Maritime bench marks Greek progress

The law, and western civilisation as we know it, has its origins in Greece. Today, a large chunk of the world fleet is operated by Greek interests, and Piraeus has an important role as an international player in the worldwide shipping community. We asked well-known Greek maritime lawyer Theo Sioufas, founding partner of Theo Sioufas Law Offices, Piraeus, how the Greek legal system operates and what changes have occurred in recent years.

What changes have occurred in Greek shipping in recent years - and how has this affected lawyers in Piraeus?

The profitability of the Greek flag began to dwindle in the 1980s when the cost of running vessels, combined with the high cost of finance and the bad freight market conditions, made the economic operation of Greek ships extremely difficult. So most Greek owners went to other flags offering lower costs. This trend has continued and has, in fact, escalated in the last few years.

No sufficient and timely steps were taken by the Greek government to reverse this trend and make it profitable to operate under the Greek flag. As a result many Greek seamen became idle and the Seamen's Pension Fund (NAT) in Greece is effectively bankrupt. Other social security organisations are also in serious financial difficulties - due principally to a combination of poor management and the effects of steadily increasing demographic problems which Greece shares with other European countries - and NAT is now financed almost completely by government funds.

"The trend of repatriation of shipping operations from London (and other foreign shipping centres) to Piraeus and Athens is on the increase."

On the other hand, one should emphasise two positive developments. The first is that the Greek owned/controlled merchant fleet is still the largest in the world. It is growing and being modernised. The second is that the trend of repatriation of shipping operations from London and other foreign shipping centres to Piraeus and Athens is on the increase.

The latter has led to an increase in the number of foreign banks which have established a presence in Piraeus/Athens to better accommodate the needs of their customers. The same applies with regard to English law offices established in Piraeus, as well as to other collateral service businesses, the number of which has gone up substantially over the last few years. With regard to the English law firms, I believe that the Piraeus shipping market cannot support so many of them, and I dare say that the present trend will be reversed.

Which flags are now most used by Greek owners?

The most popular flags with Greek owners, depending upon tonnage, are Cyprus, Malta, Panama, Liberia and the Bahamas. As a result of the dramatic fall in the numbers of Greek-flag vessels, there is less reason for litigation in Greece which, naturally, is never good news for the Greek legal profession.

How do the Greek courts work?

The courts in Greece are divided into three divisions: civil, criminal and administrative. Civil and commercial (including maritime) matters are primarily dealt with by the civil courts (Politika Dikastiria).

As in all other systems, the civil courts have a hierarchical ranking as follows:

• the courts [justices] of the peace (Eirinodikeia)
• the courts of first instance (Protodikeia) (multi-member or single-member)
• the courts of appeal (Efeteia)
• the supreme court on civil/commercial and criminal matters (Areios Pagos)

The courts of first instance sit in the main towns of Greece. The single-member courts hear cases with a higher monetary value than the courts of the peace, as well as cases involving particular special jurisdictions or special procedures such as labour disputes. The three-member courts have general competence for all matters not allotted to the courts of the peace or the one-member divisions. They also act as an appellate court for the cases decided by the justices of the peace. The courts of appeal have general jurisdiction for all appellate matters not specifically assigned to another court. All appellate hearings before the court of appeal and the court of first instance are by way of re-hearing on the basis of the evidence before the court at first instance.

The Areios Pagos is the supreme court of Greece in respect of civil/commercial cases and also criminal cases. Hearings are on legal issues only and are not full re-hearings of the facts.

Generally, civil and commercial litigation follows a so-called "Ordinary Procedure" (Taktiki Diadikasia). However, in order to provide a quicker form of litigation for certain types of action, Greek law has introduced various special procedures (Eidikai Diadikasiai).

"One of the key changes to influence maritime law dispute resolution in Greece has been the establishment, in 1996, of a maritime bench in Piraeus."

A special voluntary jurisdiction exists for certain actions, in particular the ratification of a foreign judgement, or arbitration award.

The course of litigation is based upon a written pre-trial procedure. There is no process of discovery, save in limited exceptional cases requiring the parties to go through a cumbersome procedure. The parties develop their case on the basis of the evidence available to them. Subject to a duty to observe the rules of morality, good business ethics and good faith, there is no absolute obligation upon parties to disclose evidence harmful to their case.

Prior to the hearing of the case, the parties must submit their written submissions (Protaseis), accompanied by all the relevant documentary evidence in support.

A plaintiff's written submissions do not necessarily have to contain an analysis of the law upon which the action is founded, as the court is assumed to know the law (Uranovit Curia). However, in practice, such analysis will be included in the submissions.

Written submissions

Under the ordinary procedure, the hearing before the multi-member courts of first instance is usually completed by the filing of written submissions and the appearance before the court of the litigant with an attorney, or by the attorney alone at the date of hearing. Exception is made in cases where the evidence available is complete and the witnesses depositions are almost immaterial. Even before the single-member courts of first instance, the courts of peace, and the cases adjudicated under the voluntary jurisdiction, the procedure is in writing unless the litigants wish to examine witnesses.

