By Thanasis Gavos – London
A long-standing dispute over the mortgages sold to British buyers of property in Cyprus has been brought before the UK courts in recent weeks, with lawyers acting on behalf of the plaintiffs claiming that they should benefit from EU law protecting consumers.
Thousands of investors claim that they were mis-sold mortgages in Swiss francs in Cyprus, as well as that they were required to improperly sign power of attorney documents in order to have the loan agreements completed.
In a move concerning more than 200 of those cases, Maxwell Alves Solicitors have filed a class action suit in Britain against Alpha Bank Cyprus, the lender that issued the disputed mortgages and 24 property developers in the island. A previous similar action concerning jurisdiction brought forward in the UK by another London-based law firm was initially vindicated, but an appeal is pending.
George Kounis, a solicitor with Maxwell Alves, expressed his confidence that his clients will be granted UK jurisdiction. “There is the issue of cross-border selling that is relevant to these cases, we have the mis-selling part of the story which has been highlighted recently in European countries and also the Swiss franc aspect of the mortgages, which has prompted similar legal cases in European countries such as Croatia and Hungary,” he told IBNA.
“If you want a customer in another country, you have to respect the customer rights granted in that country. It’s what the EU says,” added Mr Kounis referring to the decision to file action in the UK. He estimated that a final verdict on jurisdiction should be reached around June 2014.
Clients of Maxwell Alves and other investors involved in the dispute over transactions between 2003 and 2008 claim that they were nor presented with the full facts and dangers of the transaction. They have been described as “captives” of terms they cannot meet, due to the fluctuations of the Swiss franc and the fact that title deeds in Cyprus are often used as collateral against loans taken out by developers. The UK Cypriot lawyer added that in most cases the developers involved did not deliver what the purchase deal stipulated, either in terms of the property itself or of amenities.
In a parallel development, a group of other British property buyers have secured various dates between October and December 2013 for a legal challenge of the transactions in Cypriot courts. In an emailed statement, Stylianos Christoforou of Nicosia-based Triantafyllides & Christoforou law firm, which represents a number of the claimants, told IBNA that the legal actions aim to void the loan agreements either because they were signed via a void power of attorney or because of a breach of the local lending law.