Limassol Court Rules on Laiki Bank Haircut Lawsuits
In a significant legal development, the Limassol district court has reached a verdict regarding the contentious 2013 financial haircut involving the now-defunct Laiki Bank of Cyprus, the Central Bank of Cyprus, and the Republic of Cyprus. The court has dismissed four consolidated lawsuits that were brought forward by plaintiffs who had incurred financial losses during the crisis.
The plaintiffs had sought reparations, claiming that negligent actions and/or omissions by the defendants led to the reduction of their deposits in Laiki Bank. They further argued that the restructuring measures taken in 2013 were unconstitutional and infringed upon their human rights.
However, the court’s statement elucidated that there was no evidence to suggest that the Republic of Cyprus or its officials had prior knowledge or could have anticipated the consequences that would necessitate the restructuring measures and affect the plaintiffs’ deposits. The court emphasized that the outcome of March 2013 was not reasonably foreseeable at the time.
Moreover, the ruling addressed the depositors’ situation post-restructuring, stating that the measures applied did not place Laiki Bank’s depositors, including those involved in the lawsuit, in a disadvantageous position compared to what they would have encountered had the bank been liquidated.
On the matter of constitutionality, the court deemed such considerations as non-essential for determining the outcome of this case, given the prevailing conditions. Additionally, it found that claims regarding violations of constitutional and/or human rights were unsubstantiated.
As a result of these findings, the court dismissed all four lawsuits in full and ruled that costs should be borne by the plaintiffs, in favor of the Republic and other defendants. This decision comes after an earlier ruling this year by the same court, which had initially favored depositors against the Central Bank and the Republic, citing negligence and misrepresentation leading to Laiki Bank’s downfall. That ruling was subsequently appealed by the attorney-general’s office.
