1 Legal and judicial framework
1.1 Which legislative and regulatory provisions govern the recognition and enforcement of foreign judgments in your jurisdiction?
Cyprus does not have a formal policy on the recognition and enforcement of foreign judgments and there is no unified system for the enforcement of foreign judgments. The question of whether a foreign judgment will be recognised and enforced in Cyprus is determined solely by the criteria set out in the relevant legislation (if applicable to the judgment in question), and by the principles of common law if the judgment lies outside the ambit of the relevant legislation.
EU judgments: Foreign judgments issued by courts of EU member states are recognised and enforced as per the terms and procedures provided in the relevant applicable EU regulation (see question 1.2).
Non-EU judgments: A non-EU judgment may be enforceable under statute through the process of recognition set out in the Law Concerning Foreign Judgments (Recognition, Registration and Execution Pursuant to Treaty) of 2000 (121 (1)/2000).
UK judgments: The recognition and enforcement of judgments issued in the United Kingdom (with the exception of judgments issued as per the applicable EU regulations, while the United Kingdom remains an EU member state) are governed by the Foreign Judgments (Reciprocal Enforcement) Law, 1935, CAP 10 (and the rules made thereunder by means of an order in council under Section 3), as amended by Law 130 (1)/2000.
Common law: A foreign judgment may be enforced at common law through an action on the foreign judgment.
If the foreign judgment is capable of enforcement under statute, it cannot be enforced by a common law action on the judgment.
1.2 Which bilateral and multilateral instruments on the recognition and enforcement of foreign judgments have effect in your jurisdiction?
Recast Brussels Regulation (EU) 1215/12: The Recast Brussels Regulation sets out a speedy and simplified procedure for the enforcement of judgments obtained in the courts of one EU member state in all other member states, except Denmark, which continues to be bound by the Brussels I Regulation (44/2001). The Recast Brussels Regulation (and the Brussels I Regulation, where applicable) applies to orders of courts and tribunals (including interlocutory orders) of any nature and to commercial matters, with the exception of matters relating to revenue, customs administrative law, matrimony, wills, succession, bankruptcy, social security and arbitration.
Under the Recast Brussels Regulation, a judgment that has been issued and is enforceable in an EU member state will be enforceable in other member states without the need for a declaration of enforceability.
Under the Recast Brussels Regulation, an application can be made to the courts of the relevant member state to refuse enforcement by the party against which enforcement is sought on the following grounds:
- Enforcement would be manifestly contrary to Cypriot public policy;
- The defendant was not duly served with proceedings in time to enable it to prepare a proper defence; or
- Conflicting judgments exist in Cyprus or other member states.
The Recast Brussels Regulation came into force on 10 January 2015 and regulates the enforcement of judgments issued since that date.
Brussels I Regulation: Article 66(2) of the Recast Brussels Regulation provides that the Brussels I Regulation continues to apply to judgments issued in legal proceedings instituted to authentic instruments formally drawn up or registered, and to court settlements approved or concluded in the period between 1 March 2002 and 9 January 2015, which fall within the scope of the regulation.
Judgments are recognised and enforced in Cyprus under the Brussels I Regulation by a way of an ex parte application for recognition and enforcement filed by the judgment creditor, in order to obtain a declaration of enforceability. Once it has been duly served with the declaration of enforceability, the defendant judgment debtor may object on the following grounds:
- The original court lacked jurisdiction to hear the matter;
- Recognition and enforcement would be manifestly contrary to Cypriot public policy;
- The defendant was not served with proceedings in time to enable it to prepare a proper defence; or
- Conflicting judgments exist in Cyprus or other member states.
The European legal system applicable in Cyprus also includes the following procedures aimed at simplifying and speeding up the process and reducing the cost of recognition and enforcement. Where these procedures are used, the resulting judgments issued by courts of one member state can be enforced in other member states without any need for further recognition.
European Enforcement Order Regulation (805/2004): The European Enforcement Order Regulation has been adopted by all EU member states with the exception of Denmark and applies to judgments obtained in uncontested claims for a specific sum of money issued after 21 October 2005.
An ‘uncontested claim' is a claim where the debtor:
- has not appeared in court or has not been represented in court regarding the claim, after having initially objected to the claim in the course of the court proceedings (provided that such conduct amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the member state of origin);
- has failed to object to the claim; or
- has expressly agreed to the claim either by admission or in an authentic instrument, or by means of a court-approved settlement.
Pursuant to Article 5 of the European Enforcement Order Regulation, a judgment which, upon application, has been certified by the court of the member state of origin as a European enforcement order will automatically be recognised and enforced in other member states without the need for a declaration of enforceability and without any possibility of opposing its recognition, except in the case of conflicting judgments.
The requirements for certification of a judgment as a European enforcement order are laid down in Article 6 of the regulation.
