ATHENS, Greece and NEW YORK, Sept. 30, 2015 /PRNewswire/ -- A large group of Greek investors formally filed an arbitration proceeding against the Republic of Cyprus for losses arising from the global financial crisis and the 2013 bailout of Cyprus.
Claimants include 676 individual and institutional investors asserting 434 separate claims against Cyprus. The investor claimants, who are all Greek nationals, were depositors and bondholders of Laiki Bank and the Bank of Cyprus, whose investments were lost due to legislation passed by the Cypriot government in connection with the country's €10 billion bailout by the European Union, the European Central Bank and the IMF. Many investors lost much of their life savings following the bailout.
Leading financial litigation law firms Grant & Eisenhofer; Kessler Topaz Meltzer & Check; and Kyros Law; along with international law firm Volterra Fietta, have filed the claims on behalf of the Greek investors to recover their losses, estimated at hundreds of millions of euros.
The case has been filed with the International Centre for Settlement of Investment Disputes, an international investor tribunal affiliated with the World Bank; the dispute will be adjudicated through binding arbitration. In July 2014, investors earlier had submitted a notice of dispute to the Cypriot government, pursuant to an investment treaty between Greece and Cyprus, which provides that the parties must first attempt to settle their dispute for at least six months before arbitration proceedings can begin. Typically in the ICSID forum, one arbitrator would be appointed by the Greek investors, one by Cyprus, and the third would be appointed by agreement (or by ICSID itself).
"We have formally brought suit before ICSID after the Cyprus government failed to respond to our filing notice of the dispute and made no effort to negotiate," said Grant & Eisenhofer co-managing director Jay Eisenhofer. "This is the first time that Greece and Cyprus' bilateral treaty will be tested as a group action for large numbers of investors. We have since spent more than a year identifying the hundreds of claimants in this action, and anticipate additional claims of tens of millions of euros to be brought in the coming year."
The investor claimants seek recovery of the value of their deposits or bonds lost as a result of the Cyprus bailout. Their claims arose out of Cyprus' response to its financial crisis, following Greece's default on its own bonds in 2012. Laiki Bank and the Bank of Cyprus had purchased huge amounts of Greek bonds and lost billions of euros once Greece defaulted.
By late 2012, certain European institutions began bailout negotiations with Cyprus. The institutions – comprised of the European Commission, the European Central Bank and the International Monetary Fund – became known as the Troika.
An initial bailout proposal by the Troika, which would have required significant austerity measures and a levy on all bank accounts in Cyprus, was rejected by the Cyprus Parliament. As a consequence, on March 25, 2013, Cyprus agreed to a revised bailout deal with the Troika that only impacted bondholders or uninsured depositors in Laiki Bank and Bank of Cyprus – who were overwhelmingly from countries other than Cyprus. Further, in connection with the bailout, a number of Cypriot entities – including the government itself – were exempted from the harsh treatment imposed on foreign investors.
Mr. Eisenhofer stated, "We believe that Greek investors were singled out and discriminated against during the bailout —while Greek depositors were subject to extreme bailout measures, many public institutions of Cyprus were made exempt. Our law firms have been coordinating litigation efforts in Greece for more than a year to work toward the recovery of investor funds."
Grant & Eisenhofer and Kessler Topaz regularly represent European and international institutional investors. The firms led a coalition of global investors – more than 50 institutions in Europe, Australia and elsewhere – in successfully bringing a securities class action in the Netherlands against Royal Dutch Shell, which was accused of vastly overstating its oil reserves in financial disclosures. The unprecedented action led to a payment of more than $500 million from the oil giant– the largest securities fraud settlement ever in Europe. G&E has also litigated major shareholder cases in Germany, France and the UK.
Since 2013, G&E and Kyros Law have been working together under a joint agreement on investor-driven litigation coming in and out of Greece, including matters stemming from the country's economic meltdown. The collaboration benefits investors litigating in Greece through Kyros' Athens office, as well as Greek investors litigating in the United States via Grant & Eisenhofer.
About Grant & Eisenhofer
Grant & Eisenhofer is one of the top litigation and arbitration firms in the United States. The Firm represents institutional investors from across the globe in U.S. and international securities class actions, derivative lawsuits, antitrust suits, bankruptcy litigation and other complex financial litigation matters. The Firm has more than 60 attorneys, with offices in Wilmington, New York and Chicago, and an international docket of high-profile cases. G&E has recovered more than $28 billion in the last 10 years and has twice been cited by RiskMetrics for securing the highest average investor recovery in securities class actions. G&E has been named one of the country's top plaintiffs' law firms by The National Law Journal for the past 11 years, and was named one of the nation's "Most Feared Plaintiffs Firms" by Law360 every year since the inception of the list. For more information please visit http://www.gelaw.com/
About Kessler Topaz
Kessler Topaz Meltzer & Check has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world and is a driving force behind corporate governance reform. The firm represents investors, consumers and whistleblowers in complex litigation and has presented claims before various arbitration tribunals. For more information about Kessler Topaz Meltzer & Check please visit www.ktmc.com.
About Kyros Law
Kyros Law specializes in a wide range of complex litigation, corporate governance matters, and mass torts, including the representation of whistleblowers, shareholders and consumers in securities fraud, false claims act and class actions. For more information, visit Kyros Law's U.S. website at www.kyroslawoffices.com or its Greece website at www.kyroslawoffices.gr
About Volterra Fietta
Volterra Fietta is a team of public international lawyers, with a top-tier global reputation in investment treaty arbitration. The only public international law boutique in the world, and the only international arbitration boutique law firm in the United Kingdom, the firm has one of the largest dedicated treaty dispute teams in the world. Volterra Fietta acts for States, international organizations and private entities in every continent and region of the world. Volterra Fietta is authorized and regulated by the Solicitors Regulation Authority. For more information, visit http://www.volterrafietta.com
SOURCE Grant & Eisenhofer