pragmatic alternative to a lengthy and restrictive judicial adjudication by taking into account the real and current interests of the parties.
This is why I strongly believe that mostly mediation, and arbitration to some extent, are ESG practices for dispute resolution.
There is no doubt that ESG is currently a trendy acronym and most probably it will remain so for a long time; this is not the place to expand on the contents and the importance of ESG (such as in terms of the financing of businesses), assuming that it is today known to most of us.
But why is, especially mediation, an ESG practice?
- Mediation can allow parties to have their dispute resolved in a very cost-effective way. It also allows the parties to resolve their dispute on the basis of their own interests and within very broad limits, which are, according to the Greek and the EU laws, public policy and bonos mores;
- Mediation can give parties a chance to formulate and pursue their own interests in the way they themselves would like to see their dispute resolved;
- Parties can reach [or try to reach] a sustainable dispute resolution, which can also maintain their relationship at the same time; this is particularly important in long-term contractual relationships, such as network contracts (eg. supply, distribution, agency agreements) and various other types of contracts (eg. lease, leasing, credit-financial agreements);
- This allows “everyone to be happy” and voluntarily comply with what was mutually agreed. Especially mediation, and often arbitration, add to sustainability and allow parties to continue or expand their relations despite their (unavoidable) differences.
6. Key takeaways
- Disputes, being unavoidable especially in the context of international business transactions, require not only very quick and cost-effective means of dispute resolution but also a way to reach sustainable solutions and maintain the parties’ relations, to the extent possible.
- Mediation in particular, and often arbitration, are ESG practices allowing sustainable solutions.
- Mediation and, ideally, med/arb clauses should be included as dispute resolution clauses in international business contracts.
- With or without a mediation or med/arb contractual clause, the parties should give mediation an honest try as a first attempt at dispute resolution.
- Mediation or med/arb should remain an option at any stage of judicial proceedings (always subject to the local procedural rules).
Author: Dimitris Emvalomenos, Lawyer, Mediator, Dep. Managing Partner at Bahas, Gramatidis & Partners LLP (a Primerus member firm)
