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INTERNATIONAL MULTILATERAL CONVENTIONS

1. Is your country a contracting state to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards?

Since December 1980, Cyprus has been a contracting Party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New Year Convention”).

Since when is the Convention in force?

The New York Convention has been in force since March 29, 1981.

Were any declarations or notifications made under Articles I, X and XI of the Convention?

The only declarations or notifications made under Articles I, X and XI of the Convention, are the following:

(i) That the Republic of Cyprus will apply the Convention on the basis of reciprocity to the recognition and enforcement of awards made only in the territory of another contracting state; and

(ii) That it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under its national law.

What other multilateral conventions relating to arbitration is your country a party to?

Since 1966 Cyprus is a contracting state to the Convention on the Settlement of Investment Disputes between States and Nationals of other States (Law 64/1966).

 

 

INTERNATIONAL BILATERAL AGREEMENTS

2. Do bilateral agreements relating to arbitration exist with other countries?

Cyprus was an extensive network of Bilateral Investment Treaties (BITs) with 17 countries including Russia, India, China and Italy. A BIT is a treaty entered between two states providing for the promotion and protection of the investments of the nationals of each state in the territory of the other state.

BIT’s frequently provide a choice of dispute resolution mechanisms to an investor. Commonly the choice will include resolution by:

- the Court of the host State;
- an arbitral institution which is usually the International Centre for the Settlement of Investment Disputes (“ICSID”);
- an ad hoc arbitration which is most commonly conducted under the UNCITRAL rules;

Cyprus has BIT’s with the following countries:

                         COUNTRY NAME AND DATE OF AGREEMENT
Armenia Law 10 (VII) 1995
Belarus Law 8 (VII)/1998
China Law 8 (VII)/2002
Czech Republic Law 12 (VII)/2001
Egypt Law 20 (VII)/1998
Greece Law 9 (VII)/1992
India Law 10 (VII)/2002
Israel Law 17 (VII)/1998
Italy Law 6 (VII)/2004
Lebanon Law 9 (VII)/2001
Libya Law 12 (VII)/2004
Malta Law 16 (VII)/2002
Poland Law 14 (VII)/1992
Russia Law 6 (VII)/1997
Serbia-Montenegro Law 18 (VII)/2005
Seychelles Law 10 (VII)/1998


DOMESTIC ARBITRATION LAW

3. What are the primary domestic sources of law relating to domestic and foreign arbitral proceedings, and recognition and enforcement of awards in your jurisdiction?
 
The arbitration law in Cyprus is based on the UNCITRAL Model Law insofar as international commercial arbitrations are concerned, as defined in Article 1(3) of the Model Law. All other arbitrations are considered domestic arbitrations and are governed by the Arbitration Law CAP 4, which is similar to the English Arbitration Act 1950.

The enforcement of domestic arbitral awards is governed by the Arbitration Law CAP 4 and the Civil Procedures Rules.

The enforcement of the Foreign arbitral awards is regulated by the New York Convention and the law 120(1)/2000 which regulates the registration and enforcement of foreign judgments and foreign arbitral awards.

4. Is your domestic arbitration law based on the UNCITRAL Model Law?

In so far as international commercial arbitrations are concerned, as defined in Article 1 (3) of the Model Law, the Cyprus Arbitration Law Number 101/87 is based on the UNCITRAL Model Law. All other arbitrations are considered domestic and are governed by the Arbitration Law CAP. 4

What are the major differences between your domestic arbitration law and the UNCITRAL Model Law?

All the mandatory provisions contained in the UNCITRAL Model Law were adopted verbatim by the Law concerning the International Commercial Arbitrations of 1987 (Law 101/87) regulating only the international commercial arbitration disputes.