In Vapenik v Thurner (Case C-508/12) , the Court of Justice of the European Union held that the European Enforcement Order Regulation applies only to contracts concluded between two persons who are engaged in professional or commercial activities.
EU Regulation 861/2007 – European small claims procedure: EU Regulation 861/2007(as amended by EU Regulations 936/2012 and 2015/2421) on the European small claims procedure has been adopted by all EU member states, with the exception of Denmark. It applies to judgments issued in cross-border cases on civil and commercial matters in which the claim does not exceed €5,000 and which are issued on or after 1 January 2009.
In addition to those matters to which the Recast Brussels Regulation does not apply, this regulation does not apply to maintenance obligations arising from a family, marriage or similar relationship, employment issues, violations of privacy or defamation and to tenancies of immovable property, with the exception of actions on monetary claims.
EU Regulation 1896/2006 – European order for payment procedure: EU Regulation 1896/2006 (as amended by EU Regulations 936/2012 and 2015/2421) on the European order for payment procedure has been adopted by all EU member states, with the exception of Denmark. It establishes a procedure for the collection of specific amounts due from uncontested pecuniary claims in cross-border cases on civil and commercial matters resulting from judgments issued on or after 12 December 2008.
In addition to the matters to which the Recast Brussels Regulation does not apply, this regulation does not apply to claims arising from non-contractual obligations unless:
- they have been the subject of an agreement between the parties;
- there has been an admission of debt; or
- they relate to liquidated debts arising from joint ownership of property.
Like the European small claims procedure, the European order for payment procedure provides for enforcement in other member states without the need first for certification or recognition of the judgment. Furthermore, in contrast to the European small claims procedure, the European order for payment procedure imposes no limitations on the maximum value of the judgment.
Following the amendments to the European order for payment procedure effected by Regulation 2015/2421, the court fees for such procedure must not be greater than those for proceedings where there is no preceding European order for payment.
The Hague Convention on Choice of Court Agreements 2005: The European Union has signed and ratified the Hague Convention 2005 on behalf of all EU member states (including Denmark, from 1 September 2018). The Hague Convention 2005 came into force between the European Union and Mexico on 1 October 2015 and between the European Union and Singapore on 1 October 2016. The Hague Convention 2005 has also been signed but not yet ratified by China, Montenegro, Ukraine and the United States. The Hague Convention 2005 has the status of EU law within the European Union and as EU law is directly applicable to Cyprus.
The Hague Convention 2005 applies to judgments on the merits in civil and commercial matters where there is an exclusive choice of court agreement in place (unless one party is a natural person who is acting for primarily personal, family or household purposes). Such an agreement must be in writing or another form that renders it accessible for subsequent reference.
The Hague Convention 2005 specifically excludes the following matters:
- the status and legal capacity of natural persons;
- maintenance obligations;
- family law matters;
- wills and succession;
- insolvency composition and analogous proceedings;
- the carriage of passengers and goods;
- certain maritime and shipping matters;
- competition matters;
- liability for nuclear damage;
- claims for personal injury brought by or on behalf of natural persons;
- tort or delict claims for damage to tangible property not arising from a contractual relationship;
- rights in rem and tenancies of immovable property;
- validity or nullity or dissolution of legal persons and the validity of decisions of their organs;
- validity of IP rights other than copyright or related rights;
- infringement of IP rights other than copyright and related rights, unless proceedings could also be brought for breach of contract; and
- validity of entries in public registers.
The European Union has also made a declaration under the Hague Convention 2005 that this convention will apply to insurance contracts only in the cases stated in Section 2 of the EU Declaration of 11 June 2015, which include the following:
- where the contract is a reinsurance contract;
- where the choice of court agreement is entered into after the dispute has arisen;
- where the choice of court agreement is concluded between a policy holder and an insurer which, at the time of conclusion of the insurance contract, are both domiciled or habitually resident in the same contracting state, where that agreement confers jurisdiction on the courts of that state, even if the harmful event occured abroad, provided that such an agreement is not contrary to the law of that state;
- where the choice of court agreement relates to an insurance contract which covers certain large risks, including any loss or damage arising from perils relating to the use for commercial purposes of ships, aircraft and railway rolling stock, among others; and
This reflects the special provisions in relation to insurance which are set out in Articles 15 and 16 of the Recast Brussels Regulation.
Judgments under the Hague Convention 2005 are recognised by application if they are enforceable or effective in their country of origin. The party against which recognition of the judgment is sought is not entitled to make submissions on an application for recognition of a Hague Convention 2005 judgment; and once recognised, the judgment becomes enforceable as if it were a Cypriot judgment. However, a decision to recognise a judgment can be appealed on the following grounds:
- The judgment is not effective or enforceable in its state of origin;
- The relevant choice of court agreement was null and void;
- A party lacked capacity under the relevant law to enter into the choice of court agreement;
- Proceedings were not notified to the defendant in a manner that would allow it to organise its defence (unless the defendant appeared and put its case in the original court and did not raise this);
- The proceedings were notified to the defendant in Cyprus in breach of fundamental principles of service in Cyprus;
- The judgment was obtained by procedural fraud;
- Enforcement would be manifestly incompatible with public policy in Cyprus (including if it is incompatible with basic principles of procedural fairness); or
- The judgment is incompatible either with an earlier judgment given in Cyprus between the same parties or with an earlier judgment given in another Hague Convention state between the same parties and in the same cause of action.
