1. Identifying Assets in the Jurisdiction
1.1 Options to Identify Another Party's Asset Position
As a general remark, in Cyprus, information as to the location and position of the assets of a party is not publicly available, in the sense that in the absence of a court judgment/order ordering the disclosure of relevant information, one cannot obtain information with regards to the location and position of the property assets of another party. However, a judgment creditor or a party to an action or other litigation proceeding can also obtain information against the judgment debtor or other party in relation to the latter's immovable property, from the Land Registry. If assets are held by a company registered in Cyprus, a limited amount of information with regards to the said entity may be obtained from the electronic database/registry of the Registrar of Companies that is available to the public.
The results of such search at the electronic registry of the Registrar of Companies may provide general information in relation to the identity of the company's shareholders and directors as well as the number of shares held by each one of them, as well as present and previous charges. Furthermore, each company has to file its financial statements to the Registrar of Companies, which are accessible to the public with the payment of a fee. Therefore, information can be obtained through the financial statements.
Ordered Disclosure of Information
Another option available in Cyprus for the purposes of identification or tracing of property assets is through an order of the court ordering the disclosure of information in relation to the specific assets of a party. Cypriot courts have a wide discretion to issue interim orders and injunctions, including prohibiting and mandatory injunctions ordering the respondent to act in a particular manner or perform certain activities, as well as disclosure orders for the purpose of asset tracking and execution. In examining an application for a mandatory injunction, specific conditions should be met that are set out in the legislation and the case law.
Freezing orders prohibiting the removal of assets from the jurisdiction, but also preventing the respondent from dissipating assets in general, are commonly issued by the courts where the conditions set by the case law are met. Disclosure orders may also be ordered alongside a freezing order so as to enable the monitoring and effectiveness of the freezing order. Most often the Cypriot courts will issue the following interim orders/ injunctions.
Interim attachment orders, commonly referred to as "Mareva" injunctions, are often issued by the Cypriot courts when the applicant can show that unless the freezing order is issued, there is a real risk of alienation or dissipation of assets. In recent years the jurisdiction of the Cypriot courts to issue worldwide freezing orders has also been recognised. The court will issue the requested order on the balance of convenience towards preserving a particular status quo pending the final adjudication and determination of the issues of the relevant proceedings.
Freezing orders can be granted in relation to assets, including both tangible and intangible assets, inside and outside Cyprus.
In addition to the above, Cypriot courts also asserted juris- diction in issuing orders by way of a "Chabra" injunction (TSB Private Bank International v Chabra  1 WLR 231). A Chabra injunction is essentially a freezing order directed to a party against which the claimant does not have a substantive cause of action. It is made to enforce a judgment (or an anticipated judgment) against that third party and/or freeze assets that are beneficially owned by the cause of action defendant.
Norwich Pharmacal Type Disclosure Orders
These orders are designed to force a third party to divulge the details of a wrongdoer so that the applicant/claimant can bring a named action against them. A Norwich Pharmacal order is essentially an order under which a respondent who is involved or mixed up in a wrongdoing (whether innocently or not) is required to disclose certain documents and/or information to the applicant; for example, to identify the wrongdoer or trace its assets. Typically, an application for a Norwich Pharmacal order will be made where, without the information requested, no claim can be brought against the wrongdoer or property misappropriated may not be found.
2. Domestic Judgments
2.1 Types of Domestic Judgments
Legal proceedings in a district court in Cyprus are initiated when a writ of summons or an originating summons is filed and sealed at court. The writ of summons can be generally endorsed (containing only a list of the remedies sought) or specially endorsed (containing a statement of claim providing the main factual background on which the cause of action is founded). Following service of the proceedings, the defendant has ten days to file an appearance and then a defence must be filed within 14 days.
- If the defendant fails to file an appearance within the prescribed period, the claimant can apply to the court and obtain a default judgment. However, it is possible for a defendant to file an appearance outside the prescribed time limit to block the issuing of a judgment in default.
- If the defendant files an appearance but not a defence, the claimant can file an application for issuance of judgment without a full hearing being conducted.
Additionally, where the defendant files an appearance or a defence to a specially endorsed writ of summons, the claimant can, where appropriate, apply for a summary judgment on the grounds that there is no defense to the action. Summary judgment proceedings are governed by Order 18 of the Civil Procedure Rules (CPR). Although a summary judgment does not always result in the final adjudication of a case, it is a fasttrack procedure that can be used by a claimant seeking the quick adjudication of its claim, in instances where it has good and valid reasons to believe that the defendant has no defence.
Judgment to Set aside
A defendant can apply to the court to have the claim dismissed and/or set aside and/or request to strike out part or the whole action for various reasons such as due to lack of jurisdiction of the Cypriot court to try the action, the actionable right being covered by res judicata or the proceedings being frivolous and vexatious or constituting an abuse of the court's process.
