The Icelandic High Court has just ruled on whether deposits are priority claims. The ruling implies that the Icelandic Emergency Act, passed on Oct. 6 2008, do not go against the constitution. A ruling that some have called ‘the ruling of the century.’
The ruling comes after several cases where creditors sought to challenge the emergency measures, passed on Oct. 6 2008, which severely diminished the recovery that creditors to to Icelandic banks can expect. These cases had already been through the Reykjavik County Court. The Icelandic High Court has now ruled, as did the County Court, confirming the legality of the emergency laws.
This is the last legal hindrance to pay-outs to creditors from the Landsbanki estate. It is expected that pay-outs can soon start, which means that the Icesave money to the British and the Dutch authorities can now be paid out.
This, however, will not solve the Icesave dispute, since the two countries claim interests since they took loans to cover the payments to their respective Icesave depositors. The UK authorities paid depositors in full, the Dutch up to €100.000. The Icesave dispute is about only the European minimum, €20.000, meaning that the two countries only stand to recover the first €20.000 on each Icesave account.
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