Brussels, 09/12/2014 (Agence Europe) - Can holders of securities issued by Greece, who participated without their agreement in the restructuring of the Greek debt in 2012, bring civil claims against Greece? The answer is no, because when it carried out an obligatory bond swap by legislative means, Greece was acting as a public authority, Advocate General Yves Bot ruled on Tuesday 9 December, when he presented his conclusions to the Court of Justice of the EU in four joined cases (C-226/13, C-245/13, C-247/13 and C-578/13).
The restructuring of the Greek debt in 2012, reducing it to €107 billion, was largely carried out on a voluntary basis (securities exchange offer). But for some of them, this was carried out forcibly. In this way, certain holders of securities issued by Greece found themselves, without having agreed to it, in possession of securities of a nominal value of just 53.5% of the initial nominal value. These new credits also had a longer maturity and were less secure.
A reference for a preliminary ruling was brought before the Court by several German courts, in order to determine the nature of the dispute between Greece and holders of Greek securities, who acquired these in Germany and are now calling for damages for infringement of their ownership rights. The question is therefore whether the actions brought against Greece come under civil law. If so, the actions brought could be made against Greece on the basis of the European regulation (1393/2007) on the service in the member states of judicial and extra judicial documents in civil or commercial matters.
However, Bot states that this is not the case, as Greece did what it stands accused of doing in the exercise of public authority and of its sovereign powers. The issuing of a bond by a State is admittedly a private law matter. However, if a State unilaterally makes changes by legislative means to the conditions related to these bonds, it is acting in such a way that its public authority action cannot be detached from its action as a contracting party. This means that any case brought against that State cannot be based on civil law, or on the regulation in question, Bot concluded. (JK)