202505.27
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Supreme Constitutional Court has ruled

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Legal precedent:

  • Lawyers have the right of recourse to the Administrative Court against decisions of the Supervisory Authority on the basis of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007 No. 188(I)/2007 (the “ Law”)
  • The same remedy is available to all “obliged entities” falling in the field of application of the Law

Dr. Marina Himoni

The intervention of the Supreme Constitutional Court  was deemed necessary by virtue of Section 9(2)(c) of the Administration of Justice (Miscellaneous Provisions) Law of 1964 – Law No. 33/1964, on legal matters which arose from decision of the Court of Appeal and which are connected with the need for correct interpretation. Particularly for the purpose of determining the nature of the actions of the Cyprus Bar Association (“the Council”) in its capacity as the Supervisory Authority in light of and within the meaning of Articles 21 and 59(1)(e)2 of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007m Law No. 188(I)/2007 (hereinafter “the Law”) and Article 146.1 of the Constitution.

The Supreme Constitutional Court of the Republic of Cyprus has unanimously overturned on 21st of May of 2025 the decision of the Supreme Court acting as Administrative Court of Appeal and the 1st instance decision of the Administrative Court, ruling that the reasoning of the Appeal Court as to the fine imposed by the Cyprus Bar Association to a law firm acting as a Supervisory Authority within the meaning of Articles 21 and 59(1)(e)2 of the Law and Article 146.1 of the Constitution was wrong.

The Supreme Constitutional Court particularly held that there is a clear distinction between the decisions and sanctions of the Bar Council acting in its capacity as a Supervisory Authority which fall within the domain of public law and therefore in the jurisdiction of the Administrative Court and decisions made in its capacity as the professional body of lawyers within the domain of private law which are adjudicated through civil claims before the District Court.

The Background of the Case

The Supreme Constitutional Court examined a legal issue raised by our Law Firm in relation to a fine issued by the Council in its capacity as the Supervising Authority for violations of the Law. Our Law Firm had initially filed a recourse to the Administrative Court on 22/03/2023 seeking annulment of the Council’s decision to impose a fine of €16.000 for violations of Law as applicable at the disputed time. The Administrative Court, in its ruling dated 24/07/2023 accepted a preliminary objection raised by the Council and dismissed the appeal as inadmissible concluding that the Council does not exercise executive or administrative functions that would fall under the jurisdiction of the Administrative Court.

The Administrative Court of Appeal (hereinafter “The Court of Appeal”) where our Law Firm subsequently appealed, upheld the lower Court’s decision agreeing that “the Administrative Court does not have jurisdiction to review the challenged decision of the Council. The Court of Appeal’s central reasoning was that the Council’s authority is not of an administrative nature but “relates to the functioning of the justice system” as previously interpreted in case law. As a result of this decision and the conclusion that the Administrative Court lacked jurisdiction over the Council’s decision, our Law Firm filed an Application seeking to permission to raise legal issues before the Supreme Constitutional Court.

Ruling of the Supreme Constitutional Court

The Supreme Constitutional Court found that, based on Section 59 of the Law the Council, along with other authorities acting as Supervisory Authorities under the Law, clearly exercises authoritative and sovereign powers for public purposes, extending beyond the professional framework of the Association. The scope of the Law covers various Supervisory Authorities (a total of nine) all of which exercise sovereign power for the same purposes. It would be contrary to the Law if an act (same in purpose and content) to bear different legal protection – outside the scope of the judicial review – depending on which Supervisory Authority issues it.

The power to impose administrative fine is the same and common for all Supervisory Authorities that are established by virtue of Section 59 of the Law and not with the strict purposes of the Advocates Law (CAP. 2). The Supreme Constitutional Court criticized the interpretation of the Court of Appeal, stating that it remained confined to the framework of the Advocates Law and did not sufficiently consider the provision of the Law which clearly refers to acts of an administrative nature.

The absolute interpretation provided by the Court of Appeal, said the nine judges of the Supreme Constitutional Court based on the case law relating to other types of actions by the Cyprus Bar Association and its bodies does not convince us. The Court of Appeal wrongfully held that the designation of the Council as a Supervisory Authority “does not necessarily mean it operates within the sphere of public administrative law due to the nature of its actions…”. Furthermore, the Supreme Constitutional Court disagreed with the statement that the term “administrative fine should be interpreted in the broader common sense and not in its narrow legal meaning”.

It is clear from the wording of the Law – based on its literal interpretation which should have been given effect– that the imposition of an Administrative Fine by any Supervisory Authority constitutes an enforceable Administrative Act, imposed for the purpose of serving the public interest, with a clear distinction between administrative and criminal sanctions.

The Supreme Constitutional also disagreed with the Court of Appeal’s (and the lower Court’s) view that the Council’s act constituted a quasi-judicial act because it was, in its opinion, inherently linked to the administration of justice. Such an interpretation, the Supreme Constitutional Court ruled, clearly contradicts the Law.

According to the Supreme Constitutional Court, Section 59(6)(b) of the Law should not be neglected as following the imposition of administrative fine, the person or entity is referred from the Supervisory Authority to the responsible Disciplinary Body which decides accordingly. This on its own indicates that the Supervisory Authority is not identified with the professional body as the Cyprus Bar Association has such power on the basis of Section 17(3)(c) of the Advocates Law (CAP. 2). The Legislator additionally grants to the Council the power to refer to the responsible Disciplinary Body because obviously it regards that the Council does not have it a priori.

Consequently, the Supreme Constitutional Court overturned both the appellate and the lower Court decisions and remitted the case to the Administrative Court (before the same judge) for the recourse to be examined.

We should not disregard, that the judgment of 21/05/2025 of the Supreme Constitutional Court is one of general public importance as it concerns all members of the Cyprus Bar Association, particularly with respect to the right to legal recourse against a conviction or penalty imposed by the Supervising Authority. The same remedy is available to all the obliged entities falling in the field of application of the Law.

For further information on this topic please contact Dr. Pavlos Neofytou Kourtellos and/or Dr. Marina Himoni at P. N. KOURTELLOS & ASSOCIATES LLC, by telephone: +357 25 745575 or by e-mail: pnk@kourtelaw.com and/or mh@kourtelaw.com

Disclaimer

This publication has been prepared only as a general guide and for information purposes. It does not constitute or should not be read as a legal advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.