BackgroundFrequency of use
How common is commercial litigation as a method of resolving high-value, complex disputes?
Commercial litigation is a very common method of resolving high-value, complex disputes, so much so that a specialised Commercial Court is expected to be established soon which will exclusively hear disputes of a commercial nature involving claims of over €2 million. Alternative dispute resolution methods such as arbitration and mediation are gradually becoming popular as well as they are considered to be efficient and quick alternatives, the former typically being used for disputes requiring an arbitrator with special knowledge and expertise (eg, in construction disputes) and the latter usually for disputes where the parties have a genuine intention to find a compromise while maintaining their relationship.Litigation market
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?
It is very common for international parties to participate in disputes in Cyprus and a significant number of the cases brought before the Cypriot courts involve foreign private individuals and companies. This is inevitable given that Cyprus is an attractive holding company location and a friendly jurisdiction for doing business.
Even where the main proceedings are conducted abroad (ie, in another EU member state or in a country that is a party to a bilateral agreement with Cyprus), a connecting link is frequently found with Cyprus allowing the parties to seek in Cyprus provisional measures (such as interim injunctions or ancillary disclosure orders) in aid of foreign proceedings.Legal framework
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 such as fraud, negligence and economic loss claims, contractual disputes and corporate disputes. Consequently, the applicable laws and principles would each time depend on the particular case at hand. In general, the applicable laws are domestic legislation (such as the Contract Law, the Civil Wrongs Law and the Companies Law), principles of common law and equity and, where applicable, EU law.
While the legal framework in Cyprus is extensively codified, Cyprus law is still heavily based on the principles of common law and equity in the sense that the fundamental principle of precedence applies. Parties to commercial litigation can therefore take advantage of the consistency, foreseeability and efficiency that common law systems tend to offer.
Bringing a claim - initial considerationsKey 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:
- the limitation period;
- the chance of success and the strength, availability and admissibility of the evidence;
- the financial position of the prospective defendant and the existence, availability and location of his or her assets;
- the time and cost involved in litigation;
- the existence of jurisdiction of the Cypriot courts to hear the case; and
- the possibility of obtaining interim relief.
How is jurisdiction established?
The principal source of law on jurisdiction in civil and commercial matters is Regulation (EU) No. 1215/2012. Where the matter before the court is civil or commercial, it would generally fall within the Regulation’s ambit, and its provisions would therefore apply to determine whether the Cypriot court has jurisdiction. Where the matter before the court does not fall within the Regulation’s ambit, domestic legislation and common law principles apply.
The principal basis for jurisdiction under both regimes is the domicile of the defendant. Persons domiciled in Cyprus may be sued in the Cypriot courts unless it is shown that another court has exclusive jurisdiction, for example because of an exclusive jurisdiction clause. In the case of a foreign defendant, the Cypriot court will consider whether it has subject-matter jurisdiction, that is, whether the facts and matters of the case may be the object of adjudication by it. Examples include actions in which the subject matter is immovable property located in Cyprus and actions for breach of contract in which the breach in question was wholly or partly committed in Cyprus.Preclusion
Res judicata: is preclusion applicable, and if so how?
Yes, the doctrine of res judicata is recognised under Cyprus law, so where a decision is given by a competent court or tribunal over a particular matter, that same matter cannot be reopened by parties bound by the decision. This doctrine embraces both cause of action estoppel and issue estoppel and may also be used to prevent a party from raising matters that, even though they had not been raised in earlier proceedings, could and should have been raised.Applicability of foreign laws
In what circumstances will the courts apply foreign laws to determine issues being litigated before them?
The rules for determining the law applicable to obligations arising in civil and commercial matters are set out in Regulation (EC) No. 593/2008 on the law applicable to contractual obligations (Rome I) and Regulation (EC) No. 864/2007 on the law applicable to non-contractual obligations (Rome II). A party may therefore rely on foreign law provided that it is applicable to the circumstances of the case (eg, where a dispute relates to a contract and the contracting parties had agreed that the contract must be governed by that law). Where a party relies on foreign law, it will need to plead and prove that foreign law as a fact to the satisfaction of the court with expert evidence. In the absence of such evidence, the foreign law will be taken as being similar to Cypriot law.Initial steps
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’?
