Our law firm, Georgios Diogenous & Associates LLC, successfully secured a crucial interim injunction against the Bank of Cyprus, preventing the sale, forced disposal, or auction of two allegedly mortgaged properties valued at approximately €500,000. The injunction will remain in effect until the final hearing of our client’s lawsuit against the bank, a significant victory for borrower protection in Cyprus.
The Challenge: An Unjust Foreclosure Attempt by the Bank of Cyprus
In this case, our client had obtained a loan from the Bank of Cyprus around 1993, offering his property as collateral via a mortgage. Crucially, after repaying that loan in full, he later secured a second loan, but did not consent to use the previous, already settled mortgage as security for it.
Despite this, the Bank of Cyprus applied to the Court seeking to foreclose the mortgaged property, arguing that the mortgage remained valid for “future obligations,” including the second loan, a common and often contested practice.
Our Legal Strategy: Seeking an Interim Injunction to Halt the Auction
Upon receiving instructions, our legal team took swift action to protect our client’s property rights. We filed an urgent application for an interim injunction to prevent the irreversible harm of a forced sale. We presented strong arguments to the Court, raising serious legal doubts about the mortgage’s validity for the second loan and highlighting the clear risk of irreparable harm.
The Court’s Decision: Upholding Borrower Protection and Property Rights in Cyprus
The Honourable Court, after confirming that the legal conditions for an injunction were met, proceeded to examine the fairness of the case. It ultimately ruled in favour of issuing the order, taking into consideration several critical factors:
- Serious Legal Doubts: The Court found serious legal doubts about the mortgage’s validity for the second loan, as the original debt had been repaid and no new mortgage was signed.
- Irreparable Harm: The Court recognized a clear risk of irreparable harm to the Plaintiff if the property were sold to a bona fide third-party buyer.
- Suitability of Remedy: The Court determined that any sale would render our client’s lawsuit against the bank meaningless, as the Plaintiff would permanently lose the property.
Thus, the Court deemed it just and reasonable to protect the Plaintiff’s property rights through the issuance of the temporary injunction until the lawsuit is resolved.
This decision sets an important legal precedent in Cyprus, demonstrating that Courts can and will effectively intervene to prevent irreversible harm to property owners and protect borrowers against potential abuse by financial institutions.
If you are a property owner in Limassol or anywhere in Cyprus facing foreclosure, a mortgage dispute, or need to protect your assets from a bank, contact the expert banking and finance litigation team at Georgios Diogenous & Associates LLC for decisive legal support.