The Arbitration Law CAP 4 – (which regulates all other arbitrations which do not fall within the ambit of Article 1 (3) of the UNCITRAL Model Law) – secures extensive Court intervention in almost any stage of the arbitral proceedings including inter alia the jurisdiction to adjudicate on the validity of the arbitration agreement, discretionary power to stay courts proceedings in order to be referred to arbitration, the appointment of arbitrator (s) in the event of disagreement of the parties, the jurisdiction to stay the arbitral process in order a dispute, involving fraud or, allegations of dishonesty etc to be adjudicated by a Court, the removal of arbitrators for misconduct, the extensive powers to review the arbitral award in the context of an appeal or an application for registration and enforcement, on any jurisdictional issue, misconduct, on any lack of reasoning of the award, or wrong application and/or interpretation of the applicable law of the dispute, etc.


MANDATORY PROVISIONS

5. What are the mandatory domestic arbitration law provisions on procedure from which parties may not deviate?
 
All the mandatory provisions stipulated in the UNCITRAL Model Law were adopted by Law 101/87 regulating the International Commercial Arbitrations. The Arbitration Law CAP 4 which regulates all other arbitrations not falling within the ambit of the law 101/87 does not contain any mandatory provisions. The Courts under the provisions of Arbitration Law CAP 4 exercised a general supervisory jurisdiction over domestic arbitrations.

SUBSTANTIVE LAW

6. Is there any rule in your domestic arbitration law that provides the arbitral tribunal with guidance as to which substantive law to apply to the merits of the dispute?

The principle of party autonomy has long been recognised by Cyprus law with the result that an express choice of law will be respected by the Cyprus Courts even though the chosen law has no other connection with the subject matter of the contract or with the parties themselves. An express choice will be departed from, only where the choice is meaningless or offends public policy.

Article 28 of the law 101/87 regulating the international commercial arbitrations adopts verbatim Article 28 of UNCITRAL Model Law.

If the parties have not expressly chosen the law to govern their contract, the nominated seat of the arbitration is to be regarded as the best evidence of an implied choice of law.

In the absence of an express or implied choice the contract is to be governed by the law of the country with which the contract has the closest connection.

ARBITRATION INSTITUTIONS

7. What is (or are) the most prominent arbitration institution(s) in your country?

Unfortunately, in Cyprus there is no arbitration institution and most of the arbitrations are usually conducted either as an ad hoc arbitration or under the auspices of inter alia the London Court of International Arbitration, the Arbitration Court of International Chamber of Commerce, the Austrian Arbitration Centre in Vienna etc.

ARBITRABILITY

8.  Are there any types of disputes which are not arbitrable?

In general any dispute or claim concerning legal rights which can be subject of an enforceable award is capable of being settled by arbitration. However the following types of disputes are not arbitrable:

(i) The statutory right of a shareholder of a limited liability company to petition the winding up of the Company.
(ii) Matrimonial disputes.
(iii) Disputes involving illegality and fraud (this covers only domestic arbitrations).
(iv) Disputes falling within the ambit of Articles 85 and 86 of the Treaty of Rome.
(v) Disputes which will affect the public at large such as a judgment in rem against a ship, etc.
(vi) Criminal law matters.


REQUIREMENTS

9. What formal and other requirements exist for an arbitration agreement?

In domestic arbitrations the Arbitration Law CAP 4 defines “arbitration agreement” as meaning a written agreement to refer present and future differences to arbitration, whether an arbitrator is named therein or not.
 
In International arbitration, Article 7 of the UNCITRAL Model Law is adopted.

ENFORCEABILITY

10.  Under what circumstances is an arbitration agreement no longer enforceable?

The arbitration agreements which do not fall within the ambit of Article 1 (3) of UNCITRAL Model Law can be declared unenforceable by the Court on the ground of illegality, avoidance, rescission, termination, ambiguity, non-operative, termination for breach of the arbitration agreement, frustration, waiver by the party which relies on the arbitration agreement, public policy etc.

Furthermore the Court has discretionary power to refuse a stay of Court proceedings in order the dispute to be referred to arbitration, or when allegations of fraud or dishonesty are made against the Plaintiff, or when any questions of law raised are too complex to be resolved by arbitrators, or when there is a multiplicity of proceedings between the same parties only some of which are subject to arbitration, or when the arbitrator is not empowered to give appropriate relief to the Plaintiff, or when there is no dispute between the litigants to be referred to arbitration (i.e. the Defendant acknowledged his liability).
 