The most effective and powerful remedies for a claimant to ensure the satisfaction of a potential judgment in his or her favour are the interim freezing orders or injunctions that can be obtained ahead of a trial so that the defendant’s assets are preserved pending final determination of the case. As the true extent of the defendant’s assets is very often unclear, it is also possible to obtain ancillary disclosure orders in support of a freezing order.
If urgency is proved, such interim orders can be obtained swiftly using a without notice application.
The defendant and any third persons served with a freezing order will be under a duty to comply strictly with its terms and will be punished for contempt if they do not. A defendant will therefore be prevented from removing his or her assets from the claimant’s reach so as to make him or herself ‘judgment proof’.
In cases where a freezing order is not issued, a defendant will be able to deal with his or her assets freely. However, if a final judgment is eventually issued against the defendant, the court may hold any prior transactions carried out with the purpose of preventing the satisfaction of the judgment to be fraudulent and void, unless the defendant proves that they were made in good faith and for value.Freezing assets
When is it appropriate for a claimant to consider obtaining an order freezing a defendant’s assets? What are the preconditions and other considerations?
As mentioned above, a freezing order can be a very effective and powerful remedy for a claimant. It is therefore always appropriate to consider obtaining one, especially where it seems likely that the defendant’s assets will be removed from the claimant’s reach.
The court may grant a freezing order if it is satisfied that:
- there is a serious issue to be tried at the hearing;
- there appears to be a probability that the plaintiff is entitled to relief;
- it will be difficult or impossible to achieve complete justice at a later stage without granting it; and
- the balance of convenience lies in favour of granting it.
Where urgency is proved, the freezing order can be obtained without notice to the defendant. In such cases, there is a duty on the plaintiff to make full and frank disclosure of all relevant information. This is a strict duty, and requires such disclosure to be full, fair and accurate.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. In certain proceedings, however, such as in winding-up petitions, the law prescribes specific actions and deadlines that must be observed before going to court.Other interim relief
What other forms of interim relief can be sought?
In addition to the freezing orders already discussed above (which can be of domestic or worldwide application and which can be issued both against a defendant and against third parties holding assets for the benefit of the defendant), a Cypriot court may grant a wide range of interim orders such as:
- interim injunctions preventing certain acts or events;
- discovery and tracing orders (Norwich Pharmacal orders);
- Anton Piller orders to search premises and seize evidence;
- ancillary disclosure orders;
- gagging orders;
- orders for the appointment of an interim receiver or administrator;
- quia timet injunctions to restrain threatened unlawful action;
- anti-suit injunctions and anti-enforcement injunctions.
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 obligation or expectation for the parties to engage in ADR either at the pre-action stage or later in a case, unless specifically agreed by the parties.Claims against natural persons versus corporations
Are there different considerations for claims against natural persons as opposed to corporations?
While a duly registered company can be sued in its own name and is subject to legal obligations in the same manner as natural persons, a primary consideration when bringing a claim against a company is its ability to satisfy a potential judgment against it. If this would seem implausible, a claimant may consider whether a claim can also be brought against persons that had acted for or represented the company, eg, in negligence or for fraud or conspiracy.Class actions
Are any of the considerations different for class actions, multi-party or group litigations?
Where numerous persons have the same interest in one cause or matter, they may authorise one or more persons to represent them in the said cause or matter either by suing or defending on their behalf. All the members of the said class should have the same interest in the proceedings and the relief should be beneficial to all.
In addition, two or more actions may be consolidated by the court if their claims involve a common question of law or fact of such importance in proportion to the rest of the matters involved in such actions as to render consolidation desirable.Third-party funding
What restrictions are there on third parties funding the costs of the litigation or agreeing to pay adverse costs?
In the absence of a special framework regulating third-party litigation funding, the common law rules against maintenance and champerty will most likely be applied. Accordingly, an agreement by one person to finance another’s litigation in return for a share in the proceeds without having any genuine or substantial interest in the outcome of that litigation may amount to maintenance or champerty and may be deemed unenforceable and void.Contingency fee arrangements
Can lawyers act on a contingency fee basis? What options are available? What issues should be considered before entering into an arrangement of this nature?
