Lawsuit Dismissal at Limassol District Court
In a recent ruling, the Limassol District Court has dismissed consolidated lawsuits brought forth by a group of depositors against the Cyprus Popular Bank (Laiki), the Central Bank of Cyprus, and the Republic of Cyprus. The legal action was in response to the controversial 2013 financial measure commonly referred to as the “haircut”, which saw depositors’ funds significantly reduced in an effort to stabilize the banking system.
The claimants, consisting of four individuals, were seeking recompense for the financial losses they suffered due to the haircut on their deposits at Cyprus Popular Bank. Their accusations pointed towards alleged negligence and breaches of human rights by the defendants. However, the Court’s decision was clear, stating that there was no negligence or breach of institutional duty on part of the Republic of Cyprus or its officials.
One of the key points in the Court’s ruling was the lack of “foreseeability” regarding the haircut, suggesting that the claimants could not convincingly establish that the defendants should have anticipated the negative outcomes of such a financial measure. The Court also noted that the resolution measures taken were not more detrimental to depositors than what would have occurred under a bank liquidation scenario.
Challenges to the constitutionality of the resolution measures and allegations of human rights violations were also addressed by the Court. These were deemed non-essential or unsubstantiated, respectively, and thus did not influence the outcome of the case.
In conclusion, all four consolidated claims were dismissed, and the Court awarded costs to the defendants. The Attorney General’s Office took on the representation for the Republic of Cyprus, successfully defending against the claims made by the depositors. This decision marks another chapter in the ongoing saga of Cyprus’s financial recovery efforts post-2013 crisis.