The arbitration agreements which are covered by the definition of Article 1 (3) of UNCITRAL Model Law can be declared unenforceable on the limited grounds expressly stated in Article 8 of the Model Law.

DEATH

The death of a party to an arbitration agreement does not discharge the arbitration agreement and also the cause of action to which the agreement relates.
LEGAL INCAPACITY

A company is bound by an arbitration agreement entered into on its behalf even though it relates to a contract outside the capacity of the company.  Where the contract is within the capacity of the company, but beyond the powers of its board of directors, the arbitration agreements will be enforceable by any person dealing with the Company in good faith.

The enforceability of an arbitration clause contained in a contract with an infant depends upon the validity of the contract itself. When the contract is for necessaries or is a beneficial contract of service, it is binding upon the infant, at common law and the arbitration clause thus itself binding.
 
BANKRUPTCY

The bankruptcy of a person who had earlier entered into an arbitration agreement does not have an automatic discharging effect upon the contract to which the arbitration agreement relates or upon the arbitration agreement itself. However, a trustee in bankruptcy has a general power to disclaim unprofitable contracts and his decision to affirm or to disclaim a contract to which an arbitration clause relates will generally determine the fate of that clause.
 
LIQUIDATION

The liquidation of a company has consequences for arbitration similar but not identical to those flowing from the bankruptcy of an individual. The liquidator of a company in liquidation may disclaim unprofitable contracts including arbitration provisions although an interested party may apply to the Court for an adjustment.

After the presentation of a winding up petition and before a winding up order has been made, the Court may on application of the company or a creditor or a shareholder, make an order staying proceedings against the company. Once a winding up order has been made any proceedings to which the company is a party are suspended, until the Court orders otherwise and no new proceedings may be commenced, except with the leave of the Court.

REMOVAL OF A COMPANY FROM THE REGISTER

Once a company is removed from the register, it is treated as dissolved and no longer has a legal existence. However, if it is restored to the register the restoration takes effect retroactively, with the result that the dissolution is treated as never having occurred. It follows that legal or arbitral proceedings brought against the company which is subsequently dissolved are revived along with the restoration of the company to the register.

The fact that the company has been removed from the register may of itself amount to a repudiation of the reference to arbitration by the company so that the other party will normally have the right, either to continue to participate in the arbitration or to treat the reference to arbitration as repudiated, in which case, fresh arbitration proceedings may be necessary.


THIRD PARTIES

11. In which instances can third parties or non-signatories be bound by an arbitration agreement?

Third parties or non-signatories can be bound by an arbitration agreement in the following instances:

(i) By an assignment of a contract containing an arbitration clause provided that the said contract is by its nature assignable.

(ii) The administrator of the Estate of a deceased person who was a contracting party to an arbitration agreement.

(iii) The Trustee of the bankruptcy of a person who was a contracting party to an arbitration agreement before his bankruptcy provided that the said trustee affirms the contract.

(iv) The liquidator of a company under liquidation provided he affirms the contract containing the arbitration clause or an arbitration agreement executed before the liquidation of the Company.

(v) The disclosed or undisclosed principal, when the contract containing the arbitration clause or the arbitration agreement is executed by his duly authorised agent. In the case of the undisclosed principlal the agent is also personally bound by the arbitration agreement.

GROUP OF COMPANIES

12. Do courts and arbitral tribunals in your jurisdiction extend an arbitration agreement to non-signatory parent or subsidiary companies of a signatory company, provided that the non-signatory was somehow involved in the conclusion, performance or termination of the contract in dispute, under the so-called “group of companies” doctrine?

There is no Cypriot Court precedent on the issue but the Cyprus Courts or arbitral tribunals might follow – (as usually do) – English precedent or precedent from other common law jurisdictions.

