The Supreme Court of Cyprus issued a ruling today (Friday, 7/6/2013) on the 55 administrative recourse filed by bank depositors against decrees imposing the resolution of Popular Bank, which is being wound down, and Bank of Cyprus, where large depositors have been forced to forfeit savings for equity stakes in the bank.
The Supreme Court is the legal authority on the island which handles resources against state institutions. In this case, the Supreme Court was called to decide on the preliminary objection raised by the Attorney General’s office concerning the jurisdiction of the court to hear the resources.
The Court plenary ruled by majority vote that the decrees do not constitute a public act but a private act and as such jurisdiction lay with the District courts and as such it did not have jurisdiction to decide on the resources.
In its majority decision the Supreme Court stated:
“The nature of the relation between depositors in the Bank of Cyprus is the same as the one between depositors in the Cyprus Popular Bank. Neither have a lawful interest to lodge an appeal and the case lies in the context of private and not public law”.
The Court further stated said that since the bank’s contractual obligations were affected, depositors could launch civil lawsuits against the banks in the district courts, while these proceedings may be extended against the Republic which issued the Decree that affected the banks’ capacity to repay its depositors.
“The legitimacy of any infringement could be examined within this context,” the Court said.
It is not expected that the Supreme Court case will have any effect on the large number of civil cases pending against. It is however expected that further civil actions will be filed.
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Theodorou Law is a Cyprus law firm with Cyprus lawyers and other legal experts on legal matters involving Cyprus law, EU law and international law. The above should be used as a source of general information only. It is not intended to give a definitive statement of the law and is subject to the disclaimer.
