Menu
Business

Greek depositors’ lawsuit against Cyprus drags on

May 23, 2019 at 10:00am
Edited by

Six years after the Cypriot bank ‘bail-in’ of 2013 and the legal battle against the Republic of some 950 Greek citizens who were customers of collapsed Laiki (Marfin/Cyprus Popular Bank) still goes on. Their case was heard before the International Court of Arbitration a few days ago.

Represented by American law firm Grant & Eisenhofer based in New York along with Kyros Law Offices in Greece, their total claim is for some €307 million which includes interest. The judgement is not expected to come out before the year’s end.

The applicants claim that Cyprus has violated the Bilateral Investment Treaty’s expropriation provisions because the bail-in was deliberately designed to discriminate against non-Cypriots, while ensuring that certain Cypriot entities would pay far less than their proportional share.

Specifically, the applicants argue that Cyprus was aware that most depositors with more than €100,000 in banks were foreigners and had rejected viable alternatives to the bail-in that would have at least divided the burden between foreigners and Cypriots. The Cyprus government had ensured that the loans it made to banks were fully repaid.

In addition, bail-in measures in the budget had excluded charities and other institutions that belonged only to Cypriot entities and citizens, according to the applicants. And the outcome was that the Greek nationals were forced to undertake twice their share of the burden of Cyprus’ economic woes.

The applicants also argue that the Cyprus government had relied on Pimco’s economic analysis of banks to argue that bail-in was necessary. But an additional, ‘secret’ report by Blackrock had concluded that there is lack of transparency in Pimco’s and this does not allow them to substantiate whether its conclusions were reasonable.

In addition, the Cyprus government has never made public the Blackrock Report, according to the applicants.

 

Read more:

Lawyers call on Greek nationals to turn against Cyprus