In a recent decision of a Cyprus District Court, it has been decided that an international arbitral award, cannot be used as a basis for the filing of a winding up petition, against the respondent company, before same is recognized and registered in Cyprus pursuant to the New York Convention.
In the above case, the holder of an international arbitral award, attempted to rely on the provisions of Section 212 of the Cyprus Companies Laws CAP. 113, regulating the right of a creditor, whose claim against a Cyprus limited liability Company, is liquidated and/or undisputed, to serve a formal notice to the debtor Company, requesting it to pay its debt within 21 days, and in case of failure, to proceed with the filing of a winding up against the Company on the ground that same, is deemed insolvent.
The grounds of opposition and objections raised by the debtor Company, against the winding up petition that, an international arbitral award does not have any legal effect or enforceability in Cyprus, before same is registered and recognised as per the New York Convention, or that the monetary claim of the holder of the arbitral award – (which has not been recognized in Cyprus pursuant to the New York Convention) – was not a liquidated or an undisputed debt, within the meaning of Article 212 of the Companies Laws, were adopted by the Cyprus Court (Note: An Appeal is pending against the above decision of the First Instance Court).
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