An important legislative milestone on judicial settlement with public authorities was reached with the Supreme Court’s Decision 766/2014, ending standing inklings of preferential treatment of the public sector vis-à-vis private companies.
Specifically, a public entity hospital filed against a commercial company at the Supreme Court, seeking to overturn a prior decision of the Appeal Court which called for the hospital to pay to the company the outstanding sums accrued from medical supplies private contracts between the parties, along with the 6% interest that is foreseen for public sector entities from the time of filing, according to Law 46/1974. The initial Appeal Court decision was based on art. 4 of the 166/2003 Presidential Decree; the hospital, on its side, called these agreements null because their size exceeded 2.500 euros.
Concerning interest and following the rationale of the decision and the above-mentioned Presidential Decree (which has adopted Directive 2000/35EC into Greek law) on combatting late payment in commercial transactions, the Supreme Court ruled that if a set date or due date has not been agreed by the parties, the debtor owes interest without any further notification 30 days from receiving the products; for contracts between businesses and public authorities, the deadline extends to 60 days. Moreover, the interest size is determined by the interest rate set by the ECB’s reference, increased by 7%. Therefore, the company has the right to collect interest after thelapse of 60 days from the delivery and acceptace of the products to the hospital depending on the invoice dates and charged with a supplementary interest rate of 7%.
The Supreme Court similarly ruled that any contract which exceeds €2.500 or creates long term liability and is signed by a public authority may be classified as a private contract, while the draft proposal (order) and its agreement can happen with separate documents as well. If the contract is fully implemented, the lack of signed agreement is not a reason for judging the agreement as null.
In this particular case, the Court admitted that these non-contractual sales agreements which, indeed were not made in writing, were not null due to their subsequent implementation and the initial written offer. The ruling highlights the significance of the Presidential Decree 166/2003, which although revised by Law 4152/2013, is still in force for contracts signed during that period.
Comment from our Office
There is a noticeable effort to harmonize citizen rights and to combat late payments. It is worth noting that the current Law 4152/2013, through which 2011/7EC Directive was implemented into Greek law, is in force both for businesses and for public authorities. The law deals with all medical supplies, pharmaceutical products and services from the public sector and the Greek national healthcare (ESI and EOPI) hospitals. The important changes it has introduced have the force of mandatory law.
