Cyprus supreme court rejects polish depositor appeal over 2013 bank haircut

The Supreme Court of Cyprus has unanimously dismissed an appeal by a Polish national seeking compensation for losses incurred during the 2013 banking crisis. The appellant held a term deposit of €454,579.52 at Laiki Bank, which was reduced to €24,508.16 following resolution measures, resulting in a loss of approximately €430,071.36. She argued that the Cyprus government was liable for this loss under the 1992 bilateral investment protection agreement between Cyprus and Poland, which required compensation for indirect expropriation. The court upheld the lower court's ruling, determining that the 1992 agreement is unenforceable within the framework of European Union law. The judges emphasized that bilateral agreements between member states cannot contradict EU law or the principle of non-discrimination based on nationality. Furthermore, the court noted that both countries signed an agreement in 2020 to terminate such bilateral investment treaties. This decision reinforces the precedence of EU legal principles over historical bilateral treaties regarding state liability for bank restructuring.