Successful recovery of €9 million through garnishee proceedings in Cyprus

Harneys secured a significant recovery of approximately €9 million for our client through garnishee (attachment of debt) proceedings against two major banks in Cyprus. Under Cyprus law, a payment order in garnishee proceedings can be issued when: the claimant is a judgment creditor and can demonstrate that the judgment debt remains unsatisfied; there is a creditor-debtor relationship between the judgment debtor and the garnishee; and the Court exercises its discretion in favour of the claimant. A complicating factor in this case was that, out of the €9 million, substantial sums were held in bank accounts in the names of third parties, as a means to alienate or conceal funds. In Cyprus, funds held in the name of third parties can be subject to garnishee proceedings, if it can be proven that the judgment debtor has a beneficial interest in those funds. The third parties must be properly served with the proceedings, in order to be given the opportunity to appear before the Court and be heard. The Court concluded that the third parties were indeed holding the funds for the benefit of the judgment debtors and ordered the banks to transfer the funds to our client. This result not only marks a major success in our ongoing efforts to enforce the judgment in question, but also highlights the critical role of strategic legal action in recovering debts, particularly when the assets are concealed through third parties.