CYPRUS: Cypriot shareholders in UK legal battle over GBP 1.32 mln that disappeared

1 min read

Cypriot shareholders are involved in a litigation case at the High Court of Justice, in London involving payment of £1,320,000 compensation it did not receive following arbitration in a dispute with a UK betting company.

Towerbridge Group Ltd (TBG), a company owned by Cypriot shareholders, registered in the British Virgin Islands with offices in Nicosia is the claimant, and the law firm Duane Morris, which is based in the City, is the defendant. 

According to the claimant company, the defendant’s partner transferred TBG’s funds into third party accounts, without asking the company and, therefore, without its approval.

The money was deposited in Duane Morris' client account and was part of the compensation received by TBG from an English betting company, as a result of an arbitration.

According to the indictment, the money was deposited into Duane Morris' customer account about a month after the settlement was reached. 

Instead of the firm informing the representatives of the Cypriot company that its money had been received and requesting instructions on where to transfer it, it informed a Greek associate, a person appearing as a lawyer, who was loosely involved in the case to assist TBG.  

The alleged lawyer, without informing the beneficiaries of the funds and without any instruction, asked the partner at Duane Morris to transfer £1,320,000 to three companies with bank accounts held in Malta, London and Athens.

TBG claim the money was transferred without advising the owners and seeking for their approval.

When TBG’s shareholders found out what had happened they were allegedly told the Greek associate had a power of attorney to act on TBG's behalf. 

The company asked for specific proxy to be produced that would prove this.

Duane Morris' partner presented an old fax, which, in its short body of text, explained that TBG authorised the alleged Greek lawyer and associate of the English law firm to act on legal matters, relating to the claim.

Duane Morris claims that this fax covers the company legally.

According to sources who have knowledge of the case, the UK high court is being asked whether its permissible for a legal firm, to transfer its client's funds to third-party accounts without a purpose-specific power of attorney or a clear mandate.