There are various types of other interim judgments/orders that can be issued by the court in the process of a litigation proceeding that are issued following the filing of a relevant application by a party, such as a judgment for the claimant to provide security for costs, judgment for amending pleadings, judgment for provision of further and better particulars on a filed pleading, and others.
Furthermore, the Cypriot courts may issue interim prohibitive, mandatory, disclosure or preservation orders within the framework of pending proceedings, as discussed in 1.1 Options to Identify Another Party's Asset Position. In addition to these orders, Cypriot courts have jurisdiction to issue Anton Piller orders (search orders enabling the claimant to enter premises and obtain information that is likely to be destroyed), Norwich Pharmacal orders (ordering disclosure of information against a wrongdoer) and gagging orders (preventing the respondents from disclosing the filing of the proceedings and/or the application to the public in general, any potential defendants and/or any other unauthorised third party). Orders for the appointment of an interim receiver or an administrator of assets can also be issued.
Such orders are deemed appropriate in cases where a prohibitive injunction is insufficient on its own. These cases are likely to arise where there is a measurable risk that a defendant/respondent will act in breach of the freezing order or otherwise seek to ensure that its assets will not be available to satisfy any judgment that may be given against it.
Other orders that can be issued are orders in support of arbitration or foreign proceedings, or orders facilitating an arbitration proceeding. Under Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast Brussels Regulation), Cypriot courts can issue an interim order at any time in aid or support of court proceedings pending before the courts of an EU member state without the need to file substantive proceedings in Cyprus. These orders are considered interim, pending the adjudication of the main proceeding, which is taking place in another jurisdiction.
A party can seek most of the remedies usually available under common law and the principles of equity. The Cypriot courts have broad powers to award a variety of remedies to a successful claimant. Most commonly, the following remedies are awarded for civil and commercial claims:
- compensatory damages (general/special damages), in relation to claims for loss suffered by the claimant, which are determined and calculated in accordance to the extent and type of loss suffered by the injured party;
- restitutionary damages in equity, to prevent unjust enrichment;
- declaratory court decisions/judgments recognising an ownership status, declaring as unlawful, void and/or without legal effect the acts and operations of a defendant;
- orders for specific performance, most commonly in relation to contract disputes;
- other type of appropriate prohibitive, mandatory or any other type of final order by which a family dispute, a dispute emanating from the commission of a tort or any other type of civil dispute is regulated in a final manner; and
- punitive or exemplary damages, to punish the behaviour of the defendant in certain circumstances.
2.2 Enforcement of Domestic Judgments
Once a party obtains a judgment in Cyprus or once a foreign judgment is recognised and registered in Cyprus (once a foreign judgment is registered, it takes the form of a domestic judgment and it is treated as such by the courts in Cyprus) then the party who has obtained a judgment may take execution measures towards the satisfaction of the judgment.
The Civil Procedure Law, Cap 6 provides that every court's judgment ordering the payment of money may be enforced through all or any of the following methods of execution and enforcement directed against the judgment debtor.
- Writ of execution for sale of movables, which entails the sale of a judgment creditor's movable property for the benefit of the judgment debtor
- Writ for sale of immovable property or charging the property through the registration of a charging order/security (commonly known as MEMO) over the property.
- Writ of sequestration of immovable property.
- Garnishee order/third-party debt order. The court may examine the judgment debtor with regards to their financial position and subsequently the court may order the judgment debtor to make payments over the debt on a monthly basis and such payments may be made directly from the judgment creditor's monthly instalments/salary.
- Every court's judgment or order for the delivery of possession of immovable property may be executed through a writ of possession, ordering the delivery of the immovable property to the judgment creditor.
- Every court's judgment or order for the delivery of possession of movable property may be executed through a writ of delivery, ordering the delivery of the movable property to the judgment creditor.
- Moreover, the court may issue injunctions and other orders encumbering the interest of the judgment debtor on shares and other stock owned by the judgment debtor according to the provisions of the Encumbering Orders Law of 1992 (Law 31(I)/1992).
- Liquidation/winding-up proceedings may be initiated against a judgment debtor but these are not enforcement methods per se in that they do not guarantee payment of the judgment debt as the liquidator will be distributing the assets of the judgment debtor company according to the priority of creditors (secured, unsecured, etc).
Regarding garnishee orders, according to this method of execution, a money judgment is enforced through the attachment of the debts due or accruing due to the judgment debtor that form part of his property available in execution (ie, garnishee order). By this method of execution, a third party who owes money to the judgment debtor is required to pay directly to the judgment creditor the debt due or accruing due from them to the judgment debtor, or as much of it as may be sufficient to satisfy the amount of the judgment.
Originally published 26 August, 2020
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.