Member Article

Dr. K. Chrysostomides & Co LLC, WSG member firm for Cyprus, lead an important collective action before the Court of the European Union in Luxembourg against the Eurogroup , the European Central Bank and the European Commission, for damages as a result of their acts and omissions relating to the Cyprus bailout

The Application for damages brought before the General Court of the EU against the Eurogroup and other EU institutions (the European Central Bank, the Commission, and the Council) in relation to the ‘bail-in’ measures imposed on Cyprus in March 2013 by fifty-one applicants, has been duly served on the defendants. The EU institutions must now file their defense within two months, unless an extension is granted by the Court.

The case is unprecedented in two respects: Firstly, Cyprus is the only EU Member-State - to date - to have been provided with financial assistance on the precondition of a ‘bail-in’ and other coercive measures against individuals. Secondly, this is the first time in the history of EU jurisprudence that the Luxembourg Court has been asked to decide on whether the acts of the Eurogroup are attributable to the EU. Due to the significant implications of the case, the case was recently included for discussion in a high-level meeting of representatives of the Member States.

The Application in question has been brought by Dr. K. Chrysostomides & Co LLC; a second similar application is expected to be filed imminently.

By this recourse, fifty-one depositors, bondholders and shareholders of Cypriot banks are seeking compensation for the loss suffered as a result of the imposed ‘haircut’ on their deposits, as well as, the depreciation (in both value and number) and/or elimination of their shares and bonds held with the Bank of Cyprus and the ex-‘Laiki’ Bank. In particular, the applicants challenge the decision of the Eurogroup of 25 March 2013 imposing a ‘bail-in’ on the two Cypriot banks, as well as, the acts of the European Central Bank, the Commission and the Council in endorsing and implementing that decision. They claim that these decisions have violated their right to property and the principles of non-discrimination, protection of legitimate expectations and the principle of proportionality, as prescribed by EU law.