No, since contingency fee agreements between lawyers and clients are unenforceable and void at common law.
The claimLaunching claims
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?
Subject to a few exceptions, an action before the district court will commence by a writ of summons that contains the details of the parties to the proceedings and the claims sought by the claimant. In most cases, the writ of summons may be specially endorsed with a statement of claim that provides the factual background upon which the claims are based. The defendant may then file a defence or counterclaim and the claimant may then file a reply or defence to the counterclaim. All pleadings should only contain a summary of the material facts relied on and the allegations made, and not law, evidence or argument. As a result, they do not tend to be very long unless the facts and allegations are extensive and complicated. No documents are appended to the pleadings.Serving claims on foreign parties
How are claims served on foreign parties?
Service on a foreign defendant out of the jurisdiction may be allowed by the court once it is satisfied that it can assume jurisdiction over the foreign defendant either on the basis of subject-matter jurisdiction (eg, because the action is founded on a civil wrong committed in Cyprus) or because the foreign defendant is considered to be a necessary or proper party to an action properly brought against some other person duly served in Cyprus.
The method of service would depend on the country in which the foreign defendant is located. For example, service in a European Union country will be made pursuant to Regulation (EC) No. 1393/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters. In countries outside of the European Union, service will be made either pursuant to the Hague Convention of 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters or pursuant to a bilateral treaty between Cyprus and that country.Key causes of action
What are the key causes of action that typically arise in commercial litigation?
There are various commercial arrangements giving rise to various causes of action. Breach of contract, misrepresentation, fraud, conspiracy, financial loss, breach of fiduciary duty, breach of trust and dishonest assistance are just some of the causes of action that usually arise in commercial litigation.Claim amendments
Under what circumstances can amendments to claims be made?
Claims can be amended without the court’s leave at any time before issuing the summons for directions (which must be issued within 90 days of the closing of the pleadings). Following the summons for directions, no amendment can be made unless it aims to correct an inadvertent, bona fide mistake made at the time of drafting or where new facts have emerged that were not in existence at the time of filing.Remedies
What remedies are available to a claimant in your jurisdiction?
There is a wide range of remedies available to a claimant in Cyprus depending on the cause of action and objectives of the litigation. The most common remedies are the following:
- damages (general, special and punitive);
- specific performance;
- account of profits;
- declaratory judgments;
- appointment of a receiver; and
- possession and foreclosure orders.
What damages are recoverable? Are there any particular rules on damages that might make this jurisdiction more favourable than others?
Damages may be generally recovered both as a compensatory remedy (ie, to compensate the claimant for losses suffered) and as an exemplary or punitive remedy (ie, to penalise the defendant). The measure and type of damages are subject to different principles and will probably vary depending on the cause of action giving rise to the remedy. Damages in contract, for example, generally intend to put the claimant into the position in which he or she would have been had the contract not been breached, and there are three basic methods of calculating loss for breach of contract - expectation basis, reliance basis and restitution - while there are limitations arising, for example, from a duty to mitigate the loss. On the other hand, damages in tort usually aim to put the claimant into the position in which he or she would have been had the tort not been committed.
Claimants in Cyprus can take advantage of the great range of available remedies that can be sought in parallel, as well as of the availability of equitable relief (eg, specific performance and injunctions), where common law remedies may prove inadequate.
Responding to the claimEarly steps available
What steps are open to a defendant in the early part of a case?
Where a defendant wishes to dispute the service made upon him or her or the order authorising such service, he or she may file a conditional appearance together with a set aside application. Alternatively, a regular appearance may be filed followed by a defence statement. Depending on the circumstances, points of law can be raised in the defence that may be heard at a preliminary stage. The defence can also include a counterclaim against the claimant. In appropriate circumstances, a defendant may also bring a claim against a co-defendant or a person not already a party to the action by following the third-party or co-defendant procedure.Defence structure
How are defences structured, and must they be served within any time limits? What documents need to be appended to the defence?