Foreign Judgments (Reciprocal Enforcement) Law 1935, CAP 10: The Foreign Judgments (Reciprocal Enforcement) Law 1935, CAP 10 (as amended by Law 130 (1)/2000)), and the rules made thereunder by means of an order in council under Section 3, regulate the recognition and enforcement of judgments obtained in superior courts in the United Kingdom.
The Foreign Judgments (Reciprocal Enforcement) Law is modelled on the corresponding English statute, the Foreign Judgments (Reciprocal Enforcement) Rules CAP 16 and the Maintenance Orders (Facilities for Enforcement) Law of 1921.
As a result of the amendment of the Foreign Judgments (Reciprocal Enforcement) Law as per Law 130 (I)/2000, its provisions are applicable to any judgment issued by superior courts in the United Kingdom, regardless of whether they award a monetary sum.
In the event of Brexit, if the United Kingdom does not enter into any arrangements for the recognition and enforcement of UK judgments in EU member states, the Foreign Judgments (Reciprocal Enforcement) Law will be the only statutory arrangement for the recognition and enforcement of such judgments in Cyprus.
Bilateral treaties: Cyprus is also a party to a range of bilateral treaties that provide for recognition and enforcement of judgments issued in such countries, as follows:
- the Treaty between Cyprus and the Russian Federation;
- the Treaty between Cyprus and Ukraine;
- the Treaty between Cyprus and the People's Republic of China;
- the Treaty between Cyprus and the Syrian Arabic Republic; and
- the Treaty between Cyprus and the former Socialist Republic of Yugoslavia (only Serbia and Montenegro have ratified the treaty, since the dissolution of Yugoslavia).
1.3 Which courts have jurisdiction to hear applications for the recognition and enforcement of foreign judgments?
The recognition and enforcement of EU judgments in Cyprus are regulated by the specific EU regulation applicable to the EU judgment. Enforcement is not covered by the Law Concerning Foreign Judgments and the competent court can be any court of Cyprus where the judgment debtor has or is expected to have assets.
Jurisdiction to hear applications for the recognition and enforcement of non-EU foreign judgments under statute is regulated by Law 121 (I)/2000, which provides that the competent court is the district court of the district where the respondent resides. If the respondent resides overseas or the foreign judgment was issued in proceedings in which there was no respondent, then the competent court is the court of the district where the applicant resides.
The provisions of Law 121 (I)/2000 have been interpreted by Cypriot first-instance courts in conflicting ways. Some courts have held that the Cypriot courts do not have jurisdiction to recognise and enforce foreign judgments where both the judgment creditor and the judgment debtor are foreign residents (eg, see Hepp and Taruta). By contrast, others have held that where both the judgment creditor and the judgment debtor are foreign residents, the Cypriot courts do have jurisdiction to recognise and enforce the judgment, based not on the procedure stated in Law 121 (I)/2000, but rather as per court practice established in the appellate case of Beogradska Banka (ie, by an ex parte application and the issue of a provisional conditional order of recognition) (eg, see Novokuznetsk and City Cruz 1).
2 Requirements for enforceability
2.1 What types of judgments may be recognised and enforced in your jurisdiction? Are any types of judgments specifically precluded from enforcement?
The Recast Brussels Regulation and the Brussels I Regulation provide for the enforcement of any judgment issued by a court or tribunal of a contracting state, regardless of what it is called by the original court and specifically including any decree, order, decision or writ of execution, as well as the determination of costs or expenses by an officer of the court. The regulations specifically exclude orders issued in the course of arbitration, but extend to the determination of costs or expenses by an officer of the court and to non-money judgments and interim orders, including injunctions.
The Foreign Judgments (Reciprocal Enforcement) Law covers judgments or orders issued by a UK superior court in civil proceedings or criminal proceedings for a sum of money in respect of compensation or damages to an injured party, as long as that sum is not a tax, fine or penalty, as well as for any other remedy (ie, declaratory) not awarding a monetary sum (see Law 130(1)/2000). The judgment must also finally and conclusively determine the rights and liabilities of the parties in the state in which it was issued (although a pending appeal is no bar to enforcement if there is no stay restraining enforcement of the lower court decision in place), or require the judgment debtor to make an interim payment to the judgment creditor.
