Cypriot property investors will be battling it out with the banks who issued Swiss franc loans to buy properties in Cyprus with the first cases scheduled for March, FTAdviser can reveal.
Judicare, a legal firm acting on behalf of more than 200 buyers, had filed 145 law suits against Alpha Bank in Cyprus, where hearings were originally scheduled for October.
Christos Triantafyllides, lead counsel for law firm Triantafyllides and Christoforou, who is representing the actions Judicare in Cyprus, told FTAdviser: “Clients will be having their cases before the courts of Cyprus.
“We estimate they will start in late March and that is when we expect the hearing to begin and that is those cases that we received in 2011.
“I expect the case will be on trial status for two to three months and I estimate a judge will make a decision four to six months later.”
The claim is one of two, with law firm Maxwell Alves Solicitors having filed High Court action on behalf of “well over a thousand” investors with “substantial claims” against the Cypriot arm of Greek banking group Alpha Bank and 24 associated property developers.
The banks are challenging the jurisdiction of the English court in this case and, although it has been upheld, the decision has been appealed and the hearing was stayed until January, Shauna Lewis, partner at Maxwell Alves, added.
“It appears that a further stay has been agreed for a few more months. We are waiting for confirmation.”
The large majority of the claims currently issued are against Alpha Bank. The law firms have alleged as many as 35,000 customers could have been mis-sold Swiss Franc mortgages and are facing demand for huge mortgage payments and threats of UK litigation.
Alpha Bank did not respond to requests for comment.
Both firms previously told FTAdviser that Cypriot banks were offering investors a discount of between 25 per cent and 40 per cent on the current balance of their loan. Mr Triantafyllides said this is still the case.
While the banks are willing to convert the loan to euros and minimise installments, they want to issue “new loans”, he said, adding that the problem with this is some clients would not comply with affordability regulations due to their age and income.
Stylianos Christoforou, Cypriot barrister at Judicare, said UK consumers had to take out Swiss Franc mortgages “as the bank would not give them any other option” and that due to currency fluctuations they have seen monthly installments treble from £400 per month to £1,000-£1,200 per month.
According to George Kounis, consultant at Maxwell Alves Solicitors, British purchasers of properties in Cyprus have €1.6bn of loans outstanding. He said balances have grown because Swiss Franc loans appreciated in value against the euro while property values fell steeply.
Mr Triantafyllides emphasised that any individual success may not have implications for other cases as there are number of issues being raised which are not the same in all instances.