The President of the Limassol District Court, by judgment dated 31 January 2022, dismissed an action brought against the Republic of Cyprus, the Central Bank and the Bank of Cyprus, in which, inter alia, the plaintiff alleged that the measures and decisions taken under the Credit and Other Institutions Resolution Law of 2013 violated its constitutional rights by awarding costs in favour of the defendants.
According to a statement by the Legal Service, in its judgment the Court noted that under the Eurogroup agreement the means of recapitalising the Bank of Cyprus were limited, the resolution measures taken were necessary since they were a precondition for the signing of the Memorandum of Understanding between the Republic of Cyprus and its Lenders and without this agreement the Republic of Cyprus would have been driven to bankruptcy. Consequently, the Court concludes, the measures taken were necessary to prevent the collapse of the entire financial sector with disastrous consequences for the economy of the country and the destabilisation of the entire financial sector.
The Court concludes by holding, inter alia, that reasons of public interest justified, in March 2013, the adoption of the contested orders by the Resolution Authority. According to the Court, the issuance of the orders was absolutely necessary in the light of the prevailing circumstances.
The case was handled on behalf of the Attorney General of the Republic by Ms Theano Mavromoustaki, Senior Counsel of the Republic, and Ms Zachelina Erotokritou, Counsel of the Republic.
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