The Hague Convention 2005 applies to decisions on the merits, but does not apply to interim measures of protection. A decision on the merits includes a determination of costs or expenses by the court, provided that it relates to a decision on the merits that can be recognised or enforced under that convention. The Hague Convention 2005 also applies to judicial settlements, provided that they have been concluded by or approved by a court specified in an exclusive jurisdiction agreement and are enforceable in the same manner as a judgment in their state of origin.
The bilateral treaties regulating the enforcement of non-EU foreign judgments in Cyprus provide for the enforcement of monetary judgments issued in the context of civil or criminal proceedings which do not involve tax or a similar charge, or a fine or penalty, as well as of declaratory judgments.
At common law, any judgment must be for a definite sum, meaning that the damages or costs awarded must have been assessed and quantified or must be ascertainable by a simple arithmetical process. The judgment must be final and conclusive between the parties, although it may be subject to appeal. The result is that judgments for payment into court, injunctive relief or interim awards that might yet be rescinded or varied by the court will not be enforceable at common law.
2.2 Must a foreign judgment be final and binding before it can be enforced?
The foreign judgment must be final and conclusive before it can be recognised and enforced in Cyprus, and must be capable of execution in the original foreign court.
2.3 Is a foreign judgment enforceable if it is subject to appeal in the foreign jurisdiction?
A foreign judgment will be deemed to be final and conclusive even if an appeal is pending against it or it is subject to such an appeal in the foreign court, provided that the foreign judgment is capable of execution under the law of the country where the foreign judgment was issued.
2.4 What is the limitation period for making an application for recognition and enforcement?
The Recast Brussels Regulation and the Brussels I Regulation do not provide for limitation periods. Judgments must generally still be enforceable in the state in which they were issued in order to be enforced in EU member states, including Cyprus (eg, see Article 6(1)(a) of the European Enforcement Order Regulation). There is authority from the Court of Justice of the European Union in Apostolides v Orams (2009) to the effect that enforceability of a judgment in the member state of origin constitutes a precondition for its enforcement in another member state.
The Law Concerning Foreign Judgments provides that an application should be made to recognise the judgment debt within six years of the UK judgment or, where the UK judgment is subject to appeal, from the date of the last judgment in the foreign proceedings.
The time limitation provided in the Cypriot Limitation Law for filing an application for recognition and enforcement of a foreign judgment is 15 years from the date on which the foreign judgment becomes final and conclusive.
3 Recognition and enforcement process
3.1 Is recognition of a foreign judgment a separate process from enforcement and does it have separate legal effects?
Recognition is the process of giving the same status and effect to a foreign judgment in the country where enforcement is sought as in the state where the judgment was issued.
Under Cypriot law, enforcement of a foreign judgment means that the court permits the execution of a foreign judgment by all modes of execution as a Cypriot court judgment.
It is precondition that a foreign judgment be recognised in Cyprus in order to be enforceable as a Cypriot court judgment.
Only where the foreign judgment is for declaratory relief, or where the defence of res judicata is raised (ie, to prevent the parties from relitigating the same dispute), shall recognition alone be requested and not enforcement.
Under the Brussels I Regulation and the Hague Convention 2005, and under the Law Concerning Foreign Judgments, judgments must be recognised in Cyprus before they are enforceable. This process provides the defendant with an opportunity to oppose or appeal recognition on certain limited grounds (see question 4). However, once a judgment has been recognised – a process which differs from jurisdiction to jurisdiction, depending on the applicable enforcement regime – it will be enforced in the same way as a judgment obtained in Cyprus through the common law route.
The European small claims and European order of payment procedures, and the Recast Brussels Regulation, do not require recognition prior to enforcement (as mentioned above), thus removing the separation between recognition and enforcement in those contexts. However, there are limited grounds under which an appeal can be brought against recognition and enforcement of a judgment under the Recast Brussels Regulation. In the first instance, such an appeal is brought as an interim application to the court in which enforcement has been sought (see question 4).
Law 121 (I)/2000, which regulates the recognition and enforcement of non-EU foreign judgments under statute, provides that a judgment creditor is entitled to apply for both recognition and enforcement of a foreign judgment or for recognition only.
3.2 What is the formal process for recognition and enforcement?
Recast Brussels Regulation: Under the Recast Brussels Regulation, no special procedure is required for recognition and enforcement and there is no need for a declaration of enforceability. Since no declaration of enforceability is required, when enforcing a judgment under the Recast Brussels Regulation, a creditor can go straight to the registrar of any Cyprus district court to deposit and register an EU judgment; upon recognition, the judgment can be enforced as a Cypriot court judgment.
Brussels I Regulation: Under the Brussels I Regulation, in order to enforce a judgment, the following are required:
- an apostille-certified true copy of the judgment, which satisfies the conditions to establish authenticity;
- a standard form certificate issued by the court which granted the judgment; and
- certified Greek translations of the judgment and the above certificate.
The procedure commences with the filing of an ex parte application for recognition and enforcement, supported by an affidavit attaching the above documents in the required form. If the relevant judgment was issued in default, the applicant must also present a certifying document establishing that the party in default was duly served with enough time to prepare a defence.
