WHILST there has been some pre- occupation with the case of Barclay-Watt and others v Alpha Panareti and others [HQ11X02379] another equally significant case, that of Marshall v Bank of Cyprus has gone largely unnoticed.
In the latter case, brought by Christofi Law in Cyprus on behalf of Mrs Marshall, substantially the same issues were raised on application in the Cypriot courts to determine whether they had jurisdiction to hear cases relating to Cyprus property buyers who are domiciled abroad, usually in the UK.
In the High Court case against Alpha Panareti, the case reached the courts on 20 July 2012 and judgment was handed down on 23rd November. The judgment, made by Master Whittaker contained a number of reservations and qualifications which narrow down the class of people able to bring actions via the UK, but for the Barclay-Wyatts and their co-claimants, whose action revolved around very specific facts relating to Alpha Panareti sales, the outcome was that they had the right to bring their action in the UK provided that it was brought within a six year limitation period.
The outcome of the Marshall Case throws cold water on that. The case – described by one of the participants as “trench warfare” – involved the Cypriot District Court receiving skeleton arguments from each side’s respective counsel exceeding 20 pages of references, and the judgment, eventually delivered on 31 January 2013 by Judge David consisted of 20 pages. Judge David ruled that the correct jurisdiction was… The Republic of Cyprus.
The outcome means that there is a conflict of laws between the British and the Cypriot courts. Five of the Barclay Wyatt Claimants actions were commenced in Cyprus. Moreover there are issues over the seniority of the judgments – the Judge in the Cypriot Court is likely to have greater seniority than the Senior Master in the High Court – so observers can expect legal “hand bags” when the two clash.
Mrs Marshall’s case is directly against the Bank and involves the misselling of Swiss Franc Foreign Currency loans unlike the Barclay-Watt case, where no claim was brought by the lawyers against the bank.
Mrs Marshall has appealed the order and has vowed, if necessary, with the support of Christofi Law, to take the matter to the European Courts. The likelihood is that her case will reach Europe before any further substantive issues are dealt with in the Alpha Panareti case.
Editor’s note
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction apply to a given dispute. The rules typically apply when a legal dispute has a “foreign” element such as a contract agreed to by parties located in different countries.
Of course the big question here is: Will any judgement made in UK/Cyprus be enforced in the other country according EU law?
I suspect we in the UK will tow the line whilst Cyprus???
A great deal also depends on which EU/local law suits the judge that day. I suspect the jurisdiction argument could go on for many years without resolution.
Who’s to say the UK courts will be more sympathetic than Cyprus? I have had my experience of both and so far the UK system is far worse than Cyprus, not to say FAR more expensive.
One major consideration in the Marshall case is whether the UK and Cypriot courts are likely to come to essentially the same verdict. History suggests, however, that a case heard in the UK would tend to look sympathetically at evidence of misselling, to the extent that the complainants can sometimes seem to be mollycoddled, whereas it is virtually unknown for this to happen in Cyprus, especially in property transactions, even where there is prima facie evidence.
Buying property overseas can be full of elephant traps, especially in Cyprus, and this appears to be another one. All my Cyprus contracts specify Cyprus as the applicable jurisdiction in the event of a dispute, so I hope I won’t be obliged to dispute anything.
@Peter Davis – I do not accept that most lawyers are developers – some yes.
The island is small and businessmen in one town may well know each other. That is why I suggest that those buying property use a lawyer in a different town – preferably one on the list provided by the British High Commission in Nicosia.
The lawyer I used when buying my house was a friend of my developer, and the lawyer was also a developer in her own right. The Island is so small, only 800,000 inhabitants, it makes sense for those in business to know others.
As most lawyers are also it appears, developers, is it a case of. “This could also be me” and there by the grace of God.
So how balanced and fair is a decision of the court?
I don’t see the relevance of which judge is senior over which as it is not relevant.
It is the courts in which decisions are made that makes them binding on other courts and as there is no lower court than the District Courts in Cyprus decisions made in them cannot bind any other court.
I am also puzzled by the statement that Mrs Marshall will take this all the way to the European Courts. She may eventually, of course, end up taking her claim to the European Court of Human Rights but as a typical case takes 4 years to see through then the assertion that it will be before any decision in the Alpha Panareti case is possibly strictly accurate.
As for the European Court of Justice, then Mrs Marshall cannot take her case there. They are not an appeal court. Only courts can refer decisions to them for their interpretation.
The Brussels 1 Regulations are very specific in regard to the requirements for bringing actions when there is a cross border element.
The normal default is that a Defendant has the right to be sued in their country of domicile but there are exclusive jurisdiction clauses and also specific provisions where consumers are bringing a claim and then, by the very nature of being a consumer it is in relation to contract law.
Any tort action, ie. actions for negligence etc must take place in the country where the harm occurred, although not relevant in this matter.