A 1999 judgment for Barclays, enforced by its successor

A guarantor against whom Barclays obtained judgment in 1999 argued, eighteen years later, that Hellenic Bank had no right to enforce it, because Hellenic Bank had never been a party to the case. On 9 October 2026 the Court of Appeal rejected that argument unanimously. The judgment passed to the acquiring bank by force of law, and an action asking the court to declare otherwise was an abuse of process and barred as res judicata.

The decision, Charbonded Ltd v. Themis Portfolio (S1) Management Holdings Limited, concerns every borrower and guarantor whose loan has moved from one bank to another.

One loan, nearly four decades

In 1989 Barclays Bank Plc lent 250,000 Cyprus pounds to a company, M.A. Goodvalue Suppliers Ltd. Charbonded Ltd was one of the guarantors, and the loan was also secured by a mortgage over the borrower’s property. Barclays sued in 1995. By an agreement of 1 April 1996, Hellenic Bank acquired the Cyprus business of Barclays, with the transfer taking effect on 30 April 1996, and the acquisition was published in the Official Gazette in 1997.

The case continued in Barclays’ name. On 7 January 1999 the Nicosia District Court gave judgment for 223,695.08 Cyprus pounds, with interest at 9 per cent, against the borrower and the guarantors, and ordered the sale of the mortgaged property. The Supreme Court dismissed the appeal in 2001. It was admitted that the guarantor had paid nothing since.

In January 2017 Hellenic Bank served a Form Θ notice under Part VIA of Law 9/1965 to sell the property. The guarantor then sued Hellenic Bank, asking for a declaration that it was not entitled to enforce the 1999 judgment, because its contract had been with Barclays and not with Hellenic. The District Court dismissed the action on preliminary points in January 2020. During the appeal Themis Portfolio (S1), to which the facilities and their securities had since been transferred, took Hellenic Bank’s place.

The acquiring bank steps into the judgment

The Court relied on the Transfer of Banking Business and Securities Law of 1997, Law 64(I)/1997, which has effect from 1 January 1996. Under section 4, at the time of transfer the transferred business of the acquired bank passes to the acquiring bank. Section 6 provides that any action or proceeding, and any right of action, existing or pending at the time of transfer is not ended or interrupted, and may be continued or enforced by or for the acquiring bank as it could have been by the acquired bank.

So whatever rights Barclays obtained under the 1999 judgment passed to Hellenic Bank, which was entitled to enforce it. It made no difference that the transfer happened before the judgment was given, or that Hellenic Bank never joined the case. The 2001 appeal, which held that the agreement between the two banks did not affect the guarantors’ contract with Barclays, did not take away Hellenic Bank’s right to enforce.

A change of bank does not wipe out a judgment. The bank that acquires the business acquires the right to enforce it.

Why the action failed before trial

The Court agreed that the claim could be decided on preliminary points. No application had been filed for that, but a court may raise a point of law of its own motion. The facts were admitted, so no evidence was needed.

On the substance, the guarantor had identified no cause of action against the bank. It was asking for a negative declaration, that the bank could not use rights the law gave it. Section 41 of the Courts of Justice Law, Law 14/1960, gives the court power to make declarations, but a negative declaration is granted only in exceptional circumstances, and the courts do not answer academic questions. The claim was an abuse. It was also res judicata: the same loan had been decided between the same parties, the acquiring bank standing as successor to Barclays. The appeal was dismissed with 5,100 euro costs.

What this means in practice

If you guaranteed a company’s loan or borrowed yourself, and the lender has since been acquired or your loan has been sold to a servicer, assume that any judgment against you can be enforced by whoever now holds the loan. The Court did not treat the passage of time from 1999 to 2017 as an obstacle on the arguments it heard. The 1999 judgment carried interest at 9 per cent a year until payment, so an old judgment debt can be much larger than the sum first awarded.

When a notice arrives from a bank or company you never dealt with, the useful questions are concrete ones. Ask for the chain of transfer from the original lender, for the statement of account, and for the date and terms of the judgment. Then check the deadlines in the notice itself. Under Part VIA of Law 9/1965, a challenge to a sale notice is made by appeal within the time and on the grounds that Part VIA sets, not by a fresh action asking the court to declare that the new holder has no rights.

The trap is to spend years on an action that cannot succeed while the debt grows. Here the action was filed in 2017 and finally dismissed in October 2026. A guarantor with a real defence, such as a payment not credited or a defect in the notice, should raise it in the procedure where it can win.

Our litigation practice acts for borrowers and guarantors facing enforcement of old judgments, and our property team deals with Part VIA sale notices on mortgaged land.

Sources

• Charbonded Ltd v. Themis Portfolio (S1) Management Holdings Limited, Civil Appeal 59/20, Court of Appeal of Cyprus, 9 October 2026
• The Transfer of Banking Business and Securities Law of 1997, Law 64(I)/1997, CyLaw
• The Courts of Justice Law of 1960, Law 14/1960, consolidated text, section 41, CyLaw
• The Immovable Property (Transfer and Mortgage) Law of 1965, Law 9/1965, consolidated text, Part VIA, CyLaw

Kleanthous & Platis LLC Registered law company Cyprus Bar Association HE 441973

Further reading

This article is for general information only and does not constitute legal advice. Laws and their application can change, and individual circumstances differ. For advice on your own matter, contact Klitos Platis at klitos@kleanthousplatis.com.

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