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Frequency of use
How common is commercial litigation as a method of resolving high-value, complex disputes?
Litigation remains the most common method of resolving high-value, complex disputes in Cyprus. However, recourse to arbitration as an alternative dispute resolution (ADR) mechanism has become more popular, especially for high-value technical disputes relating, for example, to construction or engineering contracts. Resorting to arbitration for these types of disputes is perceived to be more effective, as they may be determined by an experienced arbitrator with relevant specialist/expert knowledge.
In addition, the recent enactment of the legislation on Certain Aspects of Mediation in Civil Law 159(I)/2012 (the Mediation Law), implementing Directive 2008/52/EC, encourages resorting to mediation as an alternative method to litigation. Although recourse to mediation remains voluntary, the parties to cross-EU disputes may be more amenable to settlement by mediation as enforcement of a settlement is facilitated under the European regime, which is discussed below.
Please describe the culture and ‘market’ for litigation. Do international parties regularly participate in disputes in the court system in your jurisdiction, or do the disputes typically tend to be regional?
The absence of pre-action rules allows a party to use litigation as a tool for exerting pressure upon opponents even in cases where settlements are being actively explored.
The existence of disputes with an international element is inevitable given that Cyprus is an attractive holding company location and a friendly jurisdiction for doing business. Cypriot courts are, therefore, called to adjudicate domestic, regional and international disputes. Even where the main proceedings in question are conducted abroad (ie, in another EU member state or in a country that is a party to a bilateral agreement with Cyprus) or are arbitral proceedings, parties often resort to Cypriot courts for the issue of interim injunctive relief usually consisting of a freezing order (domestic or worldwide) and ancillary disclosure orders in support of the former.
What is the legal framework governing commercial litigation? Is your jurisdiction subject to civil code or common law? What practical implications does this have?
Commercial litigation encompasses a wide spectrum of legal issues with disputes being diverse and varying in complexity. The legal framework governing commercial litigation therefore depends on the particular dispute in question and may consist of domestic legislation (the Contract Law, the Civil Wrongs Law, the Companies Law, etc), common law principles, equitable principles and EU law.
Cyprus is a common law jurisdiction and Cypriot courts are expected to follow prior-case precedent. Parties to commercial litigation can therefore take advantage of the legal certainty and predictability offered by the common law system to evaluate the strength of their case and proceed accordingly.
Bringing a claim - initial considerations
Key issues to consider
What key issues should a party consider before bringing a claim?
There are various factors that a party should consider before bringing a claim, including the following:
- its chance of success;
- the strength, availability and admissibility of the evidence;
- the financial position of the prospective defendant;
- the time and cost involved in litigation;
- the existence of jurisdiction of the Cypriot court to hear the claim;
- the possibility of seeking interim relief simultaneously with the filing of the claim;
- the limitation period applicable to the relevant cause or causes of action; and
- the location of the assets of the prospective defendant for enforcement purposes.
How is jurisdiction established?
Jurisdiction is determined by two different regimes, namely the European regime and national rules. National rules are residual, which means that they are invoked only where the European regime is inapplicable. Although the two regimes are different, they both adopt the concept of domicile in establishing jurisdiction and, in the absence of domicile, subject-matter rules.
In summary, jurisdiction over a defendant in civil or commercial proceedings who is domiciled in Cyprus is allocated to the district court of his or her place of domicile. In the case of a foreign defendant, subject-matter jurisdiction may be invoked where, for example, the subject matter of the action is immovable property located in Cyprus, or, in a case of breach of contract or tort, the breach or tortious act in question has been wholly or partly committed in Cyprus.
Importantly, where the European regime applies, a defendant who attempts to initiate an overlapping process in another jurisdiction preferred by him or her - even if a more appropriate forum - may be unsuccessful, as priority is generally given to the court of the country that is first seised (although this is subject to exceptions). However, in cases where national rules apply, it is open for the defendant to challenge jurisdiction on the basis that Cyprus is not the appropriate forum to hear the case or invoke the lis alibi pendens or abuse of process principles, as the case may be, and seek a stay of the proceedings in Cyprus.
Res judicata: is preclusion applicable, and if so how?
Preclusion is applicable in Cyprus and operates to prevent the re-adjudication of matters that have been, or could have been, adjudicated in prior proceedings before a court of competent jurisdiction when the subsequent proceedings in question are based on the same causes of action and involve the same parties who were given full and fair opportunity to be heard on the issue (or their successors in title).
