Enforcement of foreign arbitral awards -Cypriot Courts adopt a pragmatic and pro international business approach

Posted on 23 Jun 2020, by Menelaos Kyprianou

In a recent judgment in which the writer was involved, the District Court of Nicosia (Judgment of President Mrs. Lena Demetriades) examined the preconditions for the enforcement in Cyprus of a foreign arbitral award.

The arbitral award had been issued by the London Court of International Arbitration and its enforcement in Cyprus (where the respondent has assets) was sought on the basis of The Convention on the Recognition and Enforcement of Foreign Arbitral Awards dated 10 June 1958 (commonly known as ‘the New York Convention’). Cyprus became a signatory to the New York Convention and later ratified the same with the passing of a local law (Law 84/79).

On the basis of the New York Convention, the enforcement of a foreign arbitral award is possible only if very strict requirements are met. Amongst them is the need to present before the local court:

  1. the duly authenticated original of the foreign arbitration award or a duly certified copy thereof;
  2. the original agreement under which the parties had undertaken to submit to arbitration their dispute in question.

The issue that arose in this case was that the applicant was not in a position to present to the court the second of the above-mentioned documents. This is because this had been seized by the Russian police in the context of an investigation currently pending against the respondent.

The applicant was, however, able to adduce cogent surrounding evidence which included a written statement from the Russian police that the original agreement was indeed in their possession and also a formal letter from the London Court of International Arbitration which attested that the copy that the applicant possessed was indeed genuine.

On the basis of the above, the District Court of Nicosia allowed the application citing, amongst others, the following excerpt from the leading textbook ‘Guide to the Interpretation of the 1958 New York Convention: A Handbook for Judges (May 2012 Edition)’pages 14-15:

“The purpose of the New York Convention is to promote international commerce and the settlement of international disputes through arbitration. It aims at facilitating the recognition and enforcement of foreign arbitral awards and the enforcement of arbitration agreements. Consequently, courts should adopt a pro enforcement approach when interpreting the Convention”.

The writer believes that this decision should be hailed as another example where the Cyprus courts have adopted a fair, pragmatic and pro international business approach in their judgments.