Where a defendant has entered an appearance, he or she must file and deliver his or her defence within 14 days of the time limit for appearance or from the delivery of the statement of claim, whichever shall be the later, unless an extension is provided by the court. In his or her defence, the defendant must state which of the allegations in the statement of claim he or she denies, which allegations he or she is unable to admit or deny but which he or she requires the claimant to prove, and which allegations he or she admits. Where an allegation is denied, the defendant must state his or her reasons for doing so, and if he or she intends to put forward a different version of events, he or she must state his or her own version. As with the rest of the pleadings, a defence should only contain a summary of the material facts relied on and the allegations made, and not law, evidence or argument. No documents can be appended to the defence.Changing defence
Under what circumstances may a defendant change a defence at a later stage in the proceedings?
A defence may be amended without the court’s leave at any time before issuing the summons for directions (which must be issued within 90 days of the closing of the pleadings). Following the summons for directions, no amendment can be made unless it aims to correct an inadvertent, bona fide mistake made at the time of drafting or where new facts have emerged that were not in existence at the time of filing.Sharing liability
How can a defendant establish the passing on or sharing of liability?
Where a defendant wishes to claim that liability has passed on to another party or that he or she is entitled toa contribution or indemnity by another party, he or she may bring a claim against that party within the same action by following the third-party or co-defendant procedure. A claim brought by the defendant against another party may be heard and determined together with the claimant’s claim, and all parties will have the same rights and obligations in respect of their claims and defences.Avoiding trial
How can a defendant avoid trial?
As explained in question 23, a defendant may raise points of law that may be heard at a preliminary stage, for example res judicata, abuse of process or absence of jurisdiction, or that the statement of claim discloses no reasonable cause of action. If any of these preliminary objections succeeds, the court may order the action to be stayed or dismissed without a trial on the merits.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 apply for judgment in default.Claiming security
Can a defendant claim security for costs? If so, what form of security can be provided?
Yes. The court may make an order for security for costs where the claimant is ordinarily resident outside of the European Union and if it is satisfied that it is just to make such an order. The court will have regard to all the relevant circumstances of the case and, in particular, whether the claimant owns property in Cyprus, the strength of the claimant’s case, whether the application is made in order to stifle a genuine claim or whether it will have this effect irrespective of the defendant’s motive, and the claimant’s ability to provide the security for costs. Ordinarily, the amount to be given for security for costs is the amount that under normal circumstances is likely to be incurred by the party applying for such order, and it may take the form of a bank guarantee or payment into court.
Progressing the caseTypical procedural steps
What is the typical sequence of procedural steps in commercial litigation in this country?
Civil actions of a commercial nature are generally commenced by a writ of summons filed at the district court. An application for interim relief is usually filed at this stage, in which case its hearing will be heard in priority. The particulars of the claim will either be included in the writ or will be filed and served separately. The defendant will then either file a conditional appearance together with a set aside application or a regular appearance and a defence statement, which may also include a counterclaim. A reply and defence to the counterclaim (if applicable) will also be filed by the claimant.
The claimant will need to take out a summons for directions and fill out a schedule with the directions that he or she intends to seek from the court on preliminary matters such as:
- discovery and inspection of documents;
- points of law raised by the pleadings;
- consolidation of actions;
- security for costs;
- provision of better and further particulars; and
- preparation of admitted facts by all parties.
The defendant will then fill out a similar schedule, and the requested directions will be given by the court during the directions stage.
Once all preliminary matters are completed the parties will be ordered to produce a list of their witnesses together with a synopsis of their testimonies. The court will then schedule the case for hearing and provide specific time frames for the examination, cross-examination and reexamination of each witness.
Evidence at the hearing is given via oral testimony unless the claim is less than €3,000 or the parties agree to produce written evidence.
Once the examination of all witnesses is completed, the parties may address the court for the purposes of summing up the evidence and legal argument.Bringing in additional parties
Can additional parties be brought into a case after commencement?
Yes; the court may, at any stage of the proceedings, either upon or without the application of either party, order that the names of any parties, whether plaintiffs or defendants, who ought to have been joined, or whose presence before the court may be necessary to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter, be added.Consolidating proceedings
Can proceedings be consolidated or split?
The court may consolidate two or more actions pending before it that involve a common question of law or fact of such importance in proportion to the rest of the matters involved in such actions as to render it desirable that the actions should be consolidated. It is also possible for the court to split proceedings if it is satisfied that they 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?