Applicability of foreign laws
In what circumstances will the courts apply foreign laws to determine issues being litigated before them?
Given the adversarial nature of the Cyprus legal system, a Cypriot court cannot apply foreign law in its own motion or undertake an independent research into foreign law. A Cypriot court will, therefore, apply foreign law to determine issues being litigated before it if foreign law is connected to the dispute in question and is pleaded and proved as a fact to the satisfaction of the Cypriot court. Where a case has a connection with a foreign legal system, a party may consider pleading foreign law if it is more favourable than Cypriot law.
The onus of proving foreign law lies on the party which supports its claim or defence on it. If that party fails to adduce evidence or sufficient evidence of foreign law, the Cypriot court will apply Cyprus law for determining the dispute in question.
What initial steps should a claimant consider to ensure that any eventual judgment is satisfied? Can a defendant take steps to make themselves ‘judgment proof’?
A plaintiff may consider applying for freezing orders (with domestic or worldwide application) at an early stage in the proceedings, with a view to preserving the status quo or preventing the alienation of assets by a defendant pending determination of the dispute in question. Freezing orders may also be obtained against a third party who holds assets on behalf of the defendant.
In urgent cases, a freezing order can be obtained ex parte (ie, without notice) and at the same time as court proceedings are issued against the defendant. If a party, therefore, considers that proceedings may be issued against it and a freezing order may be obtained, such party can proactively take steps to make itself ‘judgment proof’ by strategically removing its assets from the reach of a prospective plaintiff.
When is it appropriate for a claimant to consider obtaining an order freezing a defendant’s assets? What are the preconditions and other considerations?
A plaintiff may consider obtaining a freezing order if there is a risk that a defendant, or proposed defendant, will dissipate his or her assets with the intention or effect of frustrating enforcement of a prospective judgment against him or her. In evaluating the risk of dissipation, account should be taken of, among others, the nature and financial standing of the defendant, the value of the claim as against his or her assets, the nature of the assets in question, the ease with which they can be dissipated, the jurisdiction in which the defendant is based, and the defendant’s behaviour.
A Cypriot court has jurisdiction to grant a freezing order in all cases in which it appears that it is just and convenient to do so, provided that the following conditions are cumulatively satisfied:
- the plaintiff has a good, arguable case;
- the plaintiff has visible chances of success in obtaining a judgment on the merits;
- unless the freezing order is granted, there is a real risk that a judgment issued in favour of the plaintiff will not be satisfied; and
- the balance of convenience lies with the plaintiff.
In cases where urgency is demonstrated or in cases of exceptional circumstances, a freezing order can be sought without notice to the subjected party, in which case the plaintiff is placed under a duty to fully and frankly disclose all material matters to the Cypriot court, including those that may be adverse to the plaintiff.
Pre-action conduct requirements
Are there requirements for pre-action conduct and what are the consequences of non-compliance?
There are no requirements for pre-action conduct and neither does there exist any pre-action protocol that the Cypriot courts would expect the parties to follow. It should be noted, however, that for certain types of specialist proceedings (eg, winding up proceedings) the law imposes a specific procedure that must be adopted.
Other interim relief
What other forms of interim relief can be sought?
Except for freezing orders, which can be of domestic or worldwide application, a Cypriot court is empowered to grant a wide range of interim relief measures including, but not limited to:
- disclosure orders;
- search and seizure orders;
- orders against third parties holding assets beneficially owned by a defendant;
- orders for the appointment of a receiver; and
- other prohibitory or mandatory or ancillary orders.
Alternative dispute resolution
Does the court require or expect parties to engage in ADR at the pre-action stage or later in the case? What are the consequences of failing to engage in ADR at these stages?
There is no requirement or expectation for the disputed parties to engage in ADR at the pre-action stage or during the period in which the action is pending before the Cypriot court. Although the enactment of the Mediation Law aims at the promotion of mediation as an ADR mechanism, it does not impose a court-ordered mediation regime and its use remains voluntary.
Claims against natural persons versus corporations
Are there different considerations for claims against natural persons as opposed to corporations?
