Arbitration is an alternative method of resolving disputes outside the traditional method of courts. In this case, the parties shall, by mutual agreement, choose and submit their disputes, and gives discretionary powers to an impartial person specializing in the subject matter of the dispute to be resolved. The parties also have the opportunity to choose the place and language of the arbitration procedure and the law applicable to the dispute. The Arbitral Tribunal's decisions are final, binding and enforceable both internally and abroad, as in court rulings.
In order to trigger the start of proceedings of the Arbitral Tribunal, the parties must either have agreed in writing to refer any dispute directly to arbitration or, by agreement, to refer a dispute to the Arbitral Tribunal, in court proceedings that are already pending, before the Arbitral Tribunal Court of Justice. Companies often include in their international contracts a clause to refer to arbitration, so that if any dispute arises in relation to the agreement they are obliged to arbitrate instead of following a dispute settlement through the courts.
The advantages of Arbitration over the Court are that the settlement of the dispute with arbitration is usually quicker and less costly. In accordance with the Arbitration Rules of the Arbitration Court, the Arbitrator must finalize the proceedings and take a decision within nine months, which is an unlikely period through the national courts. Also, the procedural rules in Arbitration are flexible and can be adapted to the particular nature of each case and to the specific needs and wishes of the parties.
A further advantage of Arbitration is that it has a beneficial effect on the normal course of justice as it frees the courts from cases which can be resolved out of court. This certainly has a positive impact on the economy as it offers a rapid solution in situations where the financial aspects are complicated. In addition, the speed of dispute handling and confidentiality are of particular importance especially to businesses and, generally, to all the parties involved.
There is no restriction on the kind of litigation that the Arbitral Tribunal can resolve. In Cyprus, the Arbitration Procedure is governed by the Arbitration Law (Chapter 4), the 1979 Convention on the Recognition and Enforcement of Foreign Arbitration (Ratification) Law (Law 84/1979) and the International Commercial Arbitration Law of 1987 (N.101/1987).
Law No. 101/1997, which applies only to international commercial arbitrations, defines international arbitration as the arbitration between the parties having their place of business in different countries and defines commercial arbitration as referring to matters arising from relationships of a commercial nature, whether conventional or not.
By decision of the European Arbitration Centre, this Centre will be expanded to establish a Cyprus Court of Arbitration in Cyprus.
Cypriot law is an attractive choice of law to conduct international arbitration to resolve commercial and economic disputes, as it has a specific legal framework for conducting international commercial arbitrations and a high level of professional legal service. Also, due to its strategic position, Cyprus can be established as an international centre for the settlement of commercial disputes through arbitration for the surrounding area, from which Cypriot and foreign businessmen can benefit.
The law firm, Michael Kyprianou & Co. LLC, provides legal services and advice at all stages and levels of the dispute settlement procedure through international arbitration.
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Specialized legal advice is provided in each specific case. For further information contact Ritsa Pekri.