MULTIPARTY ARBITRATION AGREEMENTS

 13. What are the requirements for a valid multiparty arbitration agreement?

If is a domestic arbitration, the same requirements laid down by Arbitration law CAP 4.

If is an international arbitration falling within the ambit of Article 1 (3) of UNCITRAL Model Law, the requirements laid down in the Model Law.


CONSTITUTION OF ARBITRAL TRIBUNAL

APPOINTMENT OF ARBITRATORS

14. Are there any restrictions as to who may act as an arbitrator?

According to Cyprus Arbitration Law, there is no restriction as to who may act as arbitrator. Depending on the nature of the dispute referred for arbitration the parties can appoint a retired judge, a lawyer, an accountant, a civil Engineer, trader, businessman, or any other professional they deem fit for the purpose.

15. Failing prior agreement of the parties, what is the default mechanism for the appointment of arbitrators?

Concerning international commercial arbitrations falling within the definition stated in Article 1 (3) of UNCITRAL Model Law, the mechanisms stated in the Model Law are adopted verbatim. Concerning the domestic arbitrations regulated by the Arbitration Law CAP 4 the Court is involved in the appointment of an arbitrator in the following instances:

(i) If there is no agreement between the parties to an arbitration agreement which provides for the appointment of a single arbitrator.

(ii) If the single arbitrator appointed by the parties died or he refuses to act as an arbitrator, or he is incapable of acting as an arbitrator.

(iii) If there is no agreement between the parties or their two arbitrators, to appoint the umpire, or if the umpire died, or he refuses to act or he is incapable of acting as an umpire and the parties or their arbitrators disagree on the new appointment.

CHALLENGE AND REPLACEMENT OF ARBITRATORS

16. On what grounds and how can an arbitrator be challenged and replaced?

Grounds for removal of an arbitrator

Under the Arbitration Law CAP 4 which regulates the domestic arbitrations, an arbitrator can be removed by the Court on application by any party to the arbitration on the following grounds:
 
(i) Failure to conduct the proceedings with reasonable dispatch.
(ii) Misconduct of the arbitrator or of the proceedings.
(iii) Failure to be impartial or to act impartially.
(iv) He is physically or mentally incapable of conducting the proceedings or there are justifiable doubts as to his capacity to do so.

In the international arbitrations Articles 12, 13, 14 and 15 of the UNCITRAL Model Law are adopted.

If there is some contractual mechanism, whereby the arbitrator in question can be removed, the agreed procedure must first be exchausted before the Court can be requested to intervene.

Impartiality

There is sufficient ground to intervene for potential lack of impartiality in the following situations:

(a) The arbitrator has some connection with one or other of the parties to the arbitration proceedings.

(b) The arbitrator has some interest in the outcome of the proceedings.

(c) The arbitrator’s conduct prior to or during the proceedings demonstrates that his mind is made up.

Impartiality: Legal Standard

The legal standard for impartiality of persons with judicial or quasi-judicial functions which has been adopted by the Courts in relation to judges is fully adopted also for arbitrators.

Immunity

When an arbitrator acts in the course of an arbitration hearing, he is acting judicially. Arbitrators are not liable to the parties for failing to act with reasonable care and skill in conducting the arbitration. The only appropriate remedy is either an application to remove the arbitrator or to have the award set aside for serious irregularity.

RELATIONSHIP BETWEEN PARTIES AND ARBITRATORS

17. What is the relationship between parties and arbitrators?

The arbitrators’ duties flow from the conjunction of contract and status. An arbitration agreement is a bilateral contract which becomes trilateral on the appointment of the arbitrator. Under the trilateral contract, the arbitrator assumes the status of a quasi-judicial adjudicator with the duties, disabilities and immunity inherent in that status.

Any party appointed arbitrator shall be impartial and neutral and he shall conduct the arbitral proceedings with fairness and impartiality.

An arbitrator is liable for anything done or omitted in the discharge of his duties as arbitrator unless the act or omission is proved to have been in bad faith.

