Summary

Ayoub Farid Michel Saab and Fadi Michel Saab v Attorney-General, Central Bank of Cyprus, Ntinos Christophides, District Court of Nicosia, Civil Case No. 541/2014

It has been filed on August 14, 2014 by Ayoub Farid Michel Saab and Fadi Michel Saab ('the Saabs') against the Attorney-General of Cyprus ('AG'), the Central Bank of Cyprus ('CBC') and Ntinos Christophides, the Special Administrator ('SA') of the branch of FBME Bank Ltd in Cyprus ('the Branch'). One decision that has been issued, is publicly available: the interim order of December 17, 2014. It is unclear, whether these proceedings are still pending or a final judgment has been issued.

(December 17, 2014) The Saabs sought: (a) an interim order suspending the CBC's order on resolution measures for the Branch, those being selling its banking business ('the Order'); (b) an interim order suspending the appointment of SA; and (c) a mareva injunction prohibiting the taking of any further measures regarding the Branch. It was based on the Brussels 1 Regulation of the EU, the ECHR, the Cyprus-Lebanon BIT (2001) ('BIT'), the Constitution of Cyprus, the Law on International Commercial Arbitration, the banking legislation, the courts' legislation, precedent and equity. The Saabs purported that it would support the international investment arbitration against Cyprus, which was to be submitted to ICC in Paris according to Article 12 of the BIT. They had made the necessary notification to the Minister of Finance of Cyprus on July 28, 2014. The Court rejected the application of the Law on International Commercial Arbitration, as the BIT was applicable in the present case. It further noted that the present petition was premature, as an international arbitration was yet to be initiated, as the Saabs admitted. It thus rejected the application. Still, it proceeded with addressing the other objections raised by AG, CBC and SA. It found that there was no investment under BIT, as FBME Bank Ltd was registered in Tanzania and not Cyprus. It further noted that the structure of FBME Bank Ltd had not been elucidated before the Court and it was therefore unable to establish the connection of the Saabs with it. Thus, the Saabs were not investors under the BIT, the Court adjudicated. It then reiterated that neither the cooling - off period of 6 months under the BIT, nor the one of 3 months under the ECT (applicable under the BIT's MFN standard) had lapsed. Furthermore, it stated that the Order was wrapped in a cloak of legitimacy and constitutionality, whereas at the present stage, the Court was unable to examine the validity and legitimacy of the Order. Especially with regard to the grounds necessary for an interim order, the Court found that neither a serious issue was brought before it, nor were its chances of success high, due to the inapplicability of the Law on International Commercial Arbitration and the premature nature of the present application lacking initiation of an international arbitration. With reference to the imminent danger, the Court adopted the view that any damages shall be calculable in money and therefore respondents shall be able to compensate the Saabs.

The application was therefore rejected. [Document]

Note: Document(s) and English introduction(s) kindly provided by Natalia Charalampidou.