ELA dispute comes to ICSID: Laiki vs Greece

Cyprus Popular Bank Public Co. Ltd. v. Hellenic Republic (ICSID Case No. ARB/14/16)


This blog has often discussed the ECB’s actions in relation to Greek ELA and ISDS. Here is a case that brings the two together.

Laiki Bank (Cyprus Popular Bank in English) has appealed to the International Centre for Settlement of Investment Disputes (ICSID) against Greece over its exclusion from emergency liquidity assistance (ELA) in the neighbouring country. Laiki Bank claims to have incurred heavy losses because Greece excluded it from accessing ELA unlike other Greek banks during the crisis of 2012. Laiki was wound down according to the terms of Cyprus’ €10 billion bailout. Not being able to access ELA for its Greek branches, Laiki relied on the Bank of Cyprus. Some €9 billion in ELA that Laiki (the parent company in Cyprus)  drew in 2012 were returned to Bank of Cyprus. Reports said over half of that was used to finance the lender’s Greek operations.

Laiki had appointed SKADDEN, ARPS, SLATE, MEAGHER & FLOM (UK) LLP to submit a notice of dispute to the Greek Government on 21 November 2012 arguing that on the basis of the Greece-Cyprus BIT, its Greek banking operations ought to receive equal treatment to other Greek banks, and be allowed to access ELA via the Bank of Greece. It claims to have suffered significant losses as a result. Failing a satisfactory response from the Greek side, Laiki commenced proceedings at ICSID on 16 July 2014.

The claimant is represented by Joseph Hage Aaronson (London, U.K.) and Markides, Markides & Co, (Nicosia, Cyprus). Greece is represented by Cleary Gottlieb Steen & Hamilton, who also represent the respondent in Poštová banka, a.s. and ISTROKAPITAL SE v. Hellenic Republic (ICSID Case No. ARB/13/8). For commentary on the latter case click here.

The appointed arbitrators are Juan FERNÁNDEZ-ARMESTO, Philippe SANDS and Giorgio SACERDOTI.

This is bound to be an interesting case, so keep coming back for updates.




2 thoughts on “ELA dispute comes to ICSID: Laiki vs Greece

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