A claimant bears the burden of proof and must adduce sufficient evidence to satisfy the court of the truth of his or her case on a balance of probabilities. The standard required will, however, vary depending on the gravity of the allegation made and the nature of the claim, so the more serious the allegation (eg, fraud), the higher will be the required degree of proof. Once the factual basis of the claimant’s case is proved, the court will need to consider whether the facts proved actually entitle the claimant to the remedies requested or to any other remedies.
How does a court decide what judgments, remedies and orders it will issue?
A claimant must explicitly state in his or her statement of claim the relief requested, and the court may grant it once it is satisfied that the said relief is available under Cyprus law and it is justified on the facts proved by the claimant. Depending on the circumstances, the court may grant a remedy that is not expressly requested by the claimant but that is justified by the facts proved.Evidence
How is witness, documentary and expert evidence dealt with?
Any evidence that is sought to be admitted must be relevant to the facts in question and must not fall within any rule of exclusion (eg, illegally obtained evidence, evidence protected by privilege).
In general, a witness cannot provide an opinion on a matter on which he or she is not qualified to give expert evidence. Such opinions must generally be given by expert witnesses, once the court is satisfied about their competence. Expert witnesses have an obligation to assist the court and must remain objective.
Both witnesses and experts are subject to cross-examination by the other party, which may also call another witness to provide evidence in rebuttal.
How does the court deal with large volumes of commercial or technical evidence?
Parties are generally free to present their case as they wish, while the court will determine the issues in questions as presented without being expected to have commercial or other technical knowledge and without having at its disposal an independent expert or adviser. The parties to the proceedings must therefore be mindful of this so that they present their case in a clear, simple and illustrative way, preferably with the help of an expert witness whose testimony (if relevant, admissible and uncontested) will have an important bearing on the court’s findings.
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 the purposes of foreign proceedings conducted in another EU member state (with the exception of Denmark) by virtue of Regulation (EC) No. 1206/2001. Similarly, a Cypriot court can compel a foreign witness located in another EU member state to give evidence for proceedings carried out 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.
How is witness and documentary evidence tested up to and during trial? Is cross-examination permitted?
As explained above, any evidence that is sought to be admitted must be relevant to the facts in question and must not fall within any rule of exclusion (eg, illegally obtained evidence, evidence protected by privilege). Once adduced, the evidence is subject to cross-examination. Failure of a party to cross-examine a witness on a particular point is generally considered to be an acceptance of that witness’s position in relation to that point.Time frame
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 six years, depending on a number of factors such as the court’s schedule, the interim procedures and the volume and complexity of the evidence. The procedure may be accelerated if a summary judgment is issued, if all parties agree to produce evidence in writing or if the parties agree to restrict the disputed facts to a minimum. Claims under €3,000 are usually heard much earlier as evidence must be given in writing.Gaining an advantage
What other steps can a party take during proceedings to achieve tactical advantage in a case?
Some of the most common methods for obtaining a tactical advantage in a case are:
- to obtain a freezing order or injunction, or both, against a defendant pending final determination of the case;
- to obtain disclosure orders, so that the claimant is provided with material information that could not otherwise be had;
- to apply for summary judgment, thus forcing the defendant to present its case in detail at an early stage; and
- to apply for further and better particulars of the claim or defence, which would make it easier to respond to the allegations made.
If third parties are able to fund the costs of the litigation and pay adverse costs, what impact can this have on the case?
If such an arrangement is not considered unenforceable and void (as explained in question 15), we expect that it will improve access to justice and the quality of the services provided. At the same time, however, it will inevitably increase the courts’ workload and cause further delays.Impact of technology
What impact is technology having on complex commercial litigation in your jurisdiction?
While Cypriot courts maintain a rather conservative approach towards technological innovation (eg, we do not yet enjoy the benefits of electronic filings, e-discovery, technology-assisted document reviews and paperless trials), the government’s decision to establish a specialised Commercial Court and the recent remarks of the Supreme Court that ‘In an ever-changing field of technological progress, a corresponding adjustment to the field of law is also needed’ (Civil Appeal No. €325/2016, 14.11.2018) signify that change is soon going to occur in this regard.Parallel proceedings
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?
