French court clears Cyprus on FBME case
France’s highest court has brought an end to the $1.4 billion legal battle over the resolution of FBME Bank, ruling that the Central Bank of Cyprus (CBC) acted prudently and did not breach any obligations under a bilateral investment treaty between Cyprus and Lebanon.
In July 2014, the CBC placed FBME under resolution following the US Treasury Department’s designation of the bank as a financial institution “primarily involved in money laundering.”
According to the Legal Service of Cyprus, the French Court of Cassation upheld the 2019 arbitration decision, ruling that the CBC’s actions were justified. The court confirmed that Cyprus did not violate any terms of the bilateral treaty.
The ruling marks the end of the $1.4 billion claim by FBME shareholders against Cyprus, per the Legal Service. With the verdict, the claimants no longer have any legal recourse to annul the arbitration award. The court reaffirmed the March 2022 decision of the Paris Court of Appeal, which had rejected the claimants’ request to annul the January 2019 arbitration ruling that dismissed their claims. The Paris court had determined that the arbitration tribunal upheld international public policy in rejecting the claimants’ arguments.