An arbitrator, who was removed by the Court, would not be entitled to receive any remuneration in respect of his services.

In most cases the amount to be paid to the arbitrators or at least the machinery for establishing this amount, will be agreed in advance between the parties and the arbitrators (fixed fee, fee based on hourly or daily rate, fee based on a proportion of the amount of the award, etc.).


JURISDICTION

COURT PROCEEDINGS DESPITE AGREEMENT

18. What is the procedure for disputes over jurisdiction if court proceedings are initiated despite an existing arbitration agreement, and what time limits exist for jurisdictional objections?

Under Arbitration Law CAP 4 which regulates domestic arbitrations if court proceedings are initiated despite an existing arbitration agreement, the Defendant as soon as he files an appearance and before he takes any fresh step in the legal proceedings, he is entitled to apply to stay the proceedings in order the dispute to be referred to arbitration. The Court has discretionary powers whether to stay or not the legal proceedings. In the international arbitrations Article 8 of the UNCITRAL Model Law is adopted.

JURISDICTION OF ARBITRAL TRIBUNAL

19. What is the procedure for disputes over jurisdiction of the arbitral tribunal once arbitral proceedings have been initiated and what time limits exist for jurisdictional objections?

In the domestic arbitrations all jurisdictional issues are within the competence of the Courts which exercise an extensive supervision over such arbitrations.

Despite the fact that the arbitrators are competent to decide on their own jurisdiction, they rarely do so and the jurisdiction issues are resolved by the Courts.

Any party to arbitration proceedings can waive expressly or impliedly any lack of jurisdiction of an arbitrator or an arbitral tribunal.

In the International arbitrations Article 16 of UNICTRAL Model Law is adopted.

ARBITRAL PROCEEDINGS

20. Falling prior agreement of the parties, what is the default mechanism for the place of arbitration and the language of the arbitral proceedings?

In the domestic arbitrators the issues will be decided by the Court if the parties disagree.

In the international arbitrations Articles 20 and 22 of UNCITRAL Model Law are adopted.

COMMENCEMENT OF ARBITRATION

21. How are arbitral proceedings initiated?

In the domestic arbitrations the arbitration proceedings commence as soon as the arbitral tribunal is constituted and invites the claimant to present his statement of claim and documentary evidence.

In the international arbitrations Article 21 of the UNCITRAL Model Law is adopted verbatim.

HEARING

22. Is a hearing required and what rules apply?

In the domestic arbitrations the Parties can agree either to have the resolution of their dispute on the basis of documentary evidence or on the basis of oral and documentary evidence.

In the International arbitrations Article 24 of UNCITRAL Model Law is adopted.

EVIDENCE

23. By what rules is the arbitral tribunal bound in establishing the facts of the case? What types of evidence are admitted and how is the taking of evidence conducted?

The parties may agree expressly or impliedly that the normal rules of evidence that apply in court shall not apply to arbitration or for the purposes of the arbitration proceedings. However, this does not in any way negate the arbitrator’s function of acting in a strictly judicial manner as between the Parties and giving them a fair chance to adduce evidence accordingly.

The parties can adduce oral or documentary evidence. The arbitrator must hear all the evidence that is relevant to the issues in question which the parties decided to put before him. On certain occasions he must be asked to give a ruling as to the admissibility of evidence or relevance and he will usually be asked to give a direction with the admission of expert evidence and the number of expert witnesses.

Arbitrators must be careful in admitting evidence because wrongful admission may lead to an allegation that the arbitrator has misconducted himself.

As a general rule the arbitrator must not make use of knowledge acquired in a different capacity. Where, however, the parties employ an arbitrator who has expert knowledge and authorised him to make use of that knowledge it is proper for him to do so.

An Arbitrator cannot give evidence himself. He cannot act on a private opinion without disclosing it to the parties if the opinion is contrary to the view given in evidence.

The parties can present their own experts witnesses,  but they have also the right to request jointly the appointment of an expert by the arbitrator.

