Cyprus: Rules Of Jurisdiction Under Cyprus Law

The European Union in 2000 adopted the Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in court cases. This Regulation lays down the rules on court's jurisdiction with an international dimension involving more than one Member State. Furthermore, it provides a harmonized approach in determining which EU Member State court should have jurisdiction over a dispute and how judgments from courts in one EU Member State should be recognized and enforced in other EU Member States.

From January 1, 2015 on, the Regulation (EU) No 1215/2012, of the European Parliament and the Council of 12 December, 2012, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I-bis") applies replacing the Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The goal of this new Regulation is to create international jurisdiction and lis pendens, that will improve fundamental aspects such as recognition and enforcement of decisions. The Regulation has a key role in forming a complete European procedural international law that prevails in the relations between the EU members and limits the practical significance of national procedural law. It replaces the Regulation 44/2001, repeating primarily its provisions and exceptionally introducing new and revising old ones. Cyprus as a Member State of the EU is bound by Brussels I-bis Regulation.

This article confines to the part concerning the cases, which, Cypriot courts based on the above Regulation, have jurisdiction to solve a dispute with an international dimension. This point is the most significant of all, since once you are involved in a judicial procedure, or if you expect to be involved in one, you will need to identify the court that has jurisdiction.

The basic principle is that jurisdiction is to be exercised by the Court of the EU State, in which the defendant is domiciled, regardless of his/her nationality. So, if the defendant is domiciled in Cyprus, the Cypriot courts have jurisdiction to resolve the dispute. Nevertheless, the Regulation contains a number of provisions that depart from this principle and allows court proceedings to take place in another Member State, other than where the defendant is domiciled. The most important examples of these exemption rules are:

  1. In matters relating to a contractual obligation a person can be sued in the courts of the place of performance of that obligation.
  2. In a case involving damages, the courts of the place where the harmful event occurred are competent. Sometimes the place of the event gives rise to liability in tort and the place where that damage results are not located in the same Member State. In that case the plaintiff is free to select the court of any of those Member States (See Case 21/76 Bier v Mines de potasse d'alsace).
  3. in matters relating to maintenance, the maintenance creditor can turn to the courts of the Member State in which he himself is domiciled.
  4. In some contractual relationships that are characterized by a marked imbalance of power between the parties such as matters relating to consumer contracts, insurance and to individual contracts of employment the weaker party is deemed to be in need of special protection. As a general rule, the weaker parties (the consumer, the insured and the employee) can only be sued in the Member State where they are domiciled. The stronger parties (the dealer, the insurer, the employer), on the other hand, can also be sued (sometimes subject to certain conditions, in the Member State) where the weaker party is domiciled or as regards employment contracts, where the work is carried out.

To sum up, if the place of performance of the obligation or the place where the harmful event occurred is Cyprus, if the maintenance creditor or the weaker party is domiciled in Cyprus or if the work is carried out in Cyprus, then the Cypriot courts have jurisdiction to resolve the dispute.

The rules on special jurisdiction listed above constitute an additional option for the plaintiff who can also choose to sue the defendant in the courts of the Member State in which that person is domiciled. However, there are several cases of so-called exclusive jurisdiction that do not supplement but replace the jurisdiction based on the defendant's domicile such as:

  1. In matters relating to the ownership or tenancy of immovable property, only the courts of the Member State where the property is situated have jurisdiction.
  2. In matters relating to rights that have to be registered such as patents or trademarks, the courts of the Member State in which the registration has taken place are exclusively competent.
  3. Subject to some conditions, the parties also have the possibility of freely choosing the Member State whose courts are to have jurisdiction. Such a choice of court agreement usually leads to the exclusive competence of the courts of the chosen Member State unless the parties stipulate otherwise.

In other words, the Cypriot courts have exclusive jurisdiction to resolve the dispute, if the property is situated in Cyprus, if the registration has taken place in Cyprus or if the parties freely choose the Cypriot courts to have jurisdiction. What is necessary to mention is that, subject to certain exceptions, the mere fact that the defendant enters an appearance in court, leads to the jurisdiction of the courts of that Member State even if they are not ordinarily competent.

Also, it may happen that both parties of a dispute initiate court proceedings on the same matter in different Member States. In this case the Regulation establishes a "first come first served" rule. The second court used has to stay its proceedings and wait for the other court to decide on its jurisdiction. If the first court considers itself competent, the other court has to dismiss the case. Only if the first court comes to the conclusion that it does not have jurisdiction, the other court can continue its proceedings. Νevertheless, a new exception was introduced in the new article 31, which gives preference to the court that is hearing the case due to a prorogation of jurisdiction agreement.

It is worth mentioning that, the International commercial arbitration is an alternative method of resolving disputes arising from commercial transactions between private parties across national borders that allows the parties to avoid litigation in national courts.

In conclusion, private international law is considered a particularly difficult, very technical juridical branch. Not surprisingly, it is considered as the "nuclear physics" of legal science. But if one understands the peculiarities and its mechanisms, then he is fascinated by the variety of issues that arise within and from the logical processes required for their solution. The charm is enhanced by the fact that private international law is the window to the legal world outside their country, which provides a diverse view and is constantly changing. It is no exaggeration to say, that almost everything new that appears in legal science comes largely from the private international law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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