Cyprus Popular Bank Public Co. Ltd. v. Hellenic Republic

Case summary

At a glance

Parties: Cyprus Popular Bank Public Co. Ltd. (Laiki) (Cyprus) v. Hellenic Republic
Case no.: ICSID Case No. ARB/14/16 (Annulment Proceeding)
Forum and rules: ICSID Convention; ICSID Arbitration Rules 2006; place of proceeding Washington D.C.; hearing in London
Treaty: Greece–Cyprus BIT (in force 26 February 1993)
Committee: Prof. Dr. Rolf Knieper (President), Ms. Dyalá Jiménez Figueres, Mr. Michael D. Nolan
Underlying award(s): Decision on Jurisdiction and Liability of 8 January 2019 and Award of 15 April 2021 (Tribunal: Juan Fernández-Armesto (president), Giorgio Sacerdoti, Philippe Sands)
Sector: Banking; sovereign debt crisis
Outcome: The Committee unanimously rejected Greece's application for annulment (30 November 2022).
Amount: The Award granted EUR 34.5 million in damages. Annulment costs: USD 366,826.21, borne by Greece out of its advances; each party bears its own legal costs.

The dispute

Laiki is a Cypriot commercial bank. It was resolved in March 2013 and has since been under the control of its Resolution Authority, the Central Bank of Cyprus. In 2014 it brought ICSID claims against Greece under the Greece–Cyprus BIT over Greek measures taken during the financial crisis. The Tribunal upheld jurisdiction and dismissed most of the claims, including those on the private creditor debt exchange and on creeping expropriation. It found that Greece had breached Articles 2(2) and 3(1) of the BIT and awarded EUR 34.5 million. Greece applied for annulment under Article 52(1)(b), (d) and (e) of the ICSID Convention. It argued that: (i) Article 9 of the BIT had become inapplicable when Cyprus joined the EU in 2004; (ii) the Tribunal had ignored a separate State aid objection; (iii) the Tribunal had relied on documents that were not in the record; and (iv) parts of the liability and damages findings were made without evidence or reasons. Large parts of the published decision are redacted.

Key holdings

A manifest excess of powers must be both textually obvious and substantively serious. Jurisdictional errors are not reviewed more strictly than other errors. Misinterpreting or misapplying the law is not the same as failing to apply it. ¶¶ 196–203
The Tribunal wrongly stated that Greece first raised its objection that Article 9 was incompatible with EU law in 2018, after the Achmea Judgment. But read as a whole, the Decision did not grossly misrepresent Greece's position: it addressed and rejected the argument that Article 9 became inapplicable on Cyprus's accession in 2004. ¶¶ 208–219
The Tribunal's treatment of Articles 30(3) and 65 VCLT was not egregiously wrong. This includes its findings that the BIT and the EU Treaties do not relate to the same subject matter, that the primacy of EU law has only internal effects, and that EU law is treated as a fact. The Tribunal did not manifestly exceed its powers in upholding jurisdiction. ¶¶ 227–255
Greece did not plead the State aid point (Articles 107/108 TFEU) as a separate objection. It was part of the general EU-law objection, which the Tribunal dealt with. The annulment claim on this point failed under all three grounds. ¶¶ 259–264, 346, 412
The Tribunal referred on its own initiative to 27 legal authorities and one factual exhibit that were not in the record. This was not a serious departure from a fundamental rule of procedure: the documents concerned issues the parties had briefed, did not favour the Claimant, and could not have changed the outcome. ¶¶ 307–342
On damages, the Tribunal applied a reasonable-certainty standard to the counterfactual, following Lemire, and it considered the evidence. There was no serious departure from a fundamental rule of procedure and no failure to state reasons. ¶¶ 374–403, 425–430
Costs lie where they fall. Greece pays the costs of the proceeding out of its advances, and each party bears its own legal fees, because Greece's application was credible and the issues were not settled law. ¶¶ 440–444

Procedural history

20 June 2014Laiki submits the dispute to ICSID under the Greece–Cyprus BIT.
8 January 2019Decision on Jurisdiction and Liability: jurisdiction upheld; liability found in part.
15 April 2021Award, which incorporates the Decision, grants EUR 34.5 million.
12 August 2021Greece files its application for annulment. ICSID registers it on 25 August 2021.
14 September 2021Ad hoc Committee constituted.
8 April 2022Procedural Order No. 2 rejects the European Commission's application to intervene as a non-disputing party.
13–14 September 2022Hearing on annulment in London.
30 November 2022Decision on Annulment: application rejected unanimously.