 In domestic arbitrations the Arbitrator has powers:

(i) To require evidence and documents from the parties.
(ii) To examine witnesses on oath or affirmation.
(iii) To administer oaths or take affirmations from witnesses.

Due to the restricted scope of the above powers, the parties to arbitration proceedings shall seek the assistance of the Court in order to ensure that evidence is given or preserved and made available for inspection.

In international arbitrations Articles 19, 24, 25, 26 and 27 of UNCITRAL Model Law are adopted.

COURT INVOLVEMENT

24. In what instances can the arbitral tribunal request assistance from a court and in what cases may courts intervene?

In domestic arbitrations the Court upon the application of any party to an arbitration proceedings has jurisdiction to issue:

(i) An order for discovery of documents.
(ii) An order for giving evidence by affidavit.
(iii) An order for the examination on oath of any witness and the issue of commission or request for the examination of a witness outside the jurisdiction.
(iv) An order for the inspection of any property which was the subject of the reference to arbitration.
(v) A Subpoena ordering a person to appear before the arbitrators and to give evidence or produce documents.

CONFIDENTIALITY

25. Is confidentiality ensured?

In the absence of any contrary agreement of the parties in domestic arbitrations, there is no obligation for ensuring confidentiality of any aspect of the arbitration proceedings.

As arbitrations are private proceedings members of the public may be excluded by the arbitrators. It is uncertain whether the arbitrators have any right to exclude any person whom either party wishes to present if that person is not a representative. Such exclusion might be held to amount to misconduct if there is no good reason for the exclusion.
 
INTERIM MEASURES

INTERIM MEASURES BY THE COURTS

26. What interim measures may be ordered by courts before and after arbitration proceedings have been initiated?

For domestic arbitrations the power to issue interim measures is vested with the Court.

Upon the application of any party to the arbitral proceedings the Court can issue:

(i) Orders for the preservation, detention or sale of property forming the subject matter of the dispute;
(ii) Orders for appointment of receivers;
(iii) Orders for interim relief like a mareva injunction but also injunctions against breaches of an underlying contract pending the outcome of the arbitration proceedings;
(iv) Orders for security for costs;
(v) Orders securing the sum in dispute;
(vi) An order for the arrest of a vessel.

In international arbitrations Articles 9 and 17 of UNCITRAL Model Law are adopted. Interim measures can be issued by Cyprus Courts  pursuant to Article 9 of the UNCITRAL MODEL LAW (Law 101/87) in support of an international commercial arbitration conducted in Cyprus or abroad.

In addition, Cyprus courts have the power to issue interim measures of protection in aid and/or in support of arbitral proceedings pending in any Member State of European community – (except Denmark) – pursuant to Article 31 of the EU Regulation 44/2001 (see decision of European Court of Justice in VAN UDEN –V- DECO LINE).

INTERIM MEASURES BY THE ARBITRAL TRIBUNAL

27. What interim measures may the arbitral tribunal order after it is constituted?

In domestic arbitrations, the arbitrator does not have any jurisdiction to issue any interim measures.

In international arbitrations a party may apply to the court for interim relief and there is no priority rules between the powers of the arbitrators (Article 17) and the right to apply to the Court (Article 9).
 
The arbitrators have jurisdiction pursuant to Article 17 of UNCITRAL Model Law to issue all the types of interim measures which the Courts can issue including freezing injunctions, appointment of receiver, order securing the amount of the dispute, order for protection of the subject matter of the dispute, security for costs etc.

Any interim measure issued by an arbitration tribunal can be enforced through court procedure.

In practice, in the majority of all international arbitrations conducted in Cyprus the parties apply to the Courts to obtain the necessary interim measures of protection.

 In which instances can security for costs be ordered by an arbitral tribunal?

In domestic arbitrations, unless there is a contrary agreement of the parties, the arbitrator does not have any power to order security for costs. The jurisdiction for issuing such order is vested with the Court.

