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This article discusses Cyprus-seated international arbitration in light of the adoption of the UNCITRAL Model Law by legislation passed in 1987 and with particular reference to the passage of amending legislation in 2024 to align the earlier legislation with the 2006 version of the Model Law. The article also discusses the recognition and enforcement of foreign arbitral awards under the New York Convention and consultation on a draft arbitration bill that, it is hoped, will culminate in a new Arbitration Law by late 2025 or early 2026.
Introduction to the legal framework governing arbitration in Cyprus
There are two laws governing arbitration in Cyprus. The British colonial era Arbitration Law 1944 (Cap 4) (1944 Law) continues to govern domestic arbitration proceedings.1 Enacted in January 1944, this Law is, unfortunately, very outdated and gives national courts extensive powers to interfere in arbitration proceedings.
The International Commercial Arbitration Law (Law No 101/1987)2 (ICAL) governs international arbitration proceedings and is, by contrast, much better adapted to the needs of modern arbitration. The ICAL adopted in full the 1985 version of the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), subject to being limited to arbitrations defined as "international" and "commercial" therein. The ICAL was amended on 23 February 2024 by the International Commercial Arbitration (Amending) Law (Law No 11(I)/2024)3 (the ICAL Amending Law) to align it with the amendments made by the 2006 version of the Model Law.
Cyprus is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention), which was ratified pursuant to the Law on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Ratification) Law (Law No 84/1979) (Ratification Law). Additionally, the Foreign Court Judgments (Recognition, Registration and Enforcement) Law (Law No 121(I)/2000) specifies (inter alia) the procedural steps that a party must follow to obtain the recognition and enforcement of a foreign arbitral award in Cyprus under the New York Convention, this being subject to the proviso that such an award has been issued in a country with which Cyprus has concluded a reciprocity treaty to this effect. The detailed recognition and enforcement procedure itself is now governed by section II of Part 44 of the English-influenced Civil Procedure Rules (CPR), which took effect in September 2023.
The International Commercial Arbitration Law (Law No 101/1987) (ICAL) adopted in full the 1985 version of the UNCITRAL Model Law ...[.] The ICAL was amended ... [in] 2024 by the International Commercial Arbitration (Amending) Law (Law No 11(I)/2024) ... to align it with the amendments made by the 2006 version of the Model Law.
... [T]he Foreign Court Judgments (Recognition, Registration and Enforcement) Law (Law No 121(I)/2000) specifies (inter alia) the procedural steps that a party must follow to obtain the recognition and enforcement of a foreign arbitral award in Cyprus under the New York Convention[.] ... The detailed recognition and enforcement procedure itself is now governed by ... the ... Civil Procedure Rules (CPR)[.]
The ICAL Amending Law
As stated previously, the ICAL Amending Law has aligned the ICAL with the 2006 version of the Model Law. As a result, Cyprus is also now aligned with other leading arbitration jurisdictions and is therefore well positioned to serve as an attractive seat for international commercial arbitration. A further arbitration law reform process is now under way, following recent consultation on a draft arbitration bill. This is discussed below.
(1) Extensive legal framework governing interim measures
Prior to its amendment, s 17 of the ICAL simply provided that, unless expressly prohibited in the arbitration agreement, an arbitral tribunal could order interim protective measures concerning the subject-matter of the dispute and also require the provision of security in connection with such measures.
The ICAL Amending Law has replaced the original version of s 17 of the ICAL with Part IV(A) on interim measures of protection. This contains several sections that set out conditions and procedures for applying for interim measures and also makes provision as to their enforceability, including with regard to ex parte orders, guarantees, modifications and grounds for recognition or refusal thereof by the courts of Cyprus.
More specifically, the revised s 17 of the ICAL provides that unless the parties have agreed otherwise, the tribunal may order interim protective measures before issuing a final award. Such temporary measures may (1) maintain or restore the status quo pending determination of the dispute; (2) prevent actions likely to cause harm or prejudice to the arbitral process itself; (3) preserve assets that could be used to satisfy a future award; or (4) preserve evidence relevant to the resolution of the dispute. The provisions of this section also apply in cases where the parties have agreed to appoint an emergency arbitrator to resolve an urgent dispute.
[The new] Part IV(A) [of the ICAL] ... contains several sections that set out conditions and procedures for applying for interim measures and also makes provision as to their enforceability, including with regard to ex parte orders, guarantees, modifications and grounds for recognition or refusal thereof by the courts of Cyprus.