Once the above evidence is presented to the court, the presiding judge has no discretion but to make the order sought.
As soon as the order is issued, it will be served on the respondent, together with a true copy of the application for recognition and enforcement with supporting affidavits and other necessary documents. The defendant has the right to challenge the declaration of enforceability within the timeframe specified in the court order permitting enforcement.
Enforcement under statute of non-European judgments: Recognition and enforcement under statute of non-European judgments are regulated by Law 121 (I)/2000, which provides for the filing of an application by summons, supported by the necessary documentation, including:
- an affidavit attaching an apostille-certified true copy of the foreign judgment;
- a certified Greek translation of the foreign judgment; and
- expert legal advice under the law of the country of issue confirming that the foreign judgment is final and enforceable in the country where the foreign judgment was issued.
Enforcement at common law: A foreign judgment which cannot be recognised and enforced under statute can be recognised and enforced at common law through an action based on the foreign judgment, which must comply with the following requirements:
- The judgment must be for a definite sum; therefore, only monetary judgments can be enforced. Moreover, the Cypriot courts will not enforce foreign revenue, penal or other public laws, whether directly or through recognition of a foreign judgment;
- The judgment must be final and conclusive, which means that it must be final and unalterable by the court that issued it. Even if an appeal is pending, the judgment may still be considered final and conclusive, unless the appeal has the effect of staying the judgment; and
- The judgment against the defendant must have been issued by a court of competent jurisdiction. This means that the foreign court must have had jurisdiction under Cypriot conflict of law rules to deliver the final and conclusive judgment in respect of which recognition and enforcement are sought. Submission to the jurisdiction of the foreign court by the defendant will usually arise:
- by virtue of a prior agreement to that effect;
- by participation in the foreign proceedings; or
- through presence in the jurisdiction at the time of the proceedings.
3.3 What documents are required in support of an application for recognition and enforcement?
Concerning the recognition and enforcement of EU judgments in Cyprus, the applicant must present the documents required under the relevant applicable EU regulation (see question 2).
Regarding the recognition and enforcement of non-EU foreign judgments under statute, the applicant/judgment creditor shall present to the court:
- an apostille-certified true copy of the foreign judgment;
- a certified true translation of the foreign judgment in Greek; and
- expert legal advice under the law of the country of issue confirming that the foreign judgment is final and conclusive and can be executed and enforced in the country where the foreign judgment was issued.
3.4 What fees are payable for recognition and enforcement?
The applicant for recognition and enforcement of a foreign judgment under statute shall pay standard court fees of:
- €53 for the application;
- €15 for the affidavit; and
- €1 for each exhibit.
For enforcement of a foreign judgment at common law, the court fees will depend on the sum awarded under the foreign judgment or the value of the subject matter of the foreign judgment. These figures are assessed as per the table of fees set out in the Cypriot Civil Procedure Rules. For example, for an amount of €2 million or higher, the court fees are about €1,000.
3.5 Is the applicant required to provide security for costs?
Foreign applicants for recognition and enforcement of foreign judgments are obliged to deposit security for costs if they are not residents of:
- EU member states; or
- countries with which Cyprus has concluded a bilateral treaty for the provision of mutual assistance in civil and criminal matters which excludes the provision of security for costs for their residents.
3.6 How long does it usually take to obtain a declaration of enforceability?
For EU judgments covered under the Brussels I Regulation, a declaration of enforceability is obtained ex parte within approximately three to 10 days of the date of filing of the application for recognition and enforcement.
For EU judgments covered by the Recast Brussels Regulation, the European Enforcement Order Regulation and the European Order of Payment Regulation, there is no need to obtain a declaration of enforceability.
For the recognition and enforcement under statute of non-European judgments, the timeframe for obtaining a declaration of enforceability may range from approximately eight to 12 months from the date of filing.
For the enforcement of foreign judgments at common law, the timeframe for adjudication may range from approximately two to three years from the date of filing.
3.7 Can the applicant seek injunctive relief while the process is ongoing?
In the context of proceedings for recognition, registration and enforcement of foreign judgments, either under statute or at common law, the judgment creditor may apply for the following interim relief:
- freezing orders, blocking assets held by the judgment debtor;
- Chabra injunctions, blocking assets beneficially owned by the judgment debtor, but held in the name of third parties;
- discovery or Norwich Pharmacal orders, ordering third parties (eg, banks, service providers) to disclose information and documents in order to assist the claimant in proving and pleading its case, tracing assets, identifying other wrongdoers and so on;
- gagging orders, blocking third parties (eg, banks, service providers) from alerting the defendant as to the commencement of the legal proceedings by the claimant;
- appointment of an interim receiver, to assist in the preservation of the assets blocked by an injunction; and
- appointment of a receiver by way of equitable execution, in order to assist with execution of the judgment against assets which are beneficially owned by the judgment debtor.
