Cyprus Mail
Business

FBME loses fight to stop sale of Cyprus branch

THE NICOSIA district court has rejected an application filed by FBME bank for an interim order halting the expropriation and sale of its Cyprus branch, the Central Bank (CBC) said on Thursday.

The application was filed by the bank’s owners Ayoud Farid Michel Saab and Fadi Michel Saab.

The injunction aimed to rescind the resolution measures against FBME’s Cyprus branch, which Tanzania-based FBME Limited regards as a “hostile takeover and an illegal act”.

FBME said the Central Bank should wait until the arbitration is heard at the International Arbitral Tribunal of the International Chamber of Commerce in Paris, currently underway.

FBME is demanding compensation under the provisions of the agreement on the reciprocal promotion and protection of investments between Lebanon and Cyprus.

The court ruled that the applicants did not fall within the term “investor” as defined in the above agreement between the two countries.

Furthermore, the court stated that there is no transparency in relation to the shareholding structure of FBME Bank Ltd.

In August, the Supreme Court rejected a similar application filed by FBME Ltd of Tanzania for an injunction suspending a decision to implement resolution measures in the branch of FBME Bank Ltd in Cyprus.

The CBC took action on July 21, following allegations of money laundering against FBME Bank by the US Department of the Treasury.

The bank had been given until September 22 to respond to the US Treasury Department, which it has done.

FBME said the measures imposed by the CBC “blatantly contradict the terms of the Lebanese-Cyprus Convention of June 5 2002… which prohibits any nationalisation or expropriation of the assets of the citizens of either country. Article 12 of the Convention states clearly that in any dispute the parties will endeavour to settle amicably.”

 


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