The Dutch Central Bank and the British Financial Services Compensation Scheme have brought a case against the Icelandic deposit guarantee fund, TIF, at the Reykjavík District Court, Héraðsdómur Reykjavíkur. The Dutch and the British seek a confirmation that TIF was liable for the EU minimum guarantee of €20.000 (which when currency exchange etc is taken in to account amounts to €20.877 for Iceland) and/or TIF should pay out, with interest, in total ISK556bn, €3.55bn. The Dutch are claiming ISK104bn, €660m and the UK ISK452bn, €2.88bn. The case was brought to court already at end of November last year but has only surfaced now in a press release from TIF.
But was the Icesave not finished when the EFTA Court ruled on January 28 last year that Iceland did not need to pay? No, not necessarily. What the court ruled was the Icelandic state was not responsible for guaranteeing the fund. But that does not exclude that the fund was liable and that is what the two countries now want to get a ruling on.
The deposit holders of Icesave have been compensated by their respective governments. The two governments are getting a refund from the estate of old Landsbanki and have already recovered around half of the sum. However, the fact that Iceland refused to end the case with an agreement means that the Dutch and the British governments keep on seeking ways to secure a decision on the payment and the legal status regarding the deposit guarantee fund, TIF, in Iceland. Also, the Landsbanki estate is not paying interests, which is being sought here. Or this is how I understand this latest Dutch UK action.
For those who feel to revise on Icesave here are some earlier Icelogs on this topic: the EFTA Court decision; the ESA case, after the oral hearing; key issues regarding the ESA Icesave case; some reactions to the EFTA Court decision.
*Here is the statement sent out by the FSCS on November 4 2008 (sorry, in the first version it said 2014), indicating how compensation would be paid out for Icesave deposit holders. As can be seen the FSCS fully expected the payment for the first €20.877 to come from Iceland after the FSCS paid it out.
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