Depending upon their nature, the existence of parallel proceedings may give rise to various considerations. As a general comment, the court has inherent powers to control proceedings before it with a view to avoiding multiplicity and the risk of irreconcilable judgments. For instance, where civil proceedings involving the same cause of action and between the same parties are brought, the court dealing the subsequent case may stay its proceedings, even if the initial proceedings are pending in a different jurisdiction. Parallel civil proceedings may also give rise to the doctrine of res judicata. Accordingly, the party whose interests are adversely affected by the existence of parallel proceedings should apply for the appropriate relief under the circumstances. Where there are relevant criminal, administrative or other proceedings, a judgment of a competent court or tribunal may be adduced as evidence before the civil court provided it is relevant and admissible.
As to the right to bring private prosecutions, even though the right to prosecute is conferred upon the Attorney-General, the police and other appropriate authorities, it is not exclusive but supplementary to the right of the victim of a crime to prosecute the suspect. Accordingly, an individual does have a right to institute criminal proceedings provided he or she is aggrieved by the offensive act. This means that his or her rights must be directly affected.
How is the trial conducted for common types of commercial litigation? How long does the trial typically last?
While a Commercial Court specialised in high-value commercial cases is expected to be established soon, at the moment all commercial disputes are tried by the district courts in the same way as any other civil dispute. The procedure is that described in question 30, while 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 court’s workload.Use of juries
Are jury trials the norm, and can they be denied?
There is no jury system in Cyprus. Civil cases at first instance are heard by a single judge, while appeals are heard by a panel of three judges.Confidentiality
How is confidentiality treated? Can all evidence be publicly accessed? How can sensitive commercial information be protected? Is public access granted to the courts?
While commercial cases are tried in open court, pleadings and evidence adduced can only be accessed by the court and the parties to the proceedings. In addition, both the Constitution of Cyprus and the European Convention on Human Rights state that the press and the public may be excluded from all or any part of a trial ‘in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice’. (Article 6.1 of the European Convention on Human Rights).
Following the entering into force of the General Data Protection Regulation, the Supreme Court of Cyprus has also decided that judgments will be published without the first names of the parties and any aliases, while any other sensitive information not required to be disclosed may also not be published at the discretion of the court, subject to the principle of proportionality.Media interest
How is media interest dealt with? Is the media ever ordered not to report on certain information?
The press may be excluded from all or any part of the trial: see question 46.Proving claims
How are monetary claims valued and proved?
While a monetary claim may arise from various causes of action (eg, breach of contract, agreed sum, account stated, restitution), all elements of the claim, including the amount of the claim or the price, must in every case be proved by the claimant on the balance of probabilities.
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?
The court has discretion to decide whether costs will be payable by one party to another, and the amount of those costs as well as when they are to be paid. In general, costs follow the event, meaning that the unsuccessful party will be ordered to pay the costs of the successful party. All the circumstances of the case will, however, be taken into account, such as the conduct of the parties, whether the unsuccessful party has succeeded on part of his or her case and whether the legal issues in question were unprecedented. The costs are usually payable once the final judgment is given, and the amount is calculated by the court on the basis of fees prescribed by the Supreme Court of Cyprus.
A typical judgment in complex commercial cases will usually have the following structure:
- summary of the claims and pleadings;
- evidence adduced by each party;
- evidence accepted by the court;
- relevant legal principles in general;
- summary of legal arguments advanced by the parties;
- application of legal principles to the accepted evidence; and
The length of the judgment will depend on the volume and complexity of the evidence and the legal issues raised. Judgments are published online and are publicly accessible.Appeals
When can judgments be appealed? How many stages of appeal are there and how long do appeals tend to last?
The Supreme Court is the only appellate court in Cyprus. It has jurisdiction to hear and determine all appeals from lower courts in civil and criminal matters. A party may generally 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. The Supreme Court only hears evidence in exceptional and very rare circumstances, and may uphold, vary or set aside the decision appealed from, or order a retrial.
