3 C.L.R. 1988May 10 [A.LOIZOU,P.] DMTHEMATTEROFARTICLE 146OFTHE CONSTITUTION JEVTROLIMITED, .Applicants, v. THE CENTRAL BANKOFCYPRUS, Respondents. (CaseNo.459187). Reasoning ofan administrative act—May bederivedfrom thematerial inthe file. Dueinquiry—In thiscasetherehasbeenathoroughinquiryintoallrelevantaspectsofthecase. . . . ; 5 JO Exchange Control—The Exchange Control Law, Cap; 199, sections 11and 40—Companylimitedbyshares,with45%foreign participation—Suchparticipationwasallowedonconditionthatitsactivitieswouldberestrictedto mens' and boys' wears—Application for licence to manufacture ladies ' ^ 'wear as well—Refused—The powers and the breadth of the discretionof . theCentralBank underthesaidsections. .| . . ' '. ,. Thefacts ofthiscasesufficiently appearinthejudgmentoftheCourt . Recoursedismissed. No orderastocosts. Casesreferredto: 15 VassosEliades v.TheRepublic
(1976)3C.L.R. 293; 945 Jevtro Ltd.v. Central Bank
(1988)loannidesv.MunicipalityofNicosia
(1968)3CLJ*.551; Mouzourisv. TheRepublic
(1972)3C.L.R.43. Recourse. Recourseagainstthedecisionoftherespondentswherebyapplicants'requestforpermissiontoproduceladieswearinaddition 5 tomen'sandboy'ssuitsinaccordancewiththeirpermitwasnot approved. P.Uveras,for theapplicants. A. EvangeloUySeniorCounseloftheRepublic,fortherespondents. Cur. adv. vult. A.LOIZOU P.read the following judgment. The applicants areacompanyincorporatedinCypruswithlimitedliability. Onoraboutthe24thJuly, 1984,therespondentCentralBank grantedapermittotheapplicantsbywhich45%oftheauthorized ^ andpaidupcapitalofthecompanywastransferred toInternationalHoldingCorporation of Luxembourgwhichis whollyowned by aLibyan ArabForeignInvestment CompanyofTripoli.The termsofthesaidpermitimposed,interalia,theconditionthatthe applicants should confine their activities to the production of ^ men'sandboys'suitsonly.Bytheirlettertotheapplicantsdated the 11th August 1984, the respondents amended the aforesaid conditiontoread: "Thecompanywillconfineitsactivitiestotheproductionof men'sandboys'wearonly asto-day.Exceptwithpermission «the acquisition of shares/share in any other company/ partnershiportheinvolvementinanyotheractivityisnotallowed." 946 10 3 C.L.R. Jevro Ltd. v. Central Bank A. Loizou P. Byaletterdatedthe 16thJanuary 1986,throughtheiraccountantsandaddressedtorespondents,theapplicantsrequestedpermissiontoproduceladieswearaswellbecause: 5 10 15 "(i)Theforeign shareholdersintheapplicants'company felt thattherewasamarketinladiesaswellasmen'swearto beexploited,throughtheirconnectionsandsubsidiaries(with retailshopsanddistributionnetwork)allovertheAfrican continent. "" (ii) The foreign shareholders"in the applicant company wishedtoimportinLibyaladieswearfortheirpersonnel,their familiesandtheLibyanmarket. (iii)Theapplicants wereinformed byorganizations inthe SovietUnion with whomtheywereinclosecontact thatthe supplyofladiesaswellasmen'swearwouldrender feasible future agreementsofsaletothatcountry. (iv)Therewouldbealowerunitcostperitemofclothingin promotional expenses if the salesmen of theapplicantswho travelled abroad couldpromote both ladies aswell asmen's wear. 20 (v)Intimesofcrisisthedemandfor men'swearfallsmuch fasterthanforladieswear,andthereforewithitspresentstatus thecompany'sfinancial conditionwasmoreprecarious." TheaboveletterwasreferredbytherespondentCentralBank ' totheMinistryof CommercearidIndustryfor theirviewswhich Ministrydidnotrecorhmendthesaidapplicationwhichwasthere25 after submittedfor further consideration bytherespondentCentralBank, whichdecided thatitcould notbeapproved because theexpansion of the production of the Company in newitems wouldnotservethefinancial interestsofCyprus. 30 Onthe9thDecember, 1986,theapplicantssubmittedahapplicationforreconsiderationoftheirclaim.Itwasstatedintheirrele947 A. Loizou P. Jevtro Ltd.v. CentralBank
(1988)vant letter that their application was based on the fact thatthe Council of Ministers in its decision No.27.806, dated the 6th November 1986,has specifically permitted 100%foreign partici pation in the case of factories operating in the FreeIndustrial Zone,orinbondedfactories orexclusivelyexportorientedbusi- 5 nesses. Thisletterwas againreferred totheMinistry ofCommerceand Industry andtotheDirectorof Customsfor theirviews.TheDi rector of Customs suggested thattheapplication should becon sidered by thecommitteewhich is incharge of theoperationof JQ bondedfactories undertherelevant legislation. Ontheotherhand the Ministry of Commerce andIndustry, by its letter datedthe 21st March, 1987, informed therespondentCentralBank thatit couldnotalteritsprevious stand. Thereafter the respondent Central Bank as the body having j ^ competenceinthematterconsidered theapplication anddecided that it could notbe approved because it has notbeen persuaded that the proposed widening of the activities of the applicants would servetheeconomicinterestsof Cyprus. The applicants wereinformed of thisdecision by meansof a 20 letter of the respondent Central Bank, dated the 31st March, 1987.Following thereceiptofthislettertheapplicants challenged the above by means of this recourse on thefollowing twomain grounds (a)lack of duereasoning and(b)absence of dueinquiry. Learned counsel for the respondent Central Bank submitted that thereasoning of an administrative decision can be supple mented by the material in thefile and that in this case there is morethanample materialinthefileof theadministration which supplemented thereasoning of the sub judice decision. Here ferred metotwominutes, datedthe27thJune1986,andthe27th ^ March, 1987, signed by an official of the respondent Central Bank Mr.