Supreme Court ruling forces ''haircut'' victims to district courts

The Cyprus Supreme Court has confirmed that cases related to the controversial 2013 "haircuts" at Bank of Cyprus and Laiki Bank must be heard by District Courts, not the Administrative Court, according to a statement from the Legal Service.

The ruling, issued on February 20, dismissed eleven bundled appeals that had been filed by depositors, shareholders, and security holders against the Central Bank of Cyprus, the Governor of the Central Bank, and the Minister of Finance. The appellants had sought to challenge the legality of the measures taken by the Central Bank to implement the resolution of the two banks, which involved significant losses for many customers.

These appeals had initially been filed with the Administrative Court, but the court ruled that it lacked jurisdiction, as the dispute was deemed to fall under private law, not public law. The decision was based on past rulings by the former Supreme Court in cases involving similar disputes, including those of Myrto Christodoulou and Via Demetriou, which also concerned the impairment of bank deposits. The former Supreme Court had classified such cases as private law matters, meaning they should be heard by District Courts rather than the Administrative Court.

In response, the appellants argued that the reasoning in those previous rulings was flawed and requested that the Supreme Constitutional Court depart from the past decisions. However, the Court upheld the earlier rulings, confirming the binding nature of previous decisions and agreeing with the Administrative Court's judgment that the case should fall under the jurisdiction of District Courts.

This ruling has significant implications for those who lost money in the 2013 "haircuts," as they now must pursue their claims through the District Courts, which may present additional challenges. It also marks a definitive conclusion to a long-running legal dispute over the fate of those affected by the bank resolutions.

The case was represented by Senior Advocate Irene Neophytou, on behalf of the Attorney General of the Republic.