The length of the appeal depends on various factors including, for example, the urgency of the matter and the courts’ workload. Normally, appeals against final judgments will be heard within two to four years of filing, while appeals against interim judgments are usually heard sooner. It should be noted that in appropriate circumstances, the Supreme Court may determine an appeal on an expedited basis.Enforceability
How enforceable internationally are judgments from the courts in your jurisdiction?
Cypriot judgments are directly enforceable in other EU member states pursuant to Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters as well as to Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (which has been repealed by the Recast Brussels Regulation, but which continues to apply to judgments given in proceedings instituted before 10 January 2015).
Cypriot judgments may also be enforceable in non-EU member states with which Cyprus has entered into a multilateral or bilateral treaty to that effect. In particular, Cyprus has entered into bilateral treaties for the reciprocal recognition and enforcement of foreign judgments with Russia, Belarus, Georgia, Ukraine, China, Syria, Egypt, the Czech Republic, Slovakia, Hungary, Greece, Germany, Bulgaria, Serbia, Slovenia, Montenegro and Poland.
How do the courts in your jurisdiction support the process of enforcing foreign judgments?
Since its accession to the European Union, Cyprus is bound by the relevant European regulations and conventions, such as Regulations 1215/2012 and 44/2001 mentioned above, Regulation (EC) No. 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims and the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. Accordingly, foreign judgments that fall within the ambit of those regulations may be enforced in Cyprus pursuant to their provisions.
Cyprus has also entered into various multilateral and bilateral treaties that facilitate the recognition and enforcement of foreign judgments (see question 51; Cyprus has also entered into the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, the Hague Convention on the Recognition of Divorces and Legal Separations, the Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance, and the Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children).
It is also possible for a foreign judgment to be enforced at common law (usually when it does not fall within the ambit of a regulation or treaty) by bringing a fresh action or counterclaim on the foreign judgment (ie, on the obligation that the foreign judgment creates).
Other considerationsInteresting features
Are there any particularly interesting features or tactical advantages of litigating in this country not addressed in any of the previous questions?
As explained above, Cyprus law is still heavily based on the principles of common law and equity, allowing parties to benefit from the consistency, foreseeability and efficiency that common law systems tend to offer. The availability of equitable relief ensures that a claimant will be compensated even if common law remedies are inadequate, while the possibility to obtain freezing injunctions and disclosure orders provide an important practical tool for claimants seeking to ensure potential enforcement of judgments, looking for an early out-of-court settlement, or both. Other advantages include:
- pre-trial discovery and the pre-trial stage in general, which enable the parties to know beforehand the case advanced by the other party and thus not to get caught off guard;
- the enforceability of Cypriot judgments abroad; and
- the relatively low costs awarded against an unsuccessful party.
Are there any particular disadvantages of litigating in your jurisdiction, whether procedural or pragmatic?
While Cypriot courts are generally quick in determining applications for interim relief, the final adjudication of a case usually takes years. However, the recent decision of the government to establish a specialised Commercial Court and the imminent appointment of additional permanent judges are expected to address delays and enable courts to resolve cases faster.Special considerations
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 set out general considerations for defending a claim as each claim involves different facts, parties and objectives. As a general comment, the first issue that a defendant must consider is whether the service or order authorising such service must be challenged and whether the Cypriot court has rightfully assumed jurisdiction.
Updates and trendsKey developments of the past year
What were the key cases, decisions, judgements and policy and legislative developments of the past year?Key developments of the past year56 What were the key cases, decisions, judgments and policy and legislative developments of the past year?
An interesting, modified version of the conventional freezing order was sought and issued by the District Court of Larnaka in the past year: the ‘notification injunction’ previously issued by the High Court of Justice in England. This kind of injunction requires a defendant to notify the claimant before disposing of or dealing with its assets and is generally considered to be less intrusive than the conventional freezing order, a factor which is highly relevant when considering the overall justice and convenience of granting an injunction.
A global anti-enforcement injunction was also recently granted by the District Court of Limassol restraining a party from commencing judgment enforcement proceedings anywhere in the world.
Other notable developments of the past year include the enactment of Law 45(I)/2019, which introduces a Registry of Sworn Translators and which is particularly relevant in cross-border commercial disputes requiring certified translations of documents, and the signing of the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, which the Hague Conference on Private International Law has described as ‘a true gamechanger in international dispute resolution’.