In two of the three criminal cases adjudged in favour of Bank of Cyprus, a fundamental ingredient of justice was not upheld, namely the absence of the appearance of bias, Attorney-general Costas Clerides said on Tuesday.
The AG finally broke his silence amid a maelstrom raging over his brother’s public allegations that the supreme court has been captured by a top law firm, Chrysafinis & Polyviou.
In appeals heard before the supreme court, all three cases against Bank of Cyprus – understood to be the top client of the same law firm – were dismissed and the defendants acquitted.
In a lengthy statement, AG Clerides stressed that his brother’s views were his own, and that there had been no collusion between them in terms of coordinating their public remarks.
He was alluding to his brother’s posts on Facebook in December, where Nicos Clerides wrote:
“Our courts are controlled by the Polyviou and Chrysafinis law firm. There is not a single supreme court judge who does not have a child at the law office that promotes the banks’ interests,” the AG’s brother had said of the firm, which represents Bank of Cyprus.
Referring to the supreme court’s final judgment in the market manipulation (insider information) case filed against Bank of Cyprus, the AG noted that “three of the five judges on the appeals court have children or a spouse who are employed at the law firm representing the Bank and its officer in the appeals process.”
Citing court transcripts, Clerides said that at the beginning of the appeals process, which got underway on January 11, 2018, none of the members of the supreme court volunteered this information regarding their connection to the defendants’ law firm.
This was despite the fact that two days prior, on January 9, the European Court of Human Rights, in the case of Nicholas v. Cyprus, had stated:
“Given the importance of appearances, however, when such a situation (which can give rise to a suggestion or appearance of bias) arises, that situation should be disclosed at the outset of the proceedings…This is an important procedural safeguard which is necessary in order to provide adequate guarantees in respect of both objective and subjective impartiality.”
It was only after the state prosecutor, acting on Clerides’ instructions, raised the matter in court that the judges made a statement disclosing their connections to persons employed in the law firm.
In its judgment, the Echr also stated: “An automatic disqualification on the basis of such ties…is not necessarily required. It is, however, a situation or affiliation that could give rise to misgivings as to the judge’s impartiality.”
In short, the European Court did not mandate that judges should automatically recuse themselves from a case. However, Clerides added, the Echr ruling does not require court judges to assess the appearance of bias if and only if the litigants raise the matter of recusal – the judges ought to have done this on their own initiative, which they did not.
In the second trial against Bank of Cyprus, both the lender and its former CEO Andreas Eliades were eventually cleared of the charge of market manipulation, with the supreme court overturning the prior ruling of the criminal court.
In a 2 to 1 decision, the three-bench court found that Bank of Cyprus and Eliades, whereas they had made false representations about the financial status of the bank, did not do so with intent to manipulate the market but rather to ‘reassure’ shareholders.
This decision was erroneous, Clerides said. However, more worrying is what transpired shortly later.
“It emerged after this judgment that, close relatives of the chair of the appeals court, who happens to be the president of the supreme court, and whose vote decided the outcome of the case in the bank’s favour, that is to say the judge’s daughter and sister, had benefited from an out-of-court settlement in a lawsuit they had filed against the bank, relating to claims they made concerning the conversion of their deposits into bonds.”
Thought not naming the judge, Clerides was referring to Myron Nicolatos, the president of the supreme court.
He went on: “In the case of the judge’s daughter, who during the material time was a minor, all legal acts relating to the handling of the bonds in question had been handled by the judge himself, in his capacity as the minor’s father.
“In my view, this poses a very serious matter of objective impartiality, which ought to have led to the non-participation of the [supreme court] president in the proceedings of a serious criminal case. At the very least, this fact [the judge’s connection] should have been disclosed during the appeals process, in order that the litigants might express their opinions.
“Unfortunately, none of this took place.”
Given the above, Clerides concluded, “in the two aforementioned appeals it is impossible to state that the fundamental principle of justice was upheld, namely that justice must not only be administered, but first and foremost it must appear to be administered.”
Firing back hours later, the supreme court issued a written statement defending its conduct.
It cited the transcripts from the court proceedings, where the state prosecutor does raise the Echr ruling, but does not file a motion for recusal.
There follow brief statements by each of the judges, two of whom (Stelios Nathaniel and Leonidas Parparinos) state that their daughters work for the Polyviou & Chrysafinis law firm. The third judge, Antonis Liatsos, states that his wife has been working for several years at the law firm of Christos Triantafyllides, which defended former chairman of the Bank of Cyprus board Andreas Artemi.
The government is following the issue closely “due to its seriousness”, Justice Minister Ionas Nicolaou said.
“Both the President and the government express their concern over what is happening in the Justice sector, and they will not hesitate to act, if it is necessary, as is it outlined by the constitution,” Nicolaou said.