Mediation in Cyprus

Posted on 31 Aug 2020, by Rosalia Klimova

Mediation in Cyprus is governed by the Certain Aspects of Mediation in Civil Matters Law 159(I)/12) and covers commercial and civil disputes. It is applied to all civil disputes pending before a Cypriot Court, irrespective of whether the parties are nationals of Cyprus, EU member State nationals or non-EU State nationals.

Initiation

The process of mediation is initiated by an agreement to mediate which, according to the Law, must incorporate certain components. It must include the procedural rules that are to be applied, a specified limitation period on the duration of the process, a confidentiality agreement, the appointment of a mediator and the determination of their fees and any other subject of importance to the parties.

The appeal of mediation is its contractual nature, as the agreement to mediate is activated either by initiation of the parties themselves in an out-of-court agreement or the result of court-annexed dispute resolution. Even in the latter scenario, the process and its success rely entirely on the parties’ decision to voluntarily engage in mediation and the Law provides for a number of safeguards to protect this consensual foundation and enable the creation of a neutral and common ground on which to mediate.

Role of Courts

The role of the Cypriot Courts is that of a supervisory nature, reinforcing the parties’ autonomy. They are empowered to grant a stay of judicial proceedings in favour of mediation, but, importantly, parties cannot be compelled to mediate or denied the opportunity to do so. This approach is in line with the Law which does not offer any incentives to mediate nor does it sanction parties who fail to do so. This highlights how the voluntary element permeates this alternative dispute resolution method.

Mediation Procedure

Parties have great freedom in controlling the process as they can jointly choose the mediator who then accordingly organises the process around their preferences. Through the mediator, the parties can agree on the time, place, language of the process and their representation, but at their own cost.

Confidentiality

The beneficial aspect of mediation is the importance placed on confidentiality. The Law provides that the parties, including the mediator or any other participant to the process, cannot divulge any information that was discussed during the mediation process in any subsequent civil and commercial proceedings or any arbitration. The law presents two exceptions to the privilege of confidentiality: (i) when there are overriding public policy concerns or (ii) when disclosure of information is necessary as to enforce the agreement. These exceptions are treated strictly and confidentiality cannot be curtailed for any other reasons.

Enforcing a Mediation Settlement

Each party can file an application to the Court for the enforcement of the mediation settlement, either jointly or independently, provided that there is explicit consent from the other side, or the consent has been given in the mediation settlement. The Court then issues a declaration of the enforceability of the mediation settlement, in part or in whole, which has the same legal and binding effect as a judgment or order. Furthermore, the Court can also issue a judgment reinforcing the content of the mediation settlement.

Termination of Mediation

The mediation process may be terminated for a number of reasons including the following:

  • The parties have reached a settlement agreement;
  • The mediator records that an agreement was not reached;
  • The parties agree to terminate the process;
  • One of the parties withdraws its consent;
  • The mediator deems the continuation of the process futile or unconducive;
  • The mediator considers the agreement reached to be illegal; and/or
  • The mediator considers that the agreement will be unacceptable to the Court.

The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Rosalia Klimova, Legal Consultant at Rosalia.klimova@kyprianou.com