24 August 2018
The Supreme Court of Cyprus has unanimously dismissed an appeal by the Central Bank of Cyprus (“CBC”) and the Resolution Authority against an earlier court decision which ruled that the Central Bank was not legally justified when it attempted to liquidate FBME Bank Ltd registered in Tanzania.There has notably been very little press coverage of this decision, which is in keeping with the negative portrayal of FBME Bank Ltd in the media. We therefore wish to update depositors on this development and confirm that we are doing everything in our power to ensure the return of their deposits.
On 22nd December 2015, the CBC filed an ex–parte application in the District Court of Nicosia seeking an order for the special liquidation and the appointment of a special liquidator against FBME Bank Ltd. This followed the events where the CBC and the Resolution Authority revoked the license of FBME’s Cyprus branch. On 10 May 2017, the District Court of Nicosia ruled that this application was unfounded, as the conditions for the relevant legislation to issue such an order were not met, and it had not been proved that the CBC’s actions and specifically the application to liquidate the Bank served the public interest, contrary to what the CBC attempted to claim.
The Honourable Judge, Ioannides, P.D.J., dismissed the application finding that the CBC failed to prove the legal requirements for the issuance of the said order.
In its unanimous decision the Supreme Court stated that they were in full agreement with the relevant findings of the court of first instance. The correct analysis, as endorsed by the Supreme Court, was as follows:
The shareholders of FBME Ltd are pleased that the Supreme Court of Cyprus has vindicated the position they have held since the CBC’s erroneous actions.
The 10 May 2017 judgment of the District Court of Nicosia, which was upheld, can be found here:
The 21 June 2018 judgment of the Supreme Court of Cyprus has not been uploaded online yet.