The District Court of Famagusta rejected a lawsuit filed against the Republic regarding a case involving the loss of bonds by the Laiki Bank and the haircut of deposits in the Popular Bank in 2013.
On January 31, 2024, the court issued a decision dismissing any responsibility of the Republic of Cyprus for the devaluation of the bonds held by the plaintiff or the haircut of the plaintiff’s deposits.
The lawsuit was initially filed against the Laiki Bank, the Bank of Cyprus, and the Republic of Cyprus.
During the proceedings, the plaintiff unconditionally withdrew the lawsuit against all defendants except the Republic of Cyprus.
In his complaint, the plaintiff alleged negligence on the part of the Republic of Cyprus, particularly regarding the supervision it did not exercise over the Central Bank and the Cyprus Securities and Exchange Commission, as well as the breach of legal duties by the Central Bank and the Cyprus Securities and Exchange Commission under Article 172 of the Constitution.
Additionally, the plaintiff attributed significant responsibilities to the Republic of Cyprus for actions and omissions concerning the handling of the economic crisis in 2008 up to the events that occurred in 2013.
In its decision, the Court, rejecting the plaintiff’s allegations, stated, among other things, that the plaintiff’s arguments were “general without substantive content, and it was not proven that the matters alleged, such as the decision to haircut Greek bonds and the support of the Laiki Bank with ELA 1.8 billion euros, constitute improper conduct attributable to the Republic of Cyprus.
Nor was it proven whether the Republic of Cyprus indeed failed to timely resort to the Support Mechanism and/or whether any such omission led to the haircut of the plaintiff’s deposits or the devaluation of the bonds.
In conclusion, none of the positions presented in the complaint were proven and/or proven to have led to the current situation of the plaintiff.”
The Court dismissed all claims of the plaintiff, rejected the lawsuit, and awarded costs in favour of the Republic.
The case was handled by the Attorney General of the Republic, Ms. Marianna Tsagkari, on behalf of the Republic.