- Hadjigregoriou, - andaddressed totheSeniorManag er of theExchange Departmentof theCentralBank. Appendices A andΒrespectively. 948 25 3C.L.R. Jevtro Ltd.v.Central Bank A. LoizouP.. In thefirst minutethecompetent officer Mr. Hadjigregoriou dealsfirst with the history of thematterand goesontosuggest thattheapplicationshouldberejectedonfourgrounds,namely: 5 10 "(a)Thatbeforethegrantofthepermitforforeignparticipation,the whole production of the company related tomen's andchildren's wear. Ourpermit has notdifferentiated negatively theproductionoftheCompanysimplyasitwassubmittedinitsoriginalapplicationdated 17thJanuary 1984,theintentionoftheCompanyforexclusivelyexportorientationand/ orformaintainingtheexportmarketsofitsproductsaswellas fortheincreaseoftheexportsoftheCompanywouldhenceforth constitute and soconstitute ourown exchange control conditions.InadditiontheimprovedproductivityoftheCompanyoftheproductshithertoproducedbyithaveimprovedthe financial positionoftheCompany.·• 15 (b)TheredoesnotexistaquestionofviabilitybythenonapprovaloftherequestoftheCompanyonthebasisofargument
(5)intheletterofCoopersandLybranddated 16thJune, 1986 , 20 25 (c)Iaminformed byMr.P.Koutouroushis,DirectorofIndustry intheMinistryofCommerceandIndustrythattheapplicantsdonotacceptthetermexcludingexporttoLibyainrespectofthenewproductsoftheCompany (d) Approval of therequest of the Company wouldvery probablyaffect negativelyotherCyprusindustrieswhichtraditionallyduringthelastyearsdealmainlywithexportsofmen's weartoLibyawithunknownrepercussionstotheeconomyof Cyprus." Andtheminutegoesontosay: 30 "OnthebasisoftheabovemattersIbelievethatthegrounds invokedbytheCompanyinsupportofitsrequestcannotstand whilstthenegativestandoftheMinistryofCommerceandIn'949 A. Loizou P. Jevtro Ltd. v. Central Bank
(1988)dustry is absolutely justified. It should be stressed here thatthough the Ministry in its above letterspeaks of rejection of therequestof the Company, such areference should beconsidered as a recommendation only andthatthecompetentauthority todecidefinally onthe 5 matteris theCentral Bank." In theminute Appendix ΒMr.Hadjigregoriou refers again to the history of the matter and to the aforesaid decision of the Councilof Ministerswhichwasinvoked by theapplicantsin sup portof theirapplicationandgoesontosay: 10 "We notethatthedecisionoftheCouncilofMinistersdated the 6th November 1986, specifies theprocedure and frame work forconsiderationof applicationsforforeign participation inprojects inCyprus andtherearemaderecommendationsto the competentGovernment Services for theconsideration of 15 suchapplication. With regard tothenew applicationof theCompanywebe lievethattherelevantdatahavenot beendifferentiated insuch amannerastodictateachangeofourprevious decisiondated the 28th September 1986. Rejection of theapplication is not 20 inconsistentwith thedecisionof theCouncilof Ministers. On thebasisof theabove werecommendrejection of theapplica tion datedthe9thDecember, 1986." Goingthroughthetextof theabovedocuments,thatis Appen- 25 dices A andB,Ifindthatsameis adequateandduereasoningof thesubjudice decision.Itis by nowwell settled (VassosEliades v. TheRepublic
(1976)3C.L.R.293;Ioannidesv. TheMunici pality of Nicosia
(1968)3 C.L.R. 551; and Mouzourisv. The Republic
(1972)3C.L.R.43),thatthereasonsfor which adeci sionis takenmay appearinthefileof thecase.Inviewof thisle- 30 gal positionitcannotbesaid thatthesubjudicedecisionlacksdue reasoning.Therefore thisgroundfails. 950 3C.L.R. 5 JevtroLtd.v.CentralBank A. LoizouP. Coming now tothe groundof lackof dueinquiry, from the materialinthefile,itismorethanclearthattherespondentCentral Bank not only inquired intothematter themselvesbutalso soughtfor andobtainedtheviewsoftheMinistryofCommerce andIndustrybeforedecidingfinallyonthematter.Itisalsoclear fromthefilethattherespondentCentralBankhadembarkedinto athoroughstudy ofallaspectsofthematterandhadconsidered allargumentsandfactswhichwereputbeforethembytheapplicants before deciding on the application. This ground should thereforealsofail. 10 Before concluding I would add that the powers which have beenexercisedbytherespondentCentralBank,inrelationtothe application inquestion emanatefrom theprovisionsof sections 11and40oftheExchangeControlLaw,Cap. 199andthatitis providedthereunderthatanypermitgrantedbytheCentralBank 25 maybeabsolute orconditionaland suchprovision in myview, giveswidediscretionandpowerstotheCentralBank. Forall theabovereasonstherecourse isdismissed'but inthe circumstancestherewillbenoorderastocosts. ', 20 · .. v 951- , · Recoursedismissed. Noorderastocosts.