A company registered under the laws of Cyprus can sue and be sued in its own name and is subject to legal obligations in the same manner as natural persons. Given, however, that a company is an artificial person that acts through its human representatives and often in group structures, depending on the nature of the claim in question, a prospective plaintiff should consider whether persons related to or holding assets for the benefit of the company should be made co-defendants.
Are any of the considerations different for class actions, multi-party or group litigations?
Class actions are not available in Cyprus. However, where there are numerous persons having the same interest in one cause or matter, one or more of such persons may be authorised by the court to sue or defend on behalf, or for the benefit, of all persons so interested.
Also, multiple actions pending before the same court may be consolidated if they involve a common question of law or fact bearing sufficient importance in proportion to the rest of the matters involved in the actions to render consolidation desirable. If prospective plaintiffs aim at bringing separate actions with a view to consolidate the same, they should consider in advance whether the conditions for consolidation may be satisfied. In such cases, strategic planning is particularly important.
What restrictions are there on third parties funding the costs of the litigation or agreeing to pay adverse costs?
Third-party funding is not available in Cyprus. If such funding occurs then it is not something that will be considered by the court as relevant, unless of course the funding is connected with some wrongdoing or illegal act. Litigation is funded by the parties to the legal proceedings and litigation costs are generally borne by the losing party by reference to fees fixed by the Supreme Court on the basis of the value of the claim (unless another arrangement is made). Where an executor, administrator or a trustee is a party to legal proceedings, his or her costs may be paid out of a particular estate or fund provided that he or she has not unreasonably instituted, carried on or resisted the legal proceedings.
How are claims launched? How are the written pleadings structured, and how long do they tend to be? What documents need to be appended to the pleading?
Claims are launched by the filing of a writ of summons with the Cypriot court that has jurisdiction over the dispute in question. A writ of summons may be generally endorsed containing only the relief sought, or specially endorsed containing the statement of claim and the relief sought. Where the writ of summons is generally endorsed, the statement of claim must be filed separately. In actions for libel, malicious prosecution or false imprisonment and actions in which fraud is alleged by the claimant, the claim must be endorsed by a writ of summons generally endorsed. No documents need to be appended to the writ of summons.
The statement of claim (and every pleading) sets out the material facts on which the plaintiff relies for his or her claim but not the evidence by which they are to be proved. The material facts should be sufficiently set out to give due notice to the defendant of the case against him or her and to prevent him or her from being taken by surprise at trial. In case the claim contains a plea on misrepresentation, fraud, breach of trust, wilful default or undue influence, full particulars thereof must be set out in the statement of claim. The length of the statement of claim depends on the complexity of the case, the volume of the documents surrounding it and the type of plea raised.
Serving claims on foreign parties
How are claims served on foreign parties?
Where a Cypriot court has jurisdiction over a foreign defendant, service of the writ or notice of the writ of summons must be effected after obtaining leave of court. Leave is granted if the plaintiff satisfies the Cypriot court that the applicable conditions imposed by the Civil Procedure Rules or the relevant EU Directive are satisfied. Before obtaining leave of court for service out, the plaintiff must first obtain leave of court for sealing the writ of summons. However, this is not required if a Cypriot party is also a defendant to the action.
The method of service is governed by the bilateral treaties and international conventions and regulations to which Cyprus is a party. In particular, at EU level, service of a claim can be effected pursuant to Council Regulation (EC) No. 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters, whereas, at international level, service of a claim can be effected pursuant to the Hague Convention of 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, to which Cyprus has acceded. At the bilateral level, Cyprus has entered into treaties that regulate service with countries including, for example: Belarus; Bulgaria; China; the Czech Republic; Georgia; Germany; Greece; Hungary; Russia; Serbia; Slovakia; Slovenia; Syria; and Ukraine.
Key causes of action
What are the key causes of action that typically arise in commercial litigation?
There is a wide range of commercial activities giving rise to various causes of action. Breach of contract, misrepresentation, deceit, conspiracy, breach of fiduciary duty, breach of trust, conversion and unjust enrichment are some of the key causes of action which may arise in commercial litigation.
Under what circumstances can amendments to claims be made?
Pursuant to the new Order 25, amendments to claims can be made, without the leave of the court, as follows:
- at any time after the filing of the writ of summons with the court but before its service on the defendant; or
- after the exchange of the pleadings but before the issuance of the summons for directions by the plaintiff (in accordance with Order 30 of the Civil Procedure Rules).
