The law firms Grant & Eisenhofer PA (based in New York City) and Kyros Law (based in Athens), together with other counsel, are prosecuting claims against the Cypriot government in an international arbitration proceeding before the World Bank's International Centre for the Settlement of Investment Disputes.
This arbitration proceeding was brought on behalf of over 950 Greek citizens who lost funds as a result of their deposits in Laiki Bank (also known as Cyprus Popular Bank, Marfin Popular Bank or Marfin Egnatia Bank) or the Bank of Cyprus, or as a result of bonds they purchased that were issued by the Banks.
On February 7, 2020, in a landmark ruling, the Tribunal decided to accept jurisdiction over our case and allow all claims to proceed to the next phase where Cyprus may be ordered to produce internal documents about the bail-in, and the Tribunal will hear witnesses and assess Cyprus’ liability.
We now seek to file a new ICSID arbitration, based on the same evidence and claims, on behalf of the thousands of other Greek citizens who lost funds in the Bail-In.
On December 15, 2017, the Firms filed a Memorial on the Merits, setting forth in nearly 200 pages, supported by almost 2,300 exhibits as well as first-hand eye-witness testimony, the evidence that counsel for Claimants gathered during the course of years of investigation. We believe this evidence provides strong support for Claimants’ position that the Cypriot government’s involvement in the expropriation violated the rights of Greek citizens under the Cyprus-Greece Bilateral Investment Treaty.
The Arbitration alleges that Cyprus violated the BIT’s expropriation provisions because the Bail-In was intentionally designed to discriminate against non-Cypriots while ensuring that its own people would pay far less than their proportionate share. In particular:
The effect of these discriminatory provisions was that Greeks were made to shoulder more than double their share of the burden of the financial troubles in Cyprus.
In addition to being discriminatory, the expropriation was also unlawful for the following reasons:
The Arbitration also alleges that Cyprus violated the BIT’s guarantee of “fair and equitable treatment” to Greek investors, which essentially requires the Cypriot government to act in “good faith.” The Cypriot government’s lack of good faith is demonstrated by the facts that:
Today, Cyprus is thriving. Indeed, it did not even require all of the €10 billion in loans that Cyprus obtained from the Eurogroup as part of the Bail-In, and it has fully repaid the funds that it did use. The day is long overdue for Cyprus to pay back the funds it took from Greek depositors and bondholders.