Provided that the parties expressly conferred such a power to the arbitrators, security for costs can be order on the following instances:

(i) A claimant or counterclaimant who resides ordinarily outside the countries which are Member States of EU does not have any immovable property within the jurisdiction of Cyprus registered on his/her or its name.
(ii) The claimant or counterclaimant is unlikely to be able to meet any order for costs against it.
(iii) The claimant’s or counterclaimant’s assets are located in a country which is not a party to the New York Convention, so that in the event that an award of costs is made against it, the respondent might no easily be able to enforce that award.

AWARDS

DECISIONS BY THE ARBITRAL TRIBUNAL

28. Failing Party agreement, is it sufficient if decisions by the arbitral tribunal are made by a majority of all its members or is a unanimous vote required?

The entire arbitral tribunal must have the opportunity to participate in the making of the award. The arbitrators can not delegate decision making functions to any one of their members. Any award which is made without the involvement of any one of the arbitrators is liable to be set aside even if the missing arbitrator could not have affected the outcome due to a majority being achieved by the participating arbitrators.

In domestic arbitrations unless the parties have not agreed otherwise, the arbitrators must act unanimously before the award could be binding on the parties.

 


In international arbitrations Article 29 of UNCITRAL Model Law is adopted.

An arbitrator who disagrees with the majority will normally refuse to sign the award and his failure to do so will not affect the validity of the award.

Where the arbitrators disagree on the award, the dissenting arbitrator must be given full opportunity to persuade the others of his point of view. If this opportunity is not offered to him, the majority award is liable to be set aside for serious irregularity.

What if an arbitrator refuses to take part in a vote or sign the award?

Where the arbitrator refuses to take part in a vote or sign the award, he becomes an arbitrator who has refused to act and is consequently subject to removal under the terms of the agreement of the parties or under Arbitration law.


FORM AND CONTENT REQUIREMENTS

29. What form and content requirements exist for an award?

In domestic arbitrations, Arbitration Law CAP 4 does not impose any requirements for the form and content of an award.

However, in practice, the arbitrators shall follow the common law principles in drafting their arbitral awards (written or oral awards, no obligation to sign the award, no obligation to include a date of the award etc).

 In International arbitrations Article 31 of UNCITRAL Model Law is adopted.

DATE OF AWARD

30. For what time limits is the date of the award decisive and for what time limits is the date of delivery of the award decisive?

 Exactly when an award is made is very important for a number of reasons:

(i) There may be contractual time limits within which an award is to be made;
(ii) An award becomes final and binding once it has been made;
(iii) Once an award is made the arbitrators become functus, officio in relation to the matters of the award;
(iv) The award can be notified to the parties immediately after its preparation.

The date of the delivery of the award of the parties is decisive on the following instances:

(i) An award may be corrected by the arbitrators as regards clerical errors and ambiguities within 30 days from the date of the delivery of the award.
(ii) Any application to set aside the award is to be made within 90 days from the date of the delivery of the award.
 
TYPES OF AWARDS

31. What types of awards are possible and what types of relief may the arbitral tribunal grant?

 The possible types of award are the following:

(i) A final award, disposing of all outstanding issues between the parties.
(ii) A partial award disposing a particular issue arising between the parties.
(iii) A provisional or interim award whereby the arbitrators award relief pending the making of the final award.
(iv) An agreed award or award by consent embodying any settlement reached by the parties.

An arbitration tribunal has power to grant the following types of relief:

(i) The payment of a sum of money – (including payments in  foreign currency) – plus interest;
(ii) Declaranatory relief;
(iii) Injunctive relief;
(iv) Specific performance of a contract other than a contract for the sale of land;
(v) Rectification, set aside or cancellation of a contract;
(vi) An award may give directions as to the future use of a property;
(vii) An award of costs (e.g. arbitration costs, legal costs and any other costs incidental to the arbitration);

TERMINATION OF PROCEEDINGS

32. By what other means than an award can proceedings be terminated?

The domestic arbitral proceedings can be terminated by an order of the arbitral tribunal in the following circumstances:
 
(i) When the claimant withdraws his claim unless the respondent objects thereto and the arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the dispute;
(ii) When the parties agree on the termination of the proceedings.
(iii) When the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

In the international arbitral proceedings, Article 32 of UNCITRAL Model Law is adopted.
COST ALLOCATION AND RECOVERY

33. How are the costs of the arbitral proceedings allocated in awards?

 The costs of arbitral proceedings prima facie follows the event.
The arbitrators have a complete discretion in directing by whom the costs of arbitration shall be paid, but the said discretion shall be exercised not in an arbitrary fashion but judicially.

