A Swedish arbitration court rejected on Tuesday an appeal filed by two bailed-in investors from Poland against the Republic of Cyprus seeking compensation for losses suffered in Cyprus’s banking crisis four years ago, the Law Office said.
“The ruling was issued by the Arbitration Court set up pursuant the arbitration rules of the Stockholm Chamber of Commerce, to which the two Polish investors appealed, claiming that the measures taken in relation to their bank account at Bank of Cyprus equalled an illegal expropriation of their property rights in violation of the bilateral Investment Protection Treaty signed between Poland and Cyprus,” the Republic of Cyprus’s Law Office said in a statement on the website of the Press and Information Office on Wednesday.
The two investors claimed a total of €306,472 in compensation for the funds lost and additional €3.9m euros for loss of profit plus interest payment from March 25, 2013 onwards, the office said.
The arbitration court “unanimously” rejected the two investors’ claims and ordered them pay €111,300 to the Cypriot government in arbitration fees paid and €1.1m to cover 70 per cent of lawyers’ fees, the office continued. After the arbitration court ruled on the core of the claim, it decided that it did not need to rule on the objection filed by Cyprus that European law exceeded the provisions of the bilateral treaty with Poland.
Cyprus was represented by the New York-based Curtis, Mallet-Prevost, Colt & Mosle, in cooperation with the Law Office, the Central Bank of Cyprus and the Finance Ministry, the statement said.
As part of Cyprus’s 2013 bailout terms, uninsured depositors at Bank of Cyprus saw almost half of their deposits converted to equity.