Polly Peck case fails: Administrators facing costs of pounds 1m over action against Cypriot bank

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The Independent Online
THE ADMINSTRATORS of Polly Peck International will have to pay costs of nearly pounds 1m to the Central Bank of Northern Cyprus after the Court of Appeal threw out its legal action against the bank.

The administrators, led by Christopher Morris, of Touche Ross, are attempting to sue the Central Bank for pounds 45m transferred through it from Polly Peck to a Cypriot bank controlled by Asil Nadir, the former chairman of Polly Peck who is facing fraud charges.

The Appeal Court decided, by two votes to one, to reverse a previous High Court decision that there was a 'good arguable' case to answer in the UK courts. Touche Ross said it was disappointed and is seeking leave to appeal to the House of Lords.

Meanwhile, it has been told it has to pay a large proportion of the Central Bank's costs, which are in excess of pounds 1m. In addition Touche Ross, its solicitors Alsop Wilkinson and its barristers are believed to have run up a bill of nearly pounds 4m in the case.

David Janney, a partner at the solicitors Theodore Goddard, acting for the Central Bank, said: 'I hope Christopher Morris now accepts that his case against the Central Bank is mistaken. It was not improved by claiming that the Central Bank was fraudulent and active in money laundering.'

The Central Bank is now pressing Mr Morris for a retraction and apology. 'Fraud is the worst allegation that could be made against a bank,' said Mr Jannay.

The action against the Central Bank may inhibit the adminstrators' work in Northern Cyprus, where Mr Morris's co-administrator, Richard Stone, and Michael Jordan, of Coopers & Lybrand, are trying to sell assets owned by Polly Peck.