The parties to an arbitral proceeding can agree how the costs of arbitration can be allocated. In the absence of such an agreement, the allocation is within the jurisdiction of the arbitrators.

 Exceptions to the general rule
 
 In the following instances the costs do not follow the event:
 
(i) Where the claim is for all purposes withdrawn by the claimant leaving only minor issues to be resolved, the respondent is entitled to be treated as the winning party.
(ii) Where the claim is deliberately exaggerated, costs may be awarded to the respondent.
(iii) When the claimant has been obstructive in his conduct of the arbitration, then costs may likewise awarded to the respondent.
(iv) Where the successful party has wasted costs by for example calling unnecessary witnesses, using unnecessary procedures etc.
(v) Where there has been an offer made during the course of the arbitration and the offer is greater than the sum awarded, then the claimant is not entitled to costs.
 
 What costs are recoverable?

Depending on the existence of any agreement of the parties to the contrary, the following costs are recoverable:
 
(i) The arbitrator’s own fees and expenses.
(ii) The fees and expenses of any arbitral institution involved in the arbitration proceedings.
(iii) The parties own costs including legal costs and costs incurred in negotiating the reference to the arbitrators.
(iv) Any costs incidental to the arbitration which include the fees of experts, the hiring of premises for the holding of the arbitration etc.

INTEREST

34. May interest be awarded for principal claims and for costs and at what rate?

Subject to the contrary agreement of the parties, the arbitrators have power to award simple or compound interest from such dates and such rates as they consider meet justice of the case, on the whole or part of any amount claimed including costs in the arbitration proceedings, in respect of any period up to the date of payment.

In domestic arbitrations, the arbitrator has power to award the same interest as awarded by the courts which is now fixed at the rate of 8% per annum.


PROCEEDINGS SUBSEQUENT TO ISSUANCE OF AWARD

INTERPRETATION AND CORRECTION OF AWARDS

35. Does the arbitral tribunal have the power to correct or interpret an award on its own or at the parties’ initiative? What time limits apply?

In domestic arbitrations the jurisdiction rests on the courts and there are not time limits but the parties shall apply within reasonable time from the date of delivery of the award.

 In International arbitrations Article 33 of UNCITRAL Model Law is adopted.

 
CHALLENGE OF AWARDS

36. How and on what grounds can awards be challenged and set aside?

In domestic arbitrations an award can be challenged by an application for setting aside of the award on inter alia the following grounds:

(i) Misconduct of arbitrator.
(ii) Misconduct of the arbitral proceedings.
(iii) The award is improperly procured.
(iv) The award is ambiguous and/or without reasons.

In international arbitrations, Articles 34, 35 and 36 of UNCITRAL Model Law are adopted.

RECOGNITION AND ENFORCEMENT

37. What requirements exist for recognition and enforcement of domestic and foreign awards, what grounds exist for refusing recognition and enforcement, and what is the procedure?
 
For the recognition and enforcement of foreign arbitral proceedings the requirement laid down in the New York Convention shall be met.

For the recognition and enforcement of domestic awards, the applicant shall present a true copy of the arbitral award and of the arbitration agreement.

Applications for recognition and enforcement of domestic or foreign arbitral awards shall be made by summons and serve to the Respondent.

The grounds for refusing recognition and enforcement of foreign arbitral awards are stated in New York Convention.

 Cyprus Courts look favourably upon enforcing arbitral awards.

COST OF ENFORCEMENT

38. What costs are incurred in enforcing awