The family of a severely disabled, quadriplegic Greek woman is pleading with the government of Cyprus to release nearly €5 million awarded to them in March by the International Centre for Settlement of Investment Disputes (ICSID). The funds are urgently needed for the round-the-clock care of their daughter, who suffered irreversible brain damage at age three due to a botched medical procedure.

Despite the ICSID tribunal stating that "the validity of and duty to comply with an award are clear," the Cypriot government has refused to honor the judgment. The family has appealed directly to Cyprus President Nikos Christodoulides and attorney general George L. Savvides to release the money.

Legal Proceedings and Government Response

In July, four months after the ruling, Cyprus moved to have the award annulled. The government claimed that the Bilateral Investment Treaty (BIT) between Greece and Cyprus, dating from the early 1990s, was "inoperative" during the dispute. However, the BIT was fully in effect at the time.

The case is captioned Adamakopoulos and others v. Cyprus (ICSID Case No. ARB/15/49). Claimants are represented by Grant & Eisenhofer, Kessler Topaz Meltzer & Check, Kyros Law, Fietta, and Chrysthia Papacleovoulou. The government of Cyprus is advised by Curtis Mallet-Prevost Colt & Mosle.

Background on the Dispute

The investment dispute originated from the Greek debt crisis and the subsequent Cyprus banking collapse in 2012-13. Investors in Laiki Bank and Bank of Cyprus alleged illegal confiscation of funds during the €10 billion bail-in of the Cypriot banking system. Unlike a taxpayer-funded bailout, a bail-in forces investors and depositors to provide funding to recapitalize a bank. ICSID registered the case in 2015.

Although Cyprus exempted many charities from the bail-in, it denied this family’s request for a humanitarian exemption. The ICSID tribunal found that the government’s conduct failed to provide fair and equitable treatment, violating international law.

What the Numbers Show

The core divergence in this case lies between the legal obligation established by the ICSID tribunal and the political resistance from the Cypriot state. While the €5 million award is legally binding under international arbitration rules, the government’s decision to pursue annulment on grounds previously rejected by the tribunal highlights a conflict between treaty obligations and domestic policy preferences regarding investment disputes.

London-based Stephen Fietta KC, representing the family, stated that Cyprus’s application "shows that Cyprus’ pathological hostility to investment arbitration... knows no bounds." John Kyriakopoulos of Kyros Law added that the government is "spitefully holding hostage an ill and permanently disabled young woman—all over a comparatively small amount of money in the grand scheme."

Grant & Eisenhofer senior counsel Alice Cho Lee urged President Christodoulides to release the funds, noting that the government’s arguments have been "routinely rejected."

C. Savva & Associates, a firm specialising in Cyprus company formation, has issued guidance on the implications of the 2026 corporate tax reform for international investors and companies. The assessment details how the reformed framework, effective since 1 January 2026, affects entities operating across borders. The reform aligns the jurisdiction with international tax standards while aiming to retain incentives for international business.

The central measure of the reform is an increase in the corporate income tax rate from 12.5 percent to 15 percent. This change brings the jurisdiction into line with the global minimum tax rate established under the OECD Pillar Two framework. The firm noted that the higher headline rate reflects a wider international trend, as the reform retains exemptions and incentives that support international structures.

The reform also introduces several changes to tax treatment and incentives. The special defence contribution on dividends received by individual residents has been reduced from 17 percent to 5 percent. Deemed dividend distribution rules for profits arising from 2026 onward have been abolished. Additionally, the 120 percent super-deduction for qualifying research and development expenditure has been extended to 2030, and the period for carrying forward tax losses has been extended.

Changes to the definition of corporate tax residency are also a key component of the reform. From 1 January 2026, a company incorporated under the Cyprus Companies Law is treated as tax resident in the jurisdiction unless an applicable double taxation treaty provides otherwise. Companies that transfer their registered office to the jurisdiction are treated in the same manner. The firm observed that this revised test reduces uncertainty regarding the location of management and control.

The managing director of C. Savva & Associates commented on the reform. "The direction of the reform is consistent with what international standards now require, and the framework has been designed to preserve the features that have made the jurisdiction attractive for many years," the managing director said. "For most clients at this stage, the priority is a careful review of existing arrangements rather than any change of direction."

The firm indicated that the reform has practical consequences for the groups it advises, including international entrepreneurs and private investors. Existing holding and trading structures may require review to confirm efficiency under the new rules. Dividend planning warrants particular attention where profits were retained in earlier years and fall under previous rates during the transitional period.