Loading...

Recognition and execution of foreign arbitral awards in Cyprus

topic

The operation of recognition, registration and enforcement of arbitral awards in Cyprus is governed by a framework of three distinct yet complimentary pieces of legislation that comprehensively cover this field, set out below.

As a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards commonly known as the New York Convention, adopted on the 10 June 1958 (the “New York Convention”), Cyprus codified its provisions by transposing them into domestic legislation in the form of the Ratifying Law on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1979 (Law 84/1979). 

This is supplemented by the International Commercial Arbitration Law of 1987 (Law 101/1987), which is modelled after the UNCITRAL Model Law with minor amendments. Pursuant to Law 101/1987, international commercial arbitral awards can be recognized and registered regardless of the country which issued them, thus broadening the operational scope of enforcement of arbitral awards to countries which have not ratified the New York Convention.

Criteria and Procedure

Pursuant to Article IV of the New York Convention as transposed by Law 84/1979, an applicant must provide:

  • a duly authenticated original award or duly certified copy of it;
  • the original arbitration agreement or a duly certified copy of it; and
  • a translation of the above documents into Greek (official language of the country in which the award is relied upon) by an official or sworn translator, or by a diplomatic or consular agent.

The above procedural preconditions are mirrored in Section 35 of Law 101/1987.

A Cyprus Court can refuse the recognition and registration of an international arbitral award only on the basis of the grounds stipulated in Article V of the New York Convention, as transposed in Law 84/1979, which are the following:

  • some incapacity of the parties or invalidity of the arbitration agreement; or
  • failure to give proper notice of the appointment of the arbitrator or of the arbitration proceedings to the party against whom the award is invoked or that a party was otherwise unable to present his case; or
  • the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration; or
  • the composition of the arbitral authority or the arbitral procedure was not according to the parties’ agreement or failing such agreement, was not according to the law of the country where the arbitration took place; or
  • the award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

Furthermore, additional grounds are provided by Section 36 of Law 101/1987, which  relate to the finding by a Court that:

  • the subject matter of the dispute is not capable of settlement by arbitration under the law of Cyprus; or
  • the recognition or enforcement of the award is contrary to the public order of Cyprus.

Pursuant to Section 5 of the Foreign Courts Judgments (Recognition, Registration and Enforcement) Law of 2000 (Law 121(I)/2000), which applies to any foreign Court judgment or arbitral award or decision of a foreign body of a country which Cyprus has signed relevant bilateral treaties with and such judgment or award is enforceable in the country in which it is issued. Applications for the recognition and registration of international arbitral awards are commenced with an application by summons accompanied by an affidavit submitted to the competent District Court. Pursuant to Section 2 of the Law 121(I)/2000 and as has been stated obiter with regards to recognition and registration of foreign judgements, and which can be similarly applied to arbitral awards, in the Supreme Court of Cyprus case VTB Bank (Open Joint-Stock Company) v Taruta Sergey Alekseyevich, General Application number: 378/14 judgment dated12/06/2020 , in order for Cyprus Courts to assume jurisdiction, either the respondent or, in cases where the respondent resides abroad, the applicant must be residing in Cyprus.

Execution stage 

Once an international arbitral award has been recognized and successfully registered in Cyprus, it obtains the same legal status as a domestic judgment and Courts will treat it as such for purposes of execution. An applicant can thus expect execution to take form in the following methods of execution in relation to monetary claims:

  • seizure and sale of movable property,
  • sale of immovable property or charging immovable property,
  • sequestration of property,
  • attachment of property,
  • ordering the delivery of movable or immovable property,
  • examining the judgment debtor before the Court for the issuance of a Court Order for payment in instalments, encumbrance of an interest on company shares and stocks,
  • judgment creditors may also consider applying for the liquidation of companies where the relevant judgment or award registered relate to legal entities registered in Cyprus.

Cyprus demonstrates an overall pro-enforcement approach both legislatively and judicially. Cyprus Courts have restricted their role to that of procedural supervision as to uphold the pro-enforcement spirit of the applicable international instruments. Furthermore, the enactment of the Registration and Regulation of Sworn Translators of 2019 (Law 45(I)/2019) providing for a Registry of registered translators, has resolved the issue previously experienced as to whose translations the Courts will consider as official, thus circumventing minor technicalities surrounding the matter. Furthermore, a proposal for the introduction of a new improved law regulating the recognition and enforcement of foreign arbitral awards is currently in discussions and thus it is expected that Cyprus will become an even more pro-enforcement jurisdiction.

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, Associate at Tel: 25363685 or via email at Rosalia.klimova@kyprianou.com

BROWSE RELATED PRACTICES