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- Ελληνικά
District Court: Republic not liable in matters of supervision and liability of supervisors in connection with bank collapse
In dismissing two lawsuits filed against the Republic in connection with cases relating to the 2013 deposit impairment at Laiki Bank, the Famagusta District Court, which in November 2023 issued two Judgments in respective cases, dismissing any liability of the Republic of Cyprus for bank supervision issues as well as any liability for the collapse of the banks.
The first judgment of the Court, dated 14 November 2023, concerns the dismissal of a claim brought by a company against the Republic in relation to the loss of securities and the impairment of deposits in Laiki Bank in 2013. The action was originally brought against Laiki Bank, the Bank of Cyprus, the Central Bank of Cyprus and the Republic of Cyprus. During the course of the case, the plaintiff company unconditionally withdrew the action against all defendants except the Republic of Cyprus.
In its judgment the Court, rejecting the company's claims, states, inter alia, that "[...].] leads inevitably to its dismissal since there is no credible evidence before the Court from which it can be concluded that the Republic knew of the illegal or even irregular way of disposing of the securities and allowed it, or that it did not take the appropriate measures to control and/or ensure that the methods applied in disposing of the securities were within the framework of the relevant laws and/or European Directives and that it did not exercise sufficient supervision over the People's Bank. [...]"
The Court dismissed all the claims of the plaintiff company, dismissed the action and awarded costs in favour of the Republic.
The second judgment of the Court was delivered on 20 November 2023 and concerns the dismissal of a company's action brought against the Republic in relation to the impairment of deposits at Laiki Bank in 2013. The action was originally brought against Laiki Bank, Bank of Cyprus and the Republic of Cyprus. In the course of the case, the plaintiff company unconditionally withdrew the action against all defendants except the Republic of Cyprus. The plaintiff company's claim was based on allegations of negligence in relation to acts and omissions of the Republic, the Central Bank of Cyprus and the Cyprus Securities and Exchange Commission, as well as allegations of violation of the plaintiff company's property rights.
Both the allegations on the issue of negligence and the liability of the Republic for the acts and/or omissions of the Central Bank of Cyprus and the Cyprus Securities and Exchange Commission were rejected, with the Court explaining that the supervisory authorities are independent authorities which are not subject to supervision by the Republic. With regard to the right of ownership, the Court, citing a previous Court decision, stated that: "[...] the measures do not constitute an excessive and unacceptable interference with the very essence of the right to property...".
The Court rejected all the claims of the applicant company, dismissed the action and awarded costs in favour of the Republic.
On behalf of the Attorney General of the Republic, the first case was handled by the Attorney General of the Republic, Ms.
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