After the issuance of the aforesaid summons for directions, no amendment to a claim is allowed unless:
- it relates to a bona fide mistake in the drafting of the pleading; or
- it relates to new facts that the court is satisfied were not in existence either at the time the relevant instructions for the filing of the claim were received or at the time of filing the claim.
What remedies are available to a claimant in your jurisdiction?
There is a wide range of remedies available to a plaintiff in Cyprus depending on the cause of action and objectives of the litigation. The main civil remedies under Cyprus law are:
- general and special damages to compensate for losses incurred;
- restitutional damages for reversing unjust enrichment;
- declarations setting out the rights or legal position of the parties;
- injunctive relief;
- an order for specific performance;
- appointment of a receiver; and
- exemplary or punitive damages to punish the behaviour of the defendant in certain circumstances.
What damages are recoverable? Are there any particular rules on damages that might make this jurisdiction more favourable than others?
The type and calculation of damages depends on the cause of action in question. For example, damages for breach of contract may differ from damages in tort. Generally, damages are of compensatory nature; they are assessed by reference to the plaintiff’s loss: actual or consequential. By way of indication, damages for breach of contract are recoverable if the loss or damage is caused as a normal result of the breach, or was, at the time of the contract, in the contemplation of the parties as a probable result thereof. Mitigation applies to limit the amount of damages where the party could, but did not, take measures to reduce its loss.
Provided that the losses incurred by a plaintiff satisfy the tests of causation and remoteness, there is a wide range of losses that can be recovered, including special damages and general damages depending on the type of action.
Responding to the claim
Early steps available
What steps are open to a defendant in the early part of a case?
A defendant may address a claim in different ways, depending on the circumstances of the case in question. For example, where a defendant believes that he or she is entitled to a remedy by the plaintiff relating to the issues raised in the claim, he or she may bring a counterclaim against the plaintiff. Also, a defendant may take advantage of the third-party mechanism (explained below) if he or she believes that a third party is liable in whole, or in part, for the claim.
In appropriate circumstances, steps to dispute the jurisdiction of the court can also be taken by a defendant. The grounds for disputing jurisdiction differ depending on which regimes apply, namely, the European regime or the national rules. In general, appropriate circumstances may include the following:
- another court has jurisdiction over the claim under a choice of court or arbitration agreement;
- Cyprus is not the convenient forum for determining the claim;
- the service was defective; or
- the same or related proceedings are pending elsewhere.
How are defences structured, and must they be served within any time limits? What documents need to be appended to the defence?
A defence may (i) deny the facts stated by the plaintiff (noting that mere denial will not suffice and that the position of the defendant be clearly stated); (ii) admit the facts stated by the plaintiff but avoid their effect by asserting fresh facts in response; or (iii) raise a question of law as to the legal effect of such facts. No documents need to be appended to the defence.
Where the writ of summons is generally endorsed (ie, containing only the relief sought and not the particulars of the claim), service of the defence must be effected within 14 days from the time specified for appearance or from the delivery of the statement of claim. In the case of general endorsement, the statement of claim is filed within 10 days from the date the defendant enters an appearance notifying his or her intention to defend the proceedings. For completion, a defendant must enter an appearance within 10 days from the service of the writ of summons.
Where the writ of summons is specially endorsed (ie, containing the full statement of claim and the relief sought), service of the defence must be effected within 14 days from the date the defendant enters an appearance. In practice, these deadlines are rarely met and the courts readily grant extensions of time.
Under what circumstances may a defendant change a defence at a later stage in the proceedings?
Defences may be amended without leave of the court if the amendment occurs after the exchange of the pleadings but before the issuance of the summons for directions. Thereafter, no amendment is allowed unless it relates to either a bona fide mistake in the drafting of the defence or new facts that the court deems were not in existence at the time of filing the defence.
How can a defendant establish the passing on or sharing of liability?
A defendant may pass on or share liability by claiming against another defendant to the action, or a third party, by arguing the following:
- that he or she is entitled to contribution or indemnity;
- that he or she is entitled to:
- a relief or remedy relating to, or connected with, the matters raised by the plaintiff; and
- a relief or remedy that is substantially the same as a relief or remedy claimed by the plaintiff; or
- that a question arises between the defendant and the other defendant, or the third party, which is connected with, and substantially the same as, the issue between the plaintiff and the defendant.
