Four individuals (the applicants) were employed by N Fasouliotis & Sons Ltd until they were made redundant in 2012. The applicants were also members of the N Fasouliotis & Sons Ltd provident fund (the respondent) up to 2012 when their employment was terminated.

In a letter dated January 1 2013 the respondent requested the transfer of €320,000 from the Bank of Cyprus to pay the applicants' provident fund.

In March 2013 a bailout of Cypriot banks was announced and Bank of Cyprus deposits were affected. As a result, the respondent's deposits suffered relevant damage. Specifically, 47.5% of the provident fund was converted into Bank of Cyprus shares and the remaining 52.5% of the fixed deposits were gradually released.

By May 17 2013 the relevant amount from the provident fund had been paid by the respondent to the applicants. Further payments followed on April 16 2014, May 27 2014, August 1 2014, November 4 2014 and February 7 2015. Following each of these payments, the applicants signed receipts which included the words "on account".

On October 7 2013 the applicants filed a claim with the Industrial Disputes Court seeking payment from the respondent of:

  • any amount due, starting from the date of termination of their employment;
  • any other benefit or amount to which they were entitled under law; and
  • any other remedy that the court viewed as just and equitable.

The respondent rejected the applicants' position and claimed that the results of the March 2013 bailout had been unpredictable and had resulted in a drastic change to its previous economic circumstances. On this basis, the respondent argued that the applicants should also suffer proportional damage. Further, the respondent argued that the applicants could not claim the full payment of the amount owed from the provident fund, as they were estopped by their signature on the abovementioned receipts (ie, estoppel by conduct).


In making its decision, the court examined:

  • when the applicants' right to receive the provident fund had arisen and whether said amount had been affected by the 2013 bank bailout; and
  • whether the applicants had accepted the consequences of the 2013 bank bailout in writing.

As regards the first issue, after referencing the Law on the Establishment of the Activities and the Supervision of the Professional Pension Funds 2012 (Law 208(I)/2012) and the respondent's articles of association, the court stated that it was clear from the facts of the case that the applicants had ceased to be members of the respondent's provident fund from the date of the termination of their employment. Further, the court clarified that neither Law 208(I)/2012 nor the respondent's articles of association imposed any limitation period with regard to the payment of the amounts held by the respondent on account of its members. In the light of the above, the court concluded that the applicants were entitled to claim the immediate payment of the full amount held by the respondent on their account. Moreover, the court rejected the respondent's argument and stated that the applicant's legal rights could not be affected by the 2013 bailout and could, under no circumstances, be connected with the applicant's claim which, as stated above, arose from the date of the termination of their employment, which took place four months before the bank bailout.

As regards the second issue, the court stated that the words "on account" on each of the receipts signed by the applicants reflected the gradual release of deposited amounts following measures imposed on Cypriot banks in March 2013. The court drew on guidance from the Supreme Court ruling in Louis Tourist Agency Ltd v Antigonis Elia ((1992) 1 CLR 98) in which it was stated that the waiver of a legal right due to a beneficiary's conduct could occur only if said conduct suggested the unequivocal abandonment of such a legal right. Following an examination of the receipts, the court rejected the respondent's argument for estoppel.


Based on the above, the court decided that the applicants were entitled to receive the amount that had been lost as a result of the 2013 bank bailout – in particular, the remaining 47.5% of the provident fund which, as stated above, had been converted into Bank of Cyprus shares.

For further information on this topic please contact Michalis A Hadjigiovanni at George Z Georgiou & Associates LLC by telephone (+357 22 763 340) or email ([email protected]). The George Z Georgiou & Associates website can be accessed at www.gzg.com.cy.