Court dismisses latest 2013 haircut crisis claims

The District Court of Nicosia dismissed a case brought against the Bank of Cyprus, the Central Bank and the Republic of Cyprus for the haircut on deposits during the financial crisis in 2013.

“The state was faced with an impasse and the measures taken were both for public interest purposes and to ensure, to the maximum extent possible, the deposits, including the plaintiff’s deposits,” the court stated in its July 20 decision which was released on Wednesday.

In its announcement, the attorney general’s office stated that the lawsuit sought the issuance of declaratory judgements and the payment of compensation for the alleged damages that the plaintiff suffered from the impairment of her deposits.

The decision stated: “The Bank of Cyprus was placed under reorganisation when it became impossible to secure the minimum necessary funds and while facing very serious liquidity issues. […] The above measures were taken to avoid the liquidation of the bank which would have disastrous effects on the creditors of the Bank of Cyprus and on the economy of the state.”