4.1 On what grounds can the defendant challenge recognition and enforcement of a foreign judgment?
The Cypriot courts will usually give effect to a validly obtained foreign judgment and will not enquire into errors of fact or law in the original decision. The Recast Brussels Regulation and the Brussels I Regulation expressly prohibit the substantive review of a judgment from another member state. However, a defendant may object to the recognition of a judgment – or, in the case of the Recast Brussels Regulation, appeal recognition or enforcement – on the grounds that the original court lacked jurisdiction to hear the matter (both regulations contain detailed provisions in that regard) as follows:
- Recognition and enforcement would be manifestly contrary to Cypriot public policy;
- The defendant was not served with proceedings in time to enable the preparation of a proper defence; or
- Conflicting judgments exits in Cyprus or other member states.
The courts may not refuse or revoke a declaration of enforceability on any other grounds even if, for example, the judgment has already been satisfied (see Case C-139/10, Prism Investments (Area of Freedom, Security and Justice)  ECR I-9511). There is no similar procedure for challenging European order for payment and European small claims procedure judgments, since no recognition is needed prior to enforcement, except where the judgment conflicts with an existing determination between the same parties.
The Hague Convention 2005 expressly prohibits review of the merits of any judgment and provides that the court of recognition is bound by the findings of fact of the original court (unless the judgment was given in default). The party against which enforcement is sought may not make submissions on an application for recognition of a Hague Convention 2005 judgment, but can appeal any decision to recognise on the grounds that the judgment is not enforceable in its state of origin or on a number of additional specified grounds that are similar to those set out in the European regime.
The Law Concerning Foreign Judgments directs the court to recognise judgments that fulfil its requirements, rather than granting it discretionary power, and provides for recognition to be set aside where:
- the original court lacked jurisdiction;
- the judgment was obtained by fraud;
- an appeal is pending or intended to be filed; or
- the judgment is contrary to Cypriot public policy.
In addition, the law requires that the UK judgment be enforceable in the United Kingdom in order to be recognised, and adds further grounds for challenge where the rights under the judgment are not vested in the person seeking enforcement or where a conflicting judgment exists.
At common law, recognition of the judgment debt is discretionary. The Cypriot courts will not issue a judgment in debt claims based on a judgment of a foreign court that:
- lacked jurisdiction according to relevant Cypriot conflict of laws rules;
- was obtained by fraud; or
- is contrary to public policy in Cyprus or to the requirements of natural justice.
When considering the natural or substantial justice requirement, the court will consider the principles of justice rather than the strict rules. This is not restricted to a lack of notice or denial of a proper opportunity to be heard, although mere procedural irregularity will not be sufficient to preclude recognition and enforcement.
If an appeal is pending in the courts of the jurisdiction of origin, then under the EU regulations, the Hague Convention 2005, the Law Concerning Foreign Judgments or common law, the Cypriot courts have the discretion to grant a stay pending resolution of the appeal.
For foreign judgments issued in countries outside the European Union, the defendant may raise the following defences to challenge recognition or enforcement, either under statute or at common law:
- The foreign judgment was issued by a court which did not have jurisdiction under the Cypriot rules on the conflict of laws;
- Enforcement of the foreign judgment will violate Cypriot public policy;
- The foreign judgment was not made on the merits or according to procedure;
- The foreign judgment was obtained by fraud; or
- The proceedings which led to the issue of the foreign judgment were contrary to natural justice.
Further, in the context of enforcement of non-EU foreign judgments under statute, the defendant may raise various procedural objections, such as lack of jurisdiction of the Cypriot courts under Law 121 (I)/2000, failure to present an apostille-certified true copy of the foreign judgment or an official Greek translation and so on.
Common law: At common law, recognition and enforcement of a foreign judgment can be refused in the absence of any of the following exhaustive list of principles:
- The judgment is for a definite sum, final and conclusive;
- The court which issued the judgment had jurisdiction;
- The judgment was not obtained by fraud;
- The procedural rules which apply where the judgment was obtained were followed;
- The judgment was not contrary to public policy (natural and constitutional justice);
- The judgment was not inconsistent with a Cypriot judgment on the same matter;
- The Cypriot court had jurisdiction to enforce the judgment; and
- The application to enforce the judgment was brought within the relevant limitation period.
4.2 What is the limitation period for filing a challenge?
The limitation period for filing an opposition to the application for enforcement of a foreign judgment under statute is fixed by the Cypriot court at the time of the first court hearing regarding such application. In the context of enforcement at common law, the defence may be filed within approximately one to three months of the date of receipt of the plaintiff's statement of claim.
4.3 Can the defendant seek injunctive relief to prevent enforcement while a challenge is pending?
There is no need to apply for an injunction to block the enforcement of a foreign judgment under statute or at common law, as the Cypriot courts will allow enforcement of foreign judgments after hearing any challenge raised by the defendant at an inter partes hearing.
