Central Bank confirms appeal will be launched against Laiki ruling

The Central Bank of Cyprus (CBC) on Tuesday confirmed it would file an appeal against the decision of Limassol district court that ruled in favour of a depositor who saw his deposits in the now-defunct Laiki Bank slashed in 2013.

The CBC said it had studied the November 8 decision with its legal advisers and intended to proceed with the registration of an appeal “since in similar cases decisions have been issued at [the court of] first instance, which support the opposite”.

On November 8, the court ruled that the CBC – and consequently the Republic of Cyprus – had been negligent in their handling of the financial crisis in 2009 and the lead up to the haircut.

As a result, the Russian depositor was awarded €780,833 in his lawsuit against Laiki, its administrator, the CBC and the government.

The court found the government negligent because it did not turn to European mechanisms in time for a loan and then “without seriousness and planning” opted for a loan without knowing the bank’s needs, which were greater than those of the state.

The court also slammed former President Nicos Anastasiades himself, whose statements that he would never allow a haircut on deposits led the plaintiff not to withdraw their savings from the bank. As a result, the depositor was found to have suffered real damage through their loss from the haircut.

The ruling marked the first time since Cyprus’ bail-in that a plaintiff had won a case concerning the haircut on their deposits. All previous court cases have failed.

The legal service announced on November 9 that the attorney-general would file an appeal on behalf of the Republic.

The lawyer for the Russian depositor said last week he was confident of winning the appeals brought by the AG’s office and the CBC.

Asked on Tuesday about the court’s decision and whether the government was considering some compensation for those who lost their money in the haircut, Spokesman Konstantinos Letymbiotis said the president “did not wait for the decision of a court to consider it”.

Meetings held with those representing the depositors were well known, he said.

“The pre-election commitments of the President of the Republic have already been implemented. By the end of the year the platform will be ready where they can complete the application and according to the state’s capabilities and the data that will be presented to the platform, action can be taken,” he added.