Pafos Live 13 June 2023
The Nicosia District Court last week issued a ruling concerning the obligation of banks to execute timely instructions to their customers to transfer money.
According to the facts of the case, described in a statement by lawyers Christos Galanos and Yiannis Zavrou of Michael Kyprianou and Co LLC Law Firm, who represented the depositors, the plaintiffs were residents of Greece and held a joint deposit account with Bank of Cyprus at the beginning of 2013 with a balance of approximately €1 million. On 15/3/2012 the plaintiffs correctly and having completed all the necessary forms instructed the bank to transfer virtually all of their deposit account to a Bank of Cyprus branch in Greece.
The bank failed to execute these instructions on the same day it received them, followed by what the court described as "cataclysmic" events that led to the "haircut" (impairment) of Bank of Cyprus' bank deposits. In particular, the Minister of Finance with relevant notifications declared the days that followed as "Special Bank Holidays" while on 25/3/2013 the well-known agreement between the Republic of Cyprus was concluded, of the Eurogroup and the International Monetary Fund. The essential condition of which was, inter alia, the resolution by own means of Bank of Cyprus.
As a result of the above, the plaintiffs lost a large part of their money and filed a lawsuit seeking damages from both the Bank of Cyprus and the Central Bank and the Republic of Cyprus.
In his ruling, the President of the Nicosia District Court, Mr. Angelos David, referred to the bank's legal obligation towards its customers, which is to exercise reasonable care and skill. In this particular case, the judge found that, according to the testimony adduced, there was no objective difficulty in executing the bank on the same day the order it had received to transfer the money. He found credible the testimony provided by the plaintiffs concerning the time and manner in which they had instructed the bank.
The decision states:
Bearing all the above in mind, taken as a whole and objectively, it is the conclusion of the Court that defendant 1 bank, in the present case, by failing and failing to act as the mandate of its plaintiffs-clients, while appearing to have had the opportunity to do so, breached its obligation to exercise due care and diligence towards them. Nothing has been brought to the Court's attention to justify its negligence and failure to execute the contested order of the plaintiffs at any material time.'
Therefore, the court awarded the plaintiffs an amount of €282,000 plus statutory interest from the date of filing of the action, which is the amount they lost due to the impairment suffered by their bank account.
