news | 01 November 2014 | Stelios Americanos & Co LLC

Eurogroup ECJ Decision

On Wednesday , 5th November 2014, the European Court of Justice has rejected applications submitted by Cypriot citizens and an insurance fund, which requested the annulment of the political decision of Eurogroup on Cyprus (25th March 2013) which included a ‘haircut’ on uninsured bank deposits held with Cyprus Banks.

The Application:

In their form of order, the applicants claimed that the Eurogroup ‘s decision exceeded its powers conferred by the Treaty of the European Union.

Applicants also maintained that the decision was in breach of the right to respect for property, which is protected by Article 1 of the First Protocol to the European Convention for the Protection of Human Rights and Article 17 of the European Convention for the Protection of Human Rights, as confirmed by the Charter of Fundamental Rights of the European Union.

They also indicated that the decision of Eurogroup was manifestly unfounded and lacking any legal basis, contrary to the principle of proportionality.

The Court was asked to decide whether Eurogroup ‘s statement could be attributed to the European Commission and the European Central Bank (ECB) and analyse the role of Eurogroup in the European Union and as such determine its relations to the Commission and the ECB.

The Decision:

The Court has pointed out that the Eurogroup is a ‘forum’ of discussions at a ministerial level of the representatives of the member states and not a body that could take decisions.

Additionally the Court mentioned that, even though in the sessions where Eurogroup is taking part, the European Commission and the ECB ‘s participation is also necessary, but Eurogroup ‘s involvement consists of an informal session of the ministers of the member states.

No responsibilities and/or powers have been delegated and/or conferred upon Eurogroup by the European Commission and/or the ECB, and the latters have no responsibilities to exercise control over Eurogroup.


In summary, the Court is convinced that the contested statement of Eurogroup is of a purely informative nature and does NOT consist of an act capable to produce any legal effects against third parties and hence rejected the applications.

Therefore, following the aforementioned decision of the European Court of Justice, in combination with the judgment of the Supreme Court of Cyprus dated 7/6/2013, it is now evident that any person wishing to contest the decrees of the Cyprus government should pursue a civil action in the District Courts of Cyprus, seeking damages against the banks involved and the institutions of the Republic involved in the implementation of the decrees in question.

The submission of a law suit at the District Courts of Cyprus remains the only available remedy to access the European Court of Human Rights at Strasburg, since the European Court of Justice has already decided that Eurogroup is not considered as a body of the European Union that could take any binding decision, therefore applicants need to exhaust all available local remedies, before filing a petition at the ECHR to challenge the decrees and seek damages.

This is a condition precedent to seek relief at the ECHR.

Our law firm, being one of the first law firms to have filed petitions for judicial review of the decrees in question and after taking part in the hearing of the leading case of the Supreme Court dated 7/06/2013, has the necessary expertise to support and claim the rights of the uninsured depositors.

We are ready to file class actions to mitigate costs to the minimum, so if you are interested in joining the group civil law suit please contact our law firm by the end of the month, i.e. 28 November 2014.
At this point we consider it vital and of importance to inform you on 31 October 2014, the full bench of the Supreme Court of Cyprus decided that 4 laws enacted by the House of Representatives were unconstitutional.

The plenary session of the Court stated that these enactments are in conflict with the separation of powers and notably, the separation of political and executive power and judicial power. Additionally, they are in violation of Articles 23 (right of property), 25 (freedom of freely choosing and exercising profession), 26 (freedom of contract), 28 (right of equality), 30 (right to a fair trial) and the list goes on.

These are the main arguments that we will put forward beforethe Court to promote our case. The Supreme Court after delivering the above mentioned judgments seem to be very strict in relation to the violation of the aforementioned Articles of the Constitution of the Republic of Cyprus. Notably, it will not accept any violations regarding freedom of contract especially if this is amended unilaterally and the other party is deprived of its right to negotiate and/or disapprove the amendments. In this way, the weak party has no bargaining power and is deprived of ‘free choice’ as to the terms and conditions of a contract binding on him.

This is contrary to one of the fundamental human rights i.e. freedom of contract. The plenary session of the Supreme Court has accepted unanimously that this deprivation will in effect cause lack of trust and uncertainty among citizens.

This decision, which is binding, shall certainly be used to strengthen our legal arguments before the District courts. It is our strong belief that the Courts will have to follow the Supreme Court’s reasoning and apply it to the ‘haircut’ cases, since they are very similar: the depositors were deprived of their rights unilaterally without any negotiation or consultation whatsoever, but with a decision imposed upon them by the Government.

We remain at your disposal should you need further clarifications on the matter.


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