Theodoros Adamakopoulos and others v. Republic of Cyprus
ICSID · Investment (ICSID and treaty) · Cyprus · 23 May 2024
Why it matters
This is a landmark mass claim (968 individuals and 6 companies) under ICSID, the largest ever in terms of number of claimants. The tribunal upheld Cyprus's bank resolution measures as a legitimate exercise of regulatory power, setting a precedent that states can adopt such measures without breaching investment treaty obligations, provided they are non-discriminatory and in the public interest. The decision reinforces the 'police powers' doctrine in investment arbitration.
Summary
In 2013, Cyprus faced a severe banking crisis. To prevent a disorderly collapse of Bank of Cyprus and Cyprus Popular Bank (Laiki), the government imposed resolution measures, including bail-ins on depositors and bondholders. Over 900 Greek nationals and six companies (one Luxembourg-based) brought a mass claim under the Cyprus-Greece and Cyprus-Luxembourg bilateral investment treaties, seeking approximately USD 570 million plus costs. They argued that the measures were expropriatory, discriminatory, and arbitrary, and that Cyprus had caused the banks' problems and failed to adopt less harmful alternatives. The ICSID tribunal unanimously dismissed all claims except one, finding that the measures were a legitimate exercise of regulatory power in the public interest. The tribunal noted that without the measures, the banks and economy would have collapsed, and that the Central Bank had properly considered alternatives. The sole exception involved a claimant who was treated differently from other exceptional cases at a later stage, but this did not affect the lawfulness of the overall measures. The tribunal ordered the claimants to pay Cyprus approximately USD 6 million in costs.
The detail
Parties: Theodoros Adamakopoulos and others v. Republic of Cyprus
Case number: ICSID Case No. ARB/15/49
Outcome: Tribunal dismissed all claims except one unique claim of a single claimant; ordered claimants to pay Republic approximately USD 6 million in costs.
Quantum: Claimants sought approx. USD 570 million plus USD 30 million costs; no damages awarded.
Applicable law: Bilateral investment treaties between Cyprus and Greece, and Cyprus and Luxembourg; ICSID Arbitration Rules.
Issues in play: The case involved the collision between the state's regulatory power to adopt bank resolution measures in the public interest and the investors' rights under investment treaties not to be subjected to arbitrary, disproportionate, expropriatory, or discriminatory treatment.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.