Cyprus: Enforcement Of Foreign Court Judgments In Cyprus

In order to maintain economic relations between persons and companies from different countries and to secure their business interests, it is important to ensure the recognition and enforcement of foreign judgments on the territory of foreign countries.

In general, the judgment rendered by a court is binding upon the parties of the proceedings within the territory of a particular country. The issue of recognition and enforcement of foreign judgments is regulated by legislation of each particular country and international treaties to which such country is a party. The recognition of a foreign judgment serves as confirmation of respective foreign civil rights and obligations in Cyprus and is a prerequisite for enforcing the judgment, which involves additional requirements.

Are there any legal distinctions between recognizing a judgment and the enforcement procedure?

Yes, both legal procedures are different, though they are interconnected.

  1. Recognition of a foreign judgment is a mandatory requirement, failure to comply with the results makes enforcement of a judgment impossible. . In other words, a foreign judgment is not valid in Cyprus until it has been recognized through registration of such judgment in Court. After its recognition and registration, such decision has the same status as a national judgment and may be enforced thereafter.
  2. The purposes of both procedures are different as the purpose of recognition of foreign judgment is to admit it to enforcement, while the purpose of enforcement is to get hold of money or property situated in Cyprus, awarded by the foreign court.
  3. The procedural requirements for recognition and enforcement differ.

What is the legal framework under which a foreign judgment will be recognized and enforced in Cyprus?

Cyprus is a signatory to the following multilateral conventions relating to the recognition and enforcement of foreign judgments:

  • Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters and Supplementary Protocol thereto (Hague Convention;
  • Convention on the Recovery Abroad of Maintenance (Ratification);
  • European Convention on the Recognition and Enforcement of Decisions concerning the Custody and/or Restoration of Custody of Children;
  • European Convention on the Recognition and Enforcement of Foreign Arbitral Awards;
  • European Convention on the Recognition and Enforcement on Certain International Aspects of Bankruptcy;

New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Different procedural mechanisms may be used to recognise and enforce a foreign judgment depending on the nationality of the court issuing the judgment.

Enforcement of EU Judgments:

The following are the relevant applicable regulations in relation to the enforcement of EU-judgments:

  • EC Regulation No 44/2001 on the recognition and enforcement of judgments in civil and commercial matters. Though it was repealed by Regulation 1215/2012, it continues to apply to judgments given by the Courts of Member States (except Denmark) in legal proceeding instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded before 10 January 2015 that fall within its scope. This original Regulation is expected to fall into disuse after a short period of transition.
  • Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. This Regulation applies to judgments issued on or after 10 January 2015.
  • EC Regulation No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims. The said Regulation applies to uncontested claims.
  • Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure.
Enforcement of non-EU Judgments:

Cyprus is a party to a number of bilateral and multilateral international treaties for reciprocal recognition and enforcement concluded with Germany, China, Belarus, the Czech Republic, Montenegro, Serbia, Slovenia, Poland, Slovakia, Bulgaria, Ukraine, Russia, Georgia, Greece, Syria, Egypt and Hungary.

With regard to non-EU judgments domestic legislation will be applied, namely:

  • Foreign Courts Judgments (Recognition, Registration and Enforcement) Law (121(I)/2000), which regulates the issue of pursuing recognition and enforcement of foreign judgments based on bilateral or multilateral treaties and conventions between Cyprus and third (non-EU) countries;
  • Foreign Judgments (Reciprocal Enforcement) Law of 1935, Cap 10, as amended by the Reciprocal Execution of certain Judgments of the Commonwealth Countries Law, 130(I) of 2000 (based on the English Foreign Judgments (Reciprocal Enforcement) Act 1933), which applies to creditors who obtained judgments of superior courts in the UK.

Common law rules apply to the recognition of judgments in civil and commercial matters which originate from jurisdictions outside the EU that have not concluded relevant treaties with Cyprus, provided that the applicable domestic legislation is absent (is not available). The creditor will need to bring an action in common law or raise a counterclaim on the foreign judgment.

Enforcement of EU Judgments in Cyprus

What is the main principle for enforcement of an EU judgment in Cyprus?

On 1 May, 2004 the Republic of Cyprus became a member of the European Union, therefore there is no need to implement the above-mentioned EC Regulations into the national legislation of Cyprus. From the above date all Regulations of the EU will have direct effect within Cyprus as a Member State. It is important to note that they shall not be applied to the north part of Cyprus (approximately one third of the total area) which has been occupied by Turkish forces since 1974.

What is the scope of application of the above-mentioned EC Regulations, and which relationships are beyond its scope?

EC Regulation No 44/2001, Regulation (EU) No 1215/2012 and EC Regulation No 805/2004 shall apply in civil and commercial matters, whatever the nature of the court and tribunal. However, they shall not be extended to revenue, customs or administrative matters, or to the liability of the State for acts and omissions in the exercise of State authority. A foreign judgment must be final and conclusive. In addition, the judgment against the defendant must be given by a court of competent jurisdiction (to be determined under Cypriot conflict of law rules). The judgment shall not be obtained by fraud.