If the defendant wishes to claim on the above basis against an existing defendant or a third party, he or she will issue a notice and pleadings will be exchanged. The procedure differs depending on whether the claim is against an existing defendant or a third party.
How can a defendant avoid trial?
If a defendant agrees to settle a claim out of court in the early part of a case, the case is dismissed and a trial is avoided. Depending on the circumstances of the case, a defendant may also avoid trial by lodging an application to strike out the action. The grounds for strike-out are explained in question 39.
Ultimately, the way a defendant will approach a claim depends on the strength of his or her defence. A defendant with a strong defence may opt for a different strategy going forward than a defendant with a weak case.
Case of no defence
What happens in the case of a no-show or if no defence is offered?
Failure of the defendant to enter an appearance, or to file a defence to a writ of summons, entitles the plaintiff to file an application with the court for the issue of judgment in default.
Can a defendant claim security for costs? If so, what form of security can be provided?
A defendant may secure an order for security of costs at any stage of the action, provided that:
- the plaintiff is ordinarily resident in a non-EU member state;
- the plaintiff has no assets or insufficient assets in Cyprus to satisfy any order that may be made against him or her; and
- the Cypriot court is satisfied by the strength of the defendant’s case.
The award of security for costs protects a defendant who successfully defends proceedings against him or her with no real prospect of recovering its costs but can also serve as a tactical tool for exerting pressure on a plaintiff to reconsider the merits and cost of his or her case. Security for costs usually takes the form of a bank bond, a bank guarantee or payment into court.
Further, a defendant may apply for the provision of a guarantee as security for costs if the plaintiff is a Cypriot legal entity and the court is satisfied on the evidence that the plaintiff is unable to pay the costs of the defendant in case the latter succeeds in his or her defence.
Progressing the case
Typical procedural steps
What is the typical sequence of procedural steps in commercial litigation in this country?
Procedural steps in commercial litigation do not differ from the procedural steps in any other type of civil litigation, although it is anticipated that a specialist commercial court will be established in the near future. Proceedings are commenced by the filing of a writ of summons with the Cypriot court of jurisdiction and service of the same on the defendant.
A plaintiff that wishes, but is not obliged, to file and deliver a reply to the defence, must do so within seven days of the delivery of the defence. If, however, the defence is accompanied by a counterclaim, a defendant must file and deliver a reply and defence to counterclaim (forming one document) within 14 days from the delivery of the defence and counterclaim.
The next step following the completion of pleadings is mainly preparatory to the trial. For (i) claims under €10,000 that were filed on or after 1 January 2015, and (ii) claims that were filed on or after 1 January 2016 regardless of the scale, a plaintiff is required to issue a summons for directions accompanied by a specific form indicating the directions sought from the court on matters such as:
- the discovery and inspection of pretrial documents;
- the provision of better and further particulars; and
- the preparation of a list of admitted facts, as the case may be.
The aforesaid summons for directions and specific form must be filed by the plaintiff within 30 days from the closure of pleadings and set for hearing before the court after a period of at least 60 days.
Following a recent amendment to the Civil Procedure Rules, for proceedings commenced on or after 24 July 2017, the aforesaid 30-day time frame, which is imposed for the issuance of a summons for directions, has been extended to 90 days. Once service of the summons for directions has been effected, a defendant must, in turn, file the specific form with the court. At the hearing of the summons for directions, the court makes directions on the basis of the specific forms filed by the parties. In accordance with Order 30 of the Civil Procedure Rules, failure of the plaintiff to issue a summons for directions may lead to the dismissal of the proceedings by the court. For claims exceeding the amount of €3,000, each party is obliged at the pretrial stage to file a list of witnesses along with a summary of their testimony.
Claims made before the aforesaid dates are treated differently and no obligation exists for the filing of a list of witnesses and a summary of their testimony.
Bringing in additional parties
Can additional parties be brought into a case after commencement?
By an application to the court, additional parties may be brought into a case after commencement, either as plaintiffs or as defendants, if their presence before the court is necessary to enable it to effectually and completely adjudicate upon all issues in dispute.
Can proceedings be consolidated or split?
