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A new Commercial Court is finally established in Cyprus, where English can be used

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On 12 May 2022 the Cyprus Parliament enacted a law establishing a Commercial Court and an Admiralty Court in Cyprus. In the present article, we focus on the Commercial Court.

The establishment of a Commercial Court to hear and determine commercial disputes will contribute substantially to the speedy adjudication of commercial disputes, it will address the problem of backlogged cases, it will strengthen the competitiveness of Cyprus as a centre for providing high-quality services and it will also attract foreign investments in the current very turbulent economic environment, contributing to Cyprus’ long-term economic development.

The Commercial Court will have jurisdiction to hear and determine at first instance all commercial disputes where the amount or value in dispute is not less than €2.000.000 (Two Million Euros) albeit with some exceptions as explained below.

A ‘commercial dispute’ is defined in the Establishment and Operation of Commercial Court and Admiralty Court Act 2022 (‘the Act’) as a dispute or matter arising out of or relating to the following:

  • business document or contract;
  • purchase, sale, import, export of goods;
  • transportation of goods by land, air or pipeline;
  • exploitation of oil, gas or other natural resources;
  • insurance and reinsurance;
  • operation of markets or exchange of stocks, shares or other financial or investment instruments or goods;
  • provision of services, except medical and other related services or any service provided in the context of an employment contract;
  • manufacture of vehicles;
  • commercial agency;
  • infringement of competition issues;
  • disputes between shareholders supervised by any supervisory authority in the Republic;
  • intellectual property and related rights issues;
  • arbitration issues.

The Act excludes a claim or counterclaim for damages for personal injury and a claim or counterclaim or registration of an arbitral award in relation to banking and/or financial matters.

It is also noted that disputes under (j), (l) and (m) above, i.e. infringement of competition issues, intellectual property issues and arbitration issues, fall under the jurisdiction of the Commercial Court regardless of the disputed amount or the value of the dispute in question. Thus, the Commercial Court will hear such disputes, even when the value is less than €2.000.000 (Two Million Euros).

What is of particular interest as well, is the fact that the Act specifically provides that the parties, which may have no connection to Cyprus whatsoever, can jointly decide with an agreement in writing, that in case of any dispute, the dispute shall be referred to and resolved by the Commercial Court.

It is also noted that any of the parties in a case pending before the District Court, which satisfies the definition of a ‘commercial dispute’, the hearing of which has not yet started, can apply and seek the transfer of the case to the Commercial Court. This basically aims to cover the cases that were filed prior to the establishment of the Commercial Court and are thus pending before the District Court. As per the wording of the Act, the consent of all the relevant parties in a case, is not a prerequisite for such a transfer to be made but, at the same time, there is no guidance as to the grounds that should be taken into consideration before the Judge decides whether to proceed with the transfer. It is also noted that a similar application can be filed when a case is pending before the Commercial Court for its transfer to the District Court and again there is no guidance as to when such transfer would be approved.

English language

Prior to the commencement of the Act, the Cypriot Parliament approved the amendment of Article 3 of the Constitution of the Republic of Cyprus, to allow the use of the English language in the newly established Commercial Court.

Specifically, the amended Article 3(4) of the Constitution, now reads that the Commercial Court and a higher Court thereof, when considering or reviewing a decision or order of the first instance Commercial Court, may allow the use of the English language in proceedings before it, including the filing of a written address or of a pleading or of a document or evidence in English. Additionally, the Court may draft a judgment or order in English.

In other words, whereas Greek remains the official Court language, a Judge of the Commercial Court, may, when the interest of justice so requires, allow the legal proceedings to be conducted and the documents to be filed in English, at the request of one of the parties. In such a case, the Judge shall specify that English is the language in which the proceedings are conducted and in which the judgment of the Commercial Court will be issued.

The Commercial Court will consist of five judges with broad knowledge of commercial disputes and/or proven experience in handling court cases which fall under the jurisdiction of the Commercial Court having also a very good knowledge of the English language.

The Commercial Court Judges have a discretionary power to issue interim orders, such as freezing injunctions, similar to those issued by the District Court Judges.

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 a specific matter before acting on any information provided. For further information, please contact Marina Hadjisoteriou, Partner or Stavriani Sofroni, Legal Consultant, at Tel +357 25363685 or via email at Marina.Hadjisoteriou@kyprianou.com and Stavriani.Sofroni@kyprianou.com