The Paris-based arbitration court of the International Chamber of Commerce on Tuesday ruled in favour of the Republic of Cyprus in an appeal filed against the country by the owners of FBME bank.
The owners of the bank, which lost the licence of its Cyprus branch in December 2015, appealed to the court seeking €1.5bn in damages from the Republic of Cyprus, citing its failure to protect their investment.
In a statement on Tuesday, Central Bank of Cyprus (CBC) spokesperson Aliki Stylianou said that they were “completely satisfied” with the court’s ruling.
“It shows the correct decisions were made by the management and staff of the Central Bank of Cyprus,” she said.
The Law Office of the Republic also welcomed the decision, saying “it confirms that the Central Bank of Cyprus acted as a prudent supervisory authority and that the Republic did not violate any of its obligations”.
FBME, the holding company of Tanzania’s FBME bank, was put into liquidation by the CBC on December 21, 2015, when the central bank revoked its licence.
The owners of the bank filed their appeal with the Paris-based court in 2014, where they sought compensation from the state.
The Bank of Tanzania revoked FBME’s licence on May 5, 2017 and decided to liquidate the lender.
The Central Bank of Cyprus which revoked the licence of FBME’s Cyprus branch and fined it €1.2m for failing to comply with the anti-money laundering law in December 2015, initially placed the Tanzanian lender under administration and subsequently under resolution after US authorities described the lender as a financial institution of primary money laundering concern in July 2014.
In April 2016, the central bank also triggered the deposits guarantee scheme to compensate depositors with up to €100,000.
The rejection of the central bank’s request for the appointment of a liquidator by the Nicosia district court in May 2017 – on the grounds that it did not serve the public interest – came a week after the Bank of Tanzania, which supervises the mother bank, revoked the licence of FBME and appointed a liquidator itself.