Iceland has won its Court battle with the British and Dutch governments, who were supported by the EU Commission, over not honouring deposit guarantees for savers in Icesave. The EFTA Court dismissed all claims against Iceland, ruling that it had not breached the deposit guarantee directive 'due to the magnitude of the systemic crisis' that Iceland experienced. The Court judgment is now online.
The Court press statement here says:Originally Posted by FT
"The Court held that the Directive did not envisage the alleged obligation of result to ensure payment
to depositors in the Landsbanki branches in the Netherlands and the United Kingdom in a systemic
crisis of the magnitude experienced in Iceland.
How to proceed in a case where the guarantee scheme
was unable to cope with its payment obligations remained largely unanswered by the Directive. The
only operative provision that deals with non-payment is Article 7(6) according to which depositors
have the possibility to bring an action against the responsible scheme.
An action against or an
obligation on the EEA State in question, though, was not envisaged in the Directive’s provisions."
Moreover, neither case law nor a comparison with secondary law supported the first plea.
Iceland is nevertheless making certain payments in relation to the matter. The scope and impact of the ruling remains to be seen. The FT - which describes the result as unexpected - maintains it may have only limited impact.
Iceland wins UK compensation battle - FT.com