Actions can be consolidated by a Cypriot court in the following circumstances:
- when actions are brought by a plaintiff against different defendants in connection with the same or substantially the same incident. The application for consolidation may be made by two or more of such defendants; or
- when two or more actions are pending before the same Cypriot court (by the same or different plaintiffs against the same or different defendants) and such actions involve a common question of law or fact bearing sufficient importance in proportion to the rest of the matters involved in the action to render consolidation desirable. The application for consolidation may be made by a party to any of the actions for which consolidation is sought.
A Cypriot court may order split trials if it satisfied that the causes of action in question cannot be conveniently tried or disposed of together.
Court decision making
How does a court decide if the claims or allegations are proven? What are the elements required to find in favour, and what is the burden of proof?
As a general rule, a party bringing a claim has the burden of proving it by adducing sufficient evidence to satisfy the standard of proof in civil cases on a balance of probabilities. This means that a court must be satisfied, on the evidence, that the occurrence of the event was more likely than not.
The elements required to find in favour differ depending on the cause or causes of action in question.
How does a court decide what judgments, remedies and orders it will issue?
A court may issue any judgment, remedy or order that is sought by a party in a particular section of his or her claim or counterclaim - which is often referred to as the ‘prayer’ - provided that the claim or counterclaim is proved.
How is witness, documentary and expert evidence dealt with?
All evidence, including witness, documentary and expert evidence, must be admissible in order to be adduced in evidence. Even if relevant, evidence may not be admissible if, for example, it is:
- taken unlawfully;
- protected by privilege; or
- violates the Constitution of Cyprus or any legislation.
In addition, a party must produce the best evidence that the nature of the case allows.
Factual and expert witnesses are generally called to give oral evidence at trial. In practice, examination in chief consists of a written statement which is adopted orally by the witness. Following an amendment to Chapter 9 of the Evidence Law in 2004, hearsay evidence is now admissible, although the weight the court attaches to such evidence may be affected depending, for example, on whether hearsay is first-hand or multiple, or whether there is a better evidence at hand that has not been disclosed.
As far as the expert witness is concerned, the court must be satisfied that his or her opinion is necessary for the case and that he or she is sufficiently qualified in a field of expertise in relation to which his or her testimony is sought to be adduced.
How does the court deal with large volumes of commercial or technical evidence?
The general rule is that parties to proceedings are free to decide the number of witnesses, the order in which they will be called and what kind of evidence they will adduce to prove their case. Where specialised knowledge in a particular field is required, a party may call an expert witness for the purpose of assisting the court in reaching its decision by providing independent expert opinion on an issue on the basis of the information provided by the party instructing him or her.
Can a witness in your jurisdiction be compelled to give evidence in or to a foreign court? And can a court in your jurisdiction compel a foreign witness to give evidence?
A witness located in Cyprus may be compelled to give evidence for use in proceedings conducted in other EU member states (except Denmark) by virtue of Regulation (EC) No. 1206/2001, which is directly applicable in Cyprus. For proceedings conducted in non-EU member states, the matter is regulated by bilateral treaties on interstate legal assistance and by the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters which has been ratified in Cyprus.
We note that the European regime permits the direct taking of evidence by the court requesting it. In view of this, a Cypriot court handling a case may compel a witness located in another EU member state to attend the relevant court in that member state to give evidence by teleconference.
How is witness and documentary evidence tested up to and during trial? Is cross-examination permitted?
All evidence is presented during the trial and is tested by cross-examination. Failure of the opposing party to cross-examine a witness on a particular point is deemed as an acceptance of the witness’s allegations in relation to the same.
How long do the proceedings typically last, and in what circumstances can they be expedited?
The average length of civil proceedings at first instance is three to five years. The granting of a summary judgment by the court handling the case is an expedited mechanism for determining a case (or an issue thereof) without trial on the ground that a defendant has no defence. It should be noted that eligibility for applying is restricted to cases where the writ of summons is specially indorsed. A summary judgment may not be issued where a defendant (i) satisfies the court that he or she has a good defence to the action on the merits or (ii) discloses sufficient facts entitling him or her to defend the legal action against him or her.
Claims under €3,000 are subject to a fast-track procedure as the hearing is based on written evidence, unless otherwise ordered by the court (Order 30 of the Civil Procedure Rules).
Gaining an advantage
What other steps can a party take during proceedings to achieve tactical advantage in a case?
