OTTOMAN BANK OF NICOSIA Vs. OHANES CHAKARIAN

JUDGEMENT

(1.) The question in this appeal is the amount of pension to which the respondent is entitled on his retirement from the service of the appellants. His claim is that he is entitled to be paid his pension in Turkish gold pounds, by which is meant the current value of the bullion content of the Turkish gold coin (or its equivalent in the currency of Cyprus) at the appropriate rates of exchange. He succeeded in the Courts below, though there were considerable differences of judicial opinion. In the first Court which was the District Court, two Judges were in his favour while the third dissented. In the Supreme Court of Cyprus, there was again a division of opinion, Strong C. J. delivered a judgment in favour of the appellants, while Thomas J. was of the opposite opinion. The Court being equally divided, the judgment of the lower Court stood.

(2.) The appellants, now called the Ottoman Bank, previously called the Imperial Ottoman Bank, were established in 1863 by a Turkish Imperial Firman. The head office is at Istanbul, where its affairs are, and have been, administered by a Direction Generale subject to instructions given by a committee which meets both in London and Paris. The appellants have a great many branches. These were before the war mainly in various places in the Ottoman Empire. Many of these branches are now, since the war, in countries, which no longer form part of that Empire. But it also had branches before the war in Greece, Cyprus, Syria and other countries. The respondent entered the service of the appellants in October 1910, as a probationer at Nazli in Turkey, and was placed on the permanent staff in October 1912. There was no written contract of employment, but he signed a declaration that he had taken knowledge of the regulations governing the pension and superannuation fund adopted by the Direction Generale and that he would adhere strictly to those regulations as forming an integral part of the conditions of his engagement. It is clear and is common ground that the contract of employment was governed by Turkish law and that his salary (what is described as his basic salary or his traitement fixe) was in Turkish pounds. He served in different parts of Turkey continuously (except for certain periods in 1916, 1917 and 1918, when he was absent on military service) until about October 1922. He was then for reasons connected with the war compelled to leave Smyrna and go to Athens. About the e April, 1923, he was transferred from Athens to Cyprus where he remained in the appellants' service until 1931 when he retired on the terms that he was entitled to a pension in accordance with the pension regulations at the rate of 48 per cent. of the fixed salary received by him on 31 December 1930. His basic salary as expressed in Turkish money was Ltq. 30 a month and his pension was accordingly Ltq.14.40 per month. The question in the appeal is how that monthly pension is payable. As already stated, the respondent's contention is that he is entitled to be paid a fluctuating sum of money in currency sufficient to purchase the quantity of gold bullion which would have been represented by these Turkish pounds on a gold basis. The pension regulations provide for the right of the employees to a pension on retirement subject to various conditions not here material, and the appellants bind themselves to maintain a pension fund to be fed from time to time by contributions from the employees of 4 per cent. of their fixed salary, together with half of any increments they receive in any year and by monthly contributions from the appellants of 6 per cent. of the salaries. In 1925, during the course of the respondent's service, the 4 per cent. was increased to 5 per cent. and the appellants' contribution was increased to 10 per cent. The articles of the regulations which are essentially material in this case are the following : " Art. 14 which provides that the amount of the pension is fixed on the basis of the salary which the employee received on 31 December of the year preceding that in which he is retired.

(3.) Art. 15-The amount of the pension will be calculated on the following basis : (1) For 10 years' service 30 per cent. of the annual fixed salary. (2) 2 per cent. for each of the subsequent years. Art. 16.-In no case shall the amount of the pension exceed the three-quarters of the annual fixed salary. Nevertheless, neither can the pension be less than Ltq. 45 per annum for an employee, nor than Ltq.25 per annum for a servant. "