In a judgment delivered on 24 September 2026, the Cyprus Court of Appeal upheld the dismissal of a USD 99,353.25 investment loss claim arising from an investment portfolio held with US brokers. The outcome turned on the Trading Authorization, related correspondence and documentary evidence identifying who had authority over the relevant investment decisions.

The investors alleged that a Cyprus company had assumed responsibility for managing their overseas portfolio and was responsible for instructions that resulted in the liquidation of their shares. The Court upheld the first-instance finding that the relevant individual had instead been appointed personally as the investors’ agent and that the claimants failed to establish that the company had assumed the contractual obligation alleged against it.

Who assumed responsibility for the investment portfolio?

A central document was a “Trading Authorization” relating to the investors’ account with the US brokers. It identified an individual working for the Cyprus company as the investors’ agent and was signed by the investors and the individual as “Authorized Agent”. It contained no acceptance, signature or stamp by the Cyprus company.

The Court also relied on correspondence in which the investors stated that they wished to maintain their relationship with that individual as their “Investment Advisor and Agent”.

The Court of Appeal also endorsed the first-instance conclusion that, even if the company had been appointed as agent, the Trading Authorization did not establish a contractual obligation on the company to manage the US portfolio.

The investors also failed to establish that the subsequent share sales had been ordered by the company. The documentary evidence instead identified the individual agent as having approved or initiated the relevant investment decisions following margin calls.

How must investment losses be proved?

The claim had already failed on liability. The Court of Appeal therefore expressly treated the first-instance court’s observations on the calculation of the investors’ losses as obiter.

It nevertheless observed, also by way of obiter, that a fall in the value of an investment portfolio does not by itself establish legally recoverable damages. Evidence would have been required connecting the value of the shares at the relevant dates with the loss said to have resulted from the alleged breach.

The distinction matters in investment disputes. Establishing that an investment declined in value is different from establishing that a particular breach caused a legally recoverable loss.

What does this mean for investment disputes in Cyprus?

For investors, the contractual and evidential analysis should begin with the contractual and agency documentation: who undertook responsibility for the portfolio, what authority was conferred, who gave or approved the disputed instructions and whether those acts caused the loss claimed.

For investment businesses and financial intermediaries, contractual and agency documents, trading authorisations, correspondence and contemporaneous records of investment instructions may be equally important in determining whether responsibility was assumed by the company or by another person.

Economou & Co LLC advises and represents investors, investment businesses and other parties in investment and financial disputes in Cyprus. An early assessment of the contractual documents, agency documentation, trading records and evidence of loss can often determine whether a viable claim or defence exists and the appropriate course to pursue.