In addition to summary judgment, the Cypriot courts are empowered to strike out actions or any pleadings in the following circumstances:
- if there is an abuse of process of the court;
- if a claim or counterclaim discloses no reasonable cause of action;
- if a defence discloses no reasonable answer;
- if the claim or defence is frivolous or vexatious;
- if there is lack of jurisdiction; or
- if there is a more convenient forum to hear the case.
Defending an application for a summary judgment or strike out inevitably leads to early-stage disclosure of information and evidence which would otherwise be adduced at the hearing of the case. Even if such applications are not eventually successful, the party bringing them may achieve a tactical advantage as the opposing party is forced to ‘show his cards’ before trial.
Impact of third-party funding
If third parties are able to fund the costs of the litigation and pay adverse costs, what impact can this have on the case?
Third party funding is not provided for by Cyprus civil procedure. Third parties may fund litigation at their own initiative but will not be entitled to a favourable or an adverse costs order by the court.
How are parallel proceedings dealt with? What steps can a party take to gain a tactical advantage in these circumstances, and may a party bring private prosecutions?
It depends on the specific case in question. Whereas regulatory findings may constitute evidence of liability under some circumstances, they may be deemed irrelevant and thus inadmissible in other circumstances. A guilty plea or a conviction constitutes admissible evidence in court in a civil action, assuming it is relevant. A party may bring private prosecutions in relation to specific offences or in circumstances where the relevant authorities unreasonably refuse to proceed criminally against a person committing an offence and where the complaint in question is a matter of private, and not public, interest and the action complained of causes a violation of the complainant’s legal rights.
How is the trial conducted for common types of commercial litigation? How long does the trial typically last?
Commercial disputes are tried by the civil courts in the same way as any other civil dispute and are held in open court. There are now discussions taking place for the establishment of a commercial court specialising in commercial disputes. In general, the party that has the burden of proof (normally the plaintiff) opens its case first and calls its witnesses for the examination-in-chief. At this stage the party calling the witnesses tries to elicit from them all the facts it can prove in support of its case. Following a relatively recent amendment to section 25 of the Evidence Law, examination-in-chief can take the form of a written statement, which a witness must orally adopt.
The witnesses called by the respective party are liable to cross-examination by the opposing party that purports to discredit such witnesses or to weaken the case of the opponent and to establish its own case. Upon completion of cross-examination, the witnesses can be re-examined by the party calling them solely on matters arising out of the cross-examination. Following completion of the testimony, the parties will be invited to make their final submissions in support of their case.
The length of a trial depends on various factors, such as the number of the witnesses, the complexity and volume of the evidence, the behaviour of the parties (eg, embarking on delay tactics) and the caseload of the Cypriot court. The timetable of the case is imposed by the court.
Use of juries
Are jury trials the norm, and can they be denied?
There is no jury system in Cyprus. Trials are conducted by judges.
How is confidentiality treated? Can all evidence be publicly accessed? How can sensitive commercial information be protected? Is public access granted to the courts?
Although commercial cases are tried in open court, evidential documents are only accessible by the parties to the proceedings. However, evidential documents, including sensitive commercial information, may not be accessible if they are protected by privilege. The most common forms of privilege are ‘without prejudice’ communications, professional privilege and self-incrimination. Additionally, as a general rule, only the parties to the proceedings may access and conduct a search in the court file.
How is media interest dealt with? Is the media ever ordered not to report on certain information?
All cases that are brought before the Cypriot courts, with the exception of certain criminal cases, are tried in open court, which the public can attend. There are no restrictions on the media except in regard to criminal cases conducted in closed court.
How are monetary claims valued and proved?
Monetary claims must be valued and proved depending on the cause or causes of action to which they relate. For example, as discussed above, the measure of damages for breach of contract is different from that for tort. Damages are normally assessed by the court at the same time as the trial of the merits on the basis of the evidence adduced at trial.
How does the court deal with costs? What is the typical structure and length of judgments in complex commercial cases, and are they publicly accessible?
Costs are awarded at the court’s discretion. The general rule is that the losing party will pay the litigation costs of the winning party, usually by reference to fees fixed by the Supreme Court on the basis of the value of the claim. In practice, however, the winning party will recover a fraction of the litigation costs, as the aforesaid fixed fees do not reflect the actual expense of litigation, including lawyer fees.