In the ordinary procedure of the single-member court of first instance and the exceptional ordinary procedure of the multi-member court, the parties are entitled to examine their witnesses viva voce. In the ordinary procedure of the multi-member court, after completion of the written submissions, the court will give either a final or interlocutory judgment ordering witness depositions.

Usually, the commonest forms of evidence comprise documents and witnesses. Evidence from witnesses will be allowed when the plaintiff cannot obtain the documentary evidence, or if, in the circumstances of the case, witness evidence is justified. In support of the evidence-gathering process, the court has power to grant orders for the preservation of evidence and to allow a plaintiff to enter and search premises and seize and preserve evidence found there.

A Greek court will have jurisdiction over a matter whether the litigants are Greek or foreign nationals or citizens, if it has geographic competence under Greek law to hear the case. The issue of jurisdiction is a question the court must examine of its own motion. The basic element establishing the competence of the relevant court is the domicile of the defendant. For contractual claims, a concurrent jurisdiction is vested in the court of the place where the contract was or was to be performed. Alternatively, the place where the agreement was completed may provide a basis for the courts to found jurisdiction.

"The Greek Maritime Law Association aims to promote Piraeus as an arbitral centre for the resolution of maritime disputes."

There are no special rules requiring foreign plaintiffs to provide security for costs. Defendants have the right to petition for security for costs against a plaintiff where they can show that there is an obvious risk that they will not be able to enforce any award of costs to them.

Under Greek procedural law there is a presumption in favour of the enforcement of foreign judgment and other instruments of title. Foreign judgments will be enforced if they satisfy certain criteria determined by procedural law. Judgments and arbitral awards form part of the body of executive instruments for which the courts will provide their enforcement machinery. No enforcement proceedings are possible unless the claim is certain and final. For claims other than monetary claims, various forms of executionary measures are possible, depending on the nature of the claim.

"I believe that the Piraeus shipping market cannot support so many English law firms."

The procedures for enforcement are not carried out by the court, but are conducted by the creditor under the supervision of the court. Since the procedures are both complex and formal, it is important to ensure strict compliance with the rules. Otherwise, the enforcement proceedings may be invalidated, thereby leading to further delay. Enforcement procedures are carried out by the bailiff and auction officer, who is a notary public. The auction officer is responsible for the conduct of the auction itself and for dealing with the post-auction issues.

It is open to the debtor or any third party showing lawful interest to challenge the enforcement proceedings at all stages up to the auction. Objections may be raised by the debtor or any third party having lawful interest at all stages of the auction procedure. Even after the auction, the debtor may challenge the validity of the auction proceedings. Finally, debtors or their creditors may challenge the list of creditors.

Prior to filing a civil or commercial action, the lawyer of the claiming party must try to resolve the dispute by agreement without court action. Changes introduced recently may influence things for the better in that they may result in a reduction in the court's volume of work.

What recent developments have taken place to assist maritime dispute resolution in Greece?

One of the key changes to influence maritime dispute resolution in Greece has been the establishment, in 1996, of a maritime bench in the Piraeus court of first instance and the Piraeus court of appeal. All cases, including marine insurance, sale and purchase disputes, chartering, crew cases, vessel auctions, enforcement of liens and mortgages, and other cases of a maritime nature are now settled in Piraeus. There are no maritime courts anywhere else in Greece, and the introduction of the bench in Piraeus will hugely benefit the development of maritime law there.

All the judges at the bench have a maritime law background and understand English.

How long does dispute resolution take in Greece?

As is the case everywhere else, judicial resolution of disputes takes time. Just how much time depends on the diligence of the parties concerned, especially the lawyers. The changes to Greek civil procedural law have speeded things up considerably, and cases can be addressed for first degree judgement over a period of one year.

What is the Greek Maritime Lawyers Association?

The Greek Maritime Lawyers Association was founded by prominent Greek maritime lawyers in 1995. The objects of the GMLA include:

• promotion of the professional interests of the community of maritime lawyers;
• active intervention in all matters concerning the organisation of the maritime bench and the proper and speedy delivery of justice in maritime cases.
• the taking of initiatives for the development of Piraeus as an international maritime centre;
• the introduction of legislative and administrative measures for the adoption by Greek owners of the Greek flag;
• the promotion of Piraeus as an arbitral centre for the resolution of maritime disputes;
• the adoption of Greek law as the law governing maritime contracts entered into by Greek maritime businessmen.

Almost all established maritime law offices in Greece are members of the GMLA, which has already made is presence known by blocking government policies that would negatively influence the development of Greek shipping. It is expected that the GMLA’s role and prestige will further increase in the foreseeable future.