Certain matters remain outside the scope thereof, such as disputes relating to bankruptcy and winding-up of insolvent companies; family law, social security, wills and succession; arbitration (with the aim of avoiding conflict with valid international conventions on arbitration, such as the New York Convention of 1958).

Do the courts of Cyprus have the authority to review the substance and merits of judgment?

No, under no circumstances do the courts of Cyprus have authority to review the substance and merits of judgment. A European judgment sought to be recognized and enforced in Cyprus is presumed to meet the established requirements.

Which EU judgments are not subject to recognition and enforcement?

EC Regulations set out the cases where EU judgments cannot be recognized and enforced:

  • If such recognition is manifestly contrary to public policy in Cyprus;
  • Where the judgment was given in default of appearance, if the defendant was not served with the document which instituted proceedings in sufficient time, and in such a way, as to enable him to arrange for his/her defence;
  • If it is irreconcilable with a judgment given in a dispute between the same parties in Cyprus;
  • If it is irreconcilable with an earlier judgment given in another Member State or in a third State involving the same cause of action and between the same parties, then the earlier judgment shall satisfy the conditions necessary for its recognition in Cyprus.

Which documents are required for recognition and enforcement of an EU judgment?

EC Regulation No 44/2001, Regulation (EU) No 1215/2012 and EC Regulation 805/2004 stipulate which documents should be submitted with the purpose of recognition and enforcement of EU judgments.

According to EC Regulation No 44/2001, a declaration of enforceability is required for the enforcement of relevant judgments, and such certificate of enforceability will be issued by the competent Court of a Member State which issued a judgment. The interested party applying for a declaration of enforceability shall produce a copy of the judgment which satisfies the conditions necessary to establish its authenticity and a certificate using the standard form established by the EC Regulation. If a judgment given in a Member State, on the application of any interested party, has been declared enforceable in such a State, then it shall be enforced in Cyprus. A translation of the documents and certification of the judgment may be required by the Court or competent authority.

Regulation (EU) No 1215/2012 abolished the above-mentioned requirements on enforcement of an EU judgment. According to Article 39 of the relevant Regulation, a judgment given in a Member State which is enforceable in that Member State shall be enforceable in Cyprus without any declaration of enforceability being required. However, in order to pursue enforcement, an interested party is required to submit a copy of the judgment which satisfies the conditions necessary to establish its authenticity and a certificate issued pursuant to the applicable Regulation, certifying that the judgment is enforceable.

EC Regulation 805/2004 provides that the judgment creditor is only required to submit the competent authorities of Cyprus: (a) a copy of the judgment; (b) a copy of the European Enforcement Order certificate (the procedure on conducting the appropriate procedure is regulated by the relevant EC Regulation); and (c) if applicable, a certified translation into a relevant official language.

Enforcement of non-EU Judgments

What is the legal framework under which non-EU judgments will be recognized and enforced in Cyprus?

Cyprus is a party to a number of bilateral and multilateral international treaties which cover issues of mutual legal assistance between the Contracting States, including the issue of recognition and enforcement of judgments. Cyprus has concluded the above-mentioned international treaties with the following countries:

  • Ukraine, Rat. Law 8/2005.
  • Syria, Rat. Law 160/86, 13/97;
  • States of former Soviet Union (Russian Federation, Ukraine, Belarus, Georgia), Rat. Law 172/86;
  • Egypt, Rat. Law 32(III)/96;
  • China, Rat. Law 19(III)/95;
  • Germany, Rat. Law 5/84;
  • Bulgaria, Rat. Law 18/84;
  • Greece, Rat. Law 55/84;
  • Hungary, Rat. Law 7/83;
  • States of former Yugoslavia (Serbia, Slovenia), Rat. Law 179/86;
  • Czech Republic, Rat. Law 68/82;
  • Poland, Rat. Law 10(III)/97.

There are also EU Member States among the above-mentioned States that signed international treaties with Cyprus prior to its accession to the EU which are still in force:

With respect to non-EU judgments, domestic legislation will also be applied, namely Foreign Courts Judgments (Recognition, Registration and Enforcement) Law (121(I)/2000), which regulates the issue of pursuing recognition and enforcement of foreign judgments based on bilateral or multilateral treaties and conventions between Cyprus and third (non-EU) countries.

As this Law stipulates, the Civil Procedure Rules of Cyprus will be applied. It also provides that an application by summons and an affidavit shall be submitted to the District Court of Cyprus.

What is the procedure for enforcement of foreign non-EU judgments of each particular country?

In each particular case the Court will refer to an applicable bilateral or multilateral international treaty concluded with the respective country.

For instance, the Treaty with the Russian Federation provides that the competent court to which an appropriate application requesting its recognition and enforcement shall be submitted is to be determined depending on the fact of residency of a judgment creditor in Cyprus.

  1. If a judgment creditor is not a resident of Cyprus, the application shall be filed with an institution of justice (judicial authority) of the Russian Federation.Thereafter, the appropriate institution will forward the application to the competent court of Cyprus.
  2. If a judgment creditor is a resident of Cyprus, its application may be submitted directly to the competent court of Cyprus. For recognition and enforcement of a judgment of the Russian court the Court of Cyprus shall adopt an appropriate decision.