A Cypriot judgment in complex commercial cases typically contains, among others, the following:
- a summary of the facts of the case;
- the points of fact or of law in issue;
- the arguments advanced by the parties and their citation of the relevant authorities;
- the legal reasoning on which the decision will be based;
- any remark or a comment stated by the judge in passing;
- the verdict of the court; and
- an award of costs.
The length of judgments usually depends on the complexity of the facts and the legal issues raised as well as on the volume of the evidence. Judgments are publicly available, yet recently the reporting of cases has been suspended due to General Data Protection Regulation (GDPR) compliance considerations.
When can judgments be appealed? How many stages of appeal are there and how long do appeals tend to last?
Cyprus has a two-tier judicial system. The Supreme Court is the only appellate court to hear appeals from judgments entered by first-tier district courts and specialist tribunals. A party may appeal against a judgment on points of law, or against findings of fact in the event that they are erroneous or unwarranted by the evidence.
An appeal is brought forward by a written notice of appeal, which is filed with the registrar of the court. According to Order 35, Rule 2 of the Civil Procedure Rules, no appeal from any interlocutory order, or from an order, whether final or interlocutory, in any matter not being an action, shall be brought after the expiration of 14 days, and no other appeal shall be brought after the expiration of six weeks, unless the court or judge, at the time of making the order or at any time subsequently, or the Court of Appeal, shall enlarge the time.
The length of the appeal depends on various factors including, for example, the issues in the appeal and the caseload of the Supreme Court. Normally, appeals against final judgments last two and a half to four years and appeals against final judgments take two to three years. It should be noted that, in appropriate circumstances, the Supreme Court may determine the appeal on an expedited basis.
How enforceable internationally are judgments from the courts in your jurisdiction?
Cypriot judgments may be enforceable in other EU member states under the Recast Brussels Regulation (EU) No. 1215/2012 or Regulation (EC) No. 44/2001, depending on the date on which the proceedings were instituted. Also, Cypriot judgments may be enforceable in non-EU member states with which Cyprus has signed a relevant bilateral or multilateral treaty.
In addition to the above, Cypriot judgments can be internationally enforced depending on the private international law of the country in which enforcement is sought. The procedure is determined by the law of the country in which enforcement is sought.
How do the courts in your jurisdiction support the process of enforcing foreign judgments?
As an EU member state, Cyprus abides by the Recast Brussels Regulation (EU) No. 1215/2012, which imposes a simplified mechanism for the enforcement of judgments obtained in other EU member states in proceedings commenced on or after 10 January 2015 without any declaration of enforceability being required. Judgments obtained in proceedings that were instituted before the aforesaid date are recognised and enforced by virtue of Regulation (EC) No. 44/2001, which requires a declaration of enforceability. As far as the procedure of recognition and enforcement is concerned, the filing of an application with the Cypriot court of jurisdiction in accordance with the relevant local laws will suffice.
Cyprus is also a signatory to multilateral and bilateral agreements that regulate the recognition and enforcement of judgments obtained in non-EU member states including, for example, Russia, Ukraine and China. Any other foreign judgment (such as a British Virgin Islands judgment) may be recognised in Cyprus by bringing a fresh common law action with a cause of action the foreign judgment itself.
Once a judgment is recognised and registered in Cyprus, it is treated as a domestic judgment and all means of enforcement are available as such.
Are there any particularly interesting features or tactical advantages of litigating in this country not addressed in any of the previous questions?
Depending on the circumstances of each case, a party litigating in Cyprus may take advantage of the legal certainly and predictability offered by common law systems as well as key simplified procedures and mechanisms imposed under the European regime relating, for example, to the recognition and enforcement of judgments, the obtaining of witness evidence directly, etc.
Are there any particular disadvantages of litigating in your jurisdiction, whether procedural or pragmatic?
Although Cypriot courts are generally swift in determining applications for interim injunctions, the adjudication of legal actions is often delayed, potentially leading to increased legal costs. On the other hand, legal costs in Cyprus may be significantly lower than in other jurisdictions.
Are there special considerations to be taken into account when defending a claim in your jurisdiction, that have not been addressed in the previous questions?
It is impossible to make blanket considerations for defending a claim as each claim involves a different set of facts. Yet it is important to take a pragmatic approach and balance the pros and cons of defending a claim instead of settling it. The significant delays in the determination of claims is a factor that very often leads the parties in reaching an out-of-court settlement.