13 December 2014
The Republic of Cyprus was due to have responded by 5 December to the ICC’s Arbitral Tribunal in reply to the filing for arbitration by the owners of FBME Bank. The Republic has requested additional time to reply, which has been granted, and the new date is 7 January.
The International Court of Arbitration at the Paris-headquartered ICC was founded in 1923 and led the development of international commercial arbitration as it is known today. The Court provides parties with a neutral setting for the resolution of disputes and its decisions have wide international recognition; some 145 countries, including Cyprus, have signed the 1958 New York Convention on the ‘Recognition and Enforcement of Foreign Arbitral Awards’. Since its inception, the Court has arbitrated in more than 20,000 cases.
The ICC – International Chamber of Commerce – was formed in Paris in 1919 and is the largest and most representational business organisation in the world. Through the hundreds of thousands of members, it has unrivalled authority in making rules that govern the conduct of business across national borders.
FBME’s shareholders filed for arbitration at the ICC against the Republic of Cyprus on 28 October pursuant to the Agreement on the Reciprocal Protection of Investments, between Lebanon and Cyprus of 9 April 2001. This is in respect to the taking over of FBME Bank’s Cyprus branch by the Central Bank of Cyprus and its attempt to enforce a fire sale on what was a healthy and solvent institution.
The shareholders requested the immediate appointment of an Arbitral Tribunal to settle the dispute promptly before irretrievable damage is caused by the Central Bank of Cyprus. They are seeking compensation for damages as a result of the Central Bank of Cyprus’s illegal actions estimated to be at least US$500 million.