According to the Treaty with Ukraine, a party seeking an enforcement of judgment of a Ukrainian court may file an application for recognition and enforcement either directly to the Cypriot court or to the Court that made the respective judgment. In the latter case the Court will forward the application submitted by an interested party to the Court of Cyprus in the manner prescribed by the Treaty. The Court shall make an appropriate decision as to the recognition and enforcement without undue delay.

What are the conditions for enforcement of foreign judgments in Cyprus?

The respective conditions are set out by the Law (121(I)/2000) and applicable international treaty in each particular case.

As a rule, the foreign judgment is subject to enforcement if the following conditions are observed:

  • the foreign judgment is not contrary to the public policy of Cyprus;
  • the foreign judgment has been made by a court of a competent jurisdiction in compliance with the conflict of law rules of Cyprus;
  • the respective proceedings were not contrary to the laws of natural justice;
  • the foreign judgment was not obtained by fraud.

A number of international treaties set out additional requirements which are individual in each particular case depending on the country issuing a judgment: such a judgment shall be final and shall come into legal force; there shall be no earlier judgment involving the same cause of action and between the same parties (Treaty with the Russian Federation); the respective judgment shall not contradict the basic principles and legislation of Cyprus (Treaty with Ukraine) etc.

Which rules will apply to enforcement of non-EU judgments in case of absence of the respective international treaty?

  • Common law rules apply to the recognition and enforcement of civil and commercial judgments issued by EU-countries that have not concluded relevant international treaties with Cyprus, provided that the applicable domestic legislation is absent (is not available). The creditor will need to bring an action in common law or raise a counterclaim on the foreign judgment.

Recognition and Enforcement of Foreign Arbitral Awards

What is the legal framework under which foreign arbitral awards will be recognized and enforced in Cyprus?

Cyprus is a signatory to the following multilateral conventions relating to the recognition and enforcement of foreign arbitral awards:

  • European Convention on the Recognition and Enforcement of Foreign Arbitral Awards;
  • New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).

The New York Convention, as the most important international act in the area of international trade law, has been ratified and implemented in Cyprus by the Law on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Ratification) No 84/1979. The other significant act of Cypriot national legislation is the Law on International Arbitration in Commercial Matters Law No 101/1987.

What is the significance of the New York Convention?

The majority of countries around the globe have joined the New York Convention, which makes it an effective instrument in the field of international arbitration.

The New York Convention creates a uniform international framework, which enables the interested party to enforce foreign arbitral award in another jurisdiction without any difficulties due to the establishment of the following principles:

  • Requiring the courts of a Member State to recognize and enforce a foreign arbitral award in accordance with its own procedural rules;
  • Limiting the grounds upon which the courts of a Member State may refuse to recognize and enforce a foreign arbitral award.

Do the conditions of enforcement of foreign arbitral awards differ from the conditions of enforcement of domestic arbitral awards?

According to the New York Convention more onerous conditions or higher fees or charges on the recognition or enforcement of foreign arbitral awards may not be imposed in comparison with those imposed on the recognition or enforcement of domestic arbitral awards.

Do the courts of Cyprus have the authority to review the substance and merits of a foreign arbitral award?

No, under no circumstances do Cypriot courts have the authority to review the substance and merits of a foreign arbitral award. However, a court may examine it for the purposes of verifying the grounds for refusal of enforcement set out below.

Which documents shall be submitted to the court in Cyprus with the aim of getting recognition and enforcement of a foreign arbitral award?

For the above-mentioned purpose the arbitral award creditor shall produce:

  • The original arbitral award, or a relevant duly certified copy;
  • The original of the arbitration agreement (arbitral clause in a contract or a separate arbitration agreement) or a relevant duly certified copy;
  • A translation of these documents if they are not made in the official languages of Cyprus. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

Can the recognition and enforcement of a foreign arbitral award be refused in Cyprus?

Several grounds for refusal of the recognition and enforcement of the foreign arbitral awards are listed in the New York Convention (and in respective national laws of Cyprus), and the relevant list is exhaustive. Furthermore, it is important to note that the grounds for refusal will not be applied automatically. The New York Convention sets out a number of grounds which shall be applied at the request of the party against whom the arbitral award is invoked, and the remaining grounds shall be applied at the own discretion of the relevant Court.

The first list includes, for instance, cases where: the parties to the arbitration agreement were under some incapacity; the relevant arbitration agreement is not valid under the relevant law chosen by the parties as an applicable law with respect to the arbitration agreement; the other party was not given proper notice of the appointment of the arbitrator or of the arbitration procedure; the composition of the arbitral tribunal or of the arbitral procedure do not comply with the arbitration agreement; the arbitral award has not yet become binding on the parties or has been set aside, or suspended by the competent Court of the relevant State, etc.

The second list includes cases where: the subject matter of the relevant dispute is not subject to settlement by arbitration under the law of Cyprus ("non-arbitrability" of the subject matter); or the recognition or enforcement of the foreign arbitral award would be contrary to the public policy of Cyprus.

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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