Section 17A lays down the conditions for the issuance of interim measures. Pursuant to s 17B, unless otherwise agreed by the parties, a tribunal may issue a provisional measure without notice. Section 17C provides the specific regime for applying for provisional measures: (1) applications must be notified to the opposing party; (2) the arbitral tribunal will give an opportunity to the opposing party to present its case; and (3) the tribunal will decide upon the matter. All of these steps must be taken without delay. A provisional measure will expire 20 days after the date of issuance by the tribunal. However, the tribunal may issue a provisional measure adopting or modifying the original measure, provided that it gives notice to and an opportunity for the party against whom it is directed to present its case. Such provisional measures are binding on the parties but are not enforceable as court orders.
... [I]nterim protective measures ... may (1) maintain or restore the status quo pending determination of the dispute; (2) prevent actions likely to cause harm or prejudice to the arbitral process itself; (3) preserve assets that could be used to satisfy a future award; or (4) preserve evidence relevant to the resolution of the dispute. [They] ... also apply ... where the parties have agreed to appoint an emergency arbitrator[.]
Section 17D provides for the amendment, suspension and termination of provisional measures, while s 17E applies to the provision of security for such measures.
Section 17F provides that parties must disclose any material changes in circumstances and that a party applying for a provisional measure without notice to the other party must disclose to the arbitral tribunal all relevant facts. This duty of disclosure remains in place until the party against whom the order has been requested has had an opportunity to present its case.
Section 17H states that provisional measures by arbitral tribunals (even foreign ones) may be recognised and enforced by the courts of Cyprus, subject to the provisions of s 17I and also those of the Ratification Law. ... This additional requirement was introduced by the Cypriot legislature and does not appear in the UNCITRAL Model Law.
Section 17G applies to costs and damages.
Section 17H states that provisional measures by arbitral tribunals (even foreign ones) may be recognised and enforced by the courts of Cyprus, subject to the provisions of s 17I and also those of the Ratification Law. It is noted that this additional requirement was introduced by the Cypriot legislature and does not appear in the UNCITRAL Model Law. Interestingly, it imposes an additional obligation to comply with the New York Convention's provisions.
Section 17I provides the grounds for refusal of recognition and enforcement of a provisional measure.
Section 17J provides that the courts of Cyprus have the same powers to issue provisional measures in relation to arbitral proceedings, regardless of whether their seat is within Cyprus, as they do in judicial proceedings. The courts exercise such powers in accordance with their jurisdiction and competence, and considering the specific characteristics of the international arbitration concerned.
(2) Relaxation of conditions for the recognition and enforcement of awards
Pursuant to the ICAL Amending Law, the conditions for the recognition and enforcement of a foreign award have been significantly relaxed by comparison with those under the New York Convention.
Thus, s 35(2) as amended of the ICAL abolishes the requirement for a party seeking recognition and enforcement of an award to submit the arbitration agreement to the court. Instead, that party need only provide a duly certified original or a certified copy of the award.
The provision in relation to the translation of the award remains unchanged. If the award is not drafted in one of the official languages of Cyprus (viz, Greek or Turkish), the court may request the party seeking recognition and enforcement to produce a translation into one of the official languages. It may be noted that the working language of the courts of Cyprus is Greek.
Pursuant to the ICAL Amending Law, the conditions for the recognition and enforcement of a foreign award have been significantly relaxed by comparison with those under the New York Convention.
No guidance is provided by the ICAL as to who should produce the translation. However, art IV.2 of the New York Convention specifies that the translation must be made by an official or a sworn translator, or by a diplomatic or consular agent. This provision has, in the past, led to conflicting District Court judgments (which are persuasive but not binding on other District Court judges). See, for example, the judgment in Intersputnik International Organization of Space Communications v Alrena Investments Ltd, 4 in which the District Court of Limassol held that a translation of the award by the Press and Information Office (PIO) of the Republic of Cyprus (the only official body approved to provide certified translations at the time) did not satisfy the requirements of art IV.2 of the New York Convention as it had not been made by a sworn translator and no affidavit of translation had been submitted. The Court stated further that as the PIO was neither a diplomatic or consular agent nor an official translator, the application for recognition should dismissed.
Fortunately, the Registration and Regulation of Sworn Translator's Services Law (Law No 45(I)/2019) was enacted in 2019. This legislation makes it clear that translations in Cyprus must now be carried out by sworn translators who are listed in a public register.
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