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The consolidation measures of 2013 are legal

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Άλλη μία The court ruling puts a brake on the efforts of “trimmed” depositors to compensate for the loss they suffered from the implementation of the reorganization measures in 2013.

Judgment of the Limassol District Court, dated June 3, 2022, confirms the need to take reorganization measures and dismisses a lawsuit filed by Bank of Cyprus depositors against the Republic of Cyprus, the Central Bank of Cyprus in 2013 against the Bank of Cyprus. and their conversion into shares. The plaintiffs demanded additional compensation by disputing the manner in which Laiki Bank's liabilities were transferred to Bank of Cyprus, arguing that it greatly burdened the Bank of Cyprus's finances and maximized the impairment rate of their deposits.

The Legal Service of the Republic states in a statement that the court, after analyzing the allegations of the plaintiffs, rejected them in their entirety, judging them as arbitrary and unsubstantiated, noting that no scientifically substantiated evidence was brought before the court . On the contrary, the court accepted the testimony of the defendants that the assets of Laiki Bank transferred to Bank of Cyprus were greater than the transferred liabilities of Laiki, with the result that there is no question of further burden on the depositors.

The court also accepted the position of the Attorney General of the Republic regarding the fact that the Republic of Cyprus is wrongly and/or incorrectly sued for insufficient and/or insufficient supervisory control in the banks, since it is not legally in charge and/or competent for such a thing.

Typically, the court states in its decision:

“By taking the consolidation measures, the maintenance and continuation of the supply of the basic and critical banking operations was achieved, as a result of which the financial stability of the Cypriot banking system as a whole is ensured. In addition, depositors were fully protected, ensuring their immediate access to insured deposits, without passing on the cost of bank consolidation to taxpayers. Also, the possibility of thousands of employees of Bank of Cyprus and Laiki Bank being unemployed was avoided. The measures taken above were absolutely necessary but also inevitable, before taking them all possible options were thoroughly examined, and the depositors of the two affected banks are not in a worse position than they would be if the above measures were not taken. ” .

Regarding the allegations of the plaintiffs about the violation of the constitutional right to property, the District Court of Limassol ruled that they are not correct since, according to a previous decision of the plenary of the Supreme Court (Myrto Christodoulou et al. – ν- Demokratias, 553/13 etc.), from the moment money is deposited in the bank, they cease to be an asset of the depositor.

As regards the plaintiffs' allegations of discrimination against them on the grounds that the remediation measures were not applied to specific categories of depositors, such as charities and the general government, the court accepted the Advocate General's position that “[…] the effect would be the possible application of the measures to the specific categories of depositors, which would be the impairment of the deposits of the Bank of Cyprus and according to & # 8217; The plaintiff was finally convinced that before the reorganization measures were implemented in the banks, the full range of facts and data on the basis of these and it was judged that the implementation of the rescue measure by own means was the most appropriate measure under the circumstances.

On behalf of the Attorney General of the Republic, the case was handled by Mrs. Theano Mavromoustaki lawyer of the Republic.

Source: politis.com.cy

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