5 Court analysis and decision
5.1 Will the court review service of process in the initial proceedings?
The Recast Brussels Regulation and the Brussels I Regulation provide that a judgment may not be recognised if the defendant was not served with the document that instituted the proceedings (or an equivalent document) in sufficient time and in such a way as to enable it to arrange its defence.
However, irregularity of service is unlikely to provide a basis for resisting recognition and enforcement if the defendant was made aware of the proceedings and failed to take steps in respect thereof when it was possible to do so.
The position under the Hague Convention 2005 is similar, except the defence on the ground of not being notified will not stand if the defendant had the opportunity to challenge service in the court of origin, but failed to do so. Service may also be challenged on the grounds that the defendant was not notified of the proceedings in the country of origin in a manner compatible with the applicable principles on the issue of notice that apply in Cyprus.
At common law, recognition and enforcement may be refused if the judgment is contrary to the principles of natural justice or public policy. Accordingly, in reliance on those grounds, a defendant can seek to resist recognition and enforcement before the Cypriot courts based on the absence of proper service or notice of the proceedings, or the lack of an opportunity to arrange for a defence to be raised.
For non-EU foreign judgments, in the context of enforcement proceedings (ie, under statute or at common law), the Cypriot courts have the power to examine the process of service of court documents on the defendant which led to the issue of the foreign judgment if the defendant has raised a defence in this regard, an objection about violation of due process or natural justice or similar.
5.2 Will the court review the jurisdiction of the foreign court in the initial proceedings?
For the enforcement of judgments under the Recast Brussels Regulation and the Brussels I Regulation, the Cypriot courts will be bound by the findings of fact made by the court of the member state which issued the judgment, to ensure the satisfaction of the general rules and specific exceptions contained in the above regulations regarding personal jurisdiction.
The Cypriot courts have the power to consider the subject-matter jurisdiction of the court of the member state which issued the European judgment when deciding on recognition and enforcement under the EU regulations.
In the context of enforcement at common law or enforcement of non-EU foreign judgments under statute, the Cypriot courts have jurisdiction to decide whether the issuing foreign court had jurisdiction (ie, personal jurisdiction or subject-matter jurisdiction).
5.3 Will the court review the foreign judgment for compliance with applicable law and public policy?
The Cypriot courts will not allow recognition and enforcement of a foreign judgment under the EU regulations, the Hague Convention 2005, the Law Concerning Foreign Judgments or any treaty, or at common law, where such foreign judgment is contrary to Cypriot public policy.
A foreign judgment is impeachable if recognition or enforcement would be contrary to Cypriot public policy. No legislative provision in Cyprus defines the concept of ‘public policy'. However, this may be defined as referring to the totality of values, perceptions and ideas on which the ethical, financial and political order which regulates Cypriot society is based (see Pilavachi & Co Ltd v International Chemical Co Ltd (1965) 1 CLR 97).
5.4 Will the court review the merits of the foreign judgment?
The Cypriot courts have the power to examine and decide on defences and challenges to foreign judgments only as stated in question 4.1.
5.5 How will the court proceed if the foreign judgment conflicts with a previous judgment in relation to the same dispute between the same parties?
If the foreign judgment conflicts with a previous judgment issued in Cyprus or in the country where the foreign judgment was issued in relation to the same dispute between the same parties, the Cypriot courts will not permit recognition and enforcement of such foreign judgment on the grounds that this would be contrary to Cypriot public policy, among other things.
5.6 Are there any other grounds on which the court may refuse to recognise and enforce the foreign judgment?
In the context of recognition and enforcement of EU judgments under the EU regulations, or of non-EU judgments under statute or at common law, the Cypriot courts have the power to refuse recognition and enforcement on the grounds of natural justice (ie, due process).
The foreign court proceedings must have conformed to the foreign procedural law and must respect the basic principles of due process as reflected in the Cypriot procedural law. One of the requirements of due process is that the foreign court proceedings have be understood by the defendant.
If the defendant is unable to understand the language used by the court, it must be informed through the translation of documents and the use of an interpreter. The due process requirement is most crucial for foreign default judgments. The Cypriot judge will always examine whether the defaulting party was duly summoned to appear. The defendant should have been aware of the claims filed against it and should have had a full opportunity to be heard and defend itself.
The enforcement of a foreign judgment may be impeached if the proceedings in which the judgment is obtained were opposed to natural justice. Thus, if the foreign court failed to adhere to the audi alteram partem rule by refusing to hear the defendant, any resulting judgment might be successfully set aside in Cyprus (see Ahapittas v Roc-Chik Ltd (1968) 1 CLR 1; Hassidoff v Sandi (1970) 1 CLR 220).
Further, in the context of enforcement of a non-European judgment under statute or at common law, the Cypriot courts can refuse to recognise and enforce the foreign judgment if it was obtained by fraud, on the part of either the court or the party seeking to enforce it.
Further, in the context of statutory enforcement of a foreign judgment issued outside the European Union, the court may refuse to recognise and enforce it on procedural grounds for failure to satisfy the requirements of Law 121 (I)/2000.
5.7 Is partial recognition and enforcement possible?
When considering recognition and enforcement, the Cypriot courts can make such orders in respect of a partial judgment only, where appropriate. Certain elements of a judgment may be contrary to principles of public policy or may otherwise be ineligible under the relevant enforcement rules (eg, they may constitute taxes or penalties, or may not be properly and definitively quantified). Where a portion of a judgment is considered unenforceable, the balance may still be recognised and enforced.
5.8 How will the court deal with cost issues (eg, interest, court costs, currency issues)?
An application for the recognition and enforcement of foreign judgments in Cyprus must include a statement of the amount claimed, typically in the currency of the foreign judgment. The application will usually indicate the interest accrued to the date of issue of the proceedings and specify the basis on which interest continues to accrue (if at all). An award of costs will generally be enforceable if quantified (and the European regulations specifically extend the definition of ‘judgment' to include this). If the proceedings for recognition and enforcement of the foreign judgment are successful, the full amount will be calculated in the local currency for the purpose of execution at the point of execution. The court fees and costs of the Cyprus enforcement proceedings may also be awarded against the defendant.
6.1 Can decisions in relation to the recognition and enforcement of foreign judgments be appealed?
Yes, they can be appealed, but the filing of an appeal does not stay execution of the foreign judgment as a Cyprus court judgment.
If the defendant wishes to suspend execution, it can apply for a stay of execution pending appeal, but the court will grant such stay of execution subject to conditions (eg, the lodging with the registrar of the court of a bank guarantee for all sums payable under the foreign judgment to secure the same until the appeal is heard).
6.2 Can the applicant seek injunctive relief while the appeal is pending?
Under Cypriot law, there is no right for an injunction pending an appeal or for obtaining a so-called Erinford injunction.
7 Enforcing the foreign judgment
7.1 Once a declaration of enforceability has been granted, how can the foreign judgment be enforced?
Once the declaration of enforceability has been granted, the foreign judgment is executed as a Cypriot court judgment by all available methods of execution, which include the following:
- writ of fieri facias;
- garnishee proceedings;
- appointment of equitable receiver to assist in the equitable execution;
- charging order;
- registration of a charge (ie, memo) over immovable property;
- order of committal;
- order of sequestration; and
- delivery of a statutory demand to the judgment debtor (if the judgment debtor is a Cypriot company) under Section 212(a) of the Companies Law CAP 113 for payment of the liquidated and undisputed sum under the foreign judgment within 21 days and, in the event of failure to comply, service of a winding up petition on the judgment debtor (ie, because it is deemed insolvent).
7.2 Can the foreign judgment be enforced against third parties?
As a general principle, enforcement under Cyprus law can be effected only against the interests and assets of the judgment debtor. However, the Cypriot courts do have jurisdiction to issue a so-called Chabra injunction to block and freeze assets that are legally held by, or registered in the name of, third parties where there is "good reason to suppose" that they are beneficially owned or substantially controlled by the judgment debtor. The Cypriot courts have the power to appoint a receiver to assist in the equitable execution of judgments over assets which are beneficially owned or substantially controlled by the judgment debtor and are legally held by a third party.
8 Trends and predictions
8.1 How would you describe the current enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
In general, the Cypriot courts are willing to assist in the enforcement of foreign judgments. The application of the relevant EU regulations on the recognition and enforcement of judgments issued by courts of EU member states has simplified the procedure of recognition and enforcement of such decisions without court intervention.
Within the next 12 months, a decision of the Cypriot Appellate Court is expected in VTB v Taruta on the issue of whether the Cypriot courts have jurisdiction under Law 121 (I)/2000 to adjudicate on the enforcement of non-European foreign judgments under statute where both the judgment creditor and the judgment debtor are foreign residents.
No legislative reforms are expected in the near future.
9 Tips and traps
9.1 What are your top tips for smooth recognition and enforcement of foreign judgments, and what potential sticking points would you highlight?
Until the Cypriot Appellate Court has issued its decision on the enforcement under statute of foreign judgments issued in non-EU countries, the best way to avoid jurisdictional risks and obstacles is to assign the claim of original creditor to a Cypriot special purpose vehicle to file a court action in order to obtain the foreign judgment in its own name as judgment creditor, thus satisfying the jurisdictional requirements set out in Law 121 (I)/2000 and the relevant case law of the Cypriot first-instance courts referred to above.
It is also important to consider the procedural requirements for the presentation of an apostille-certified true copy of the foreign judgment, together with a certified true Greek translation, in order to avoid the risk of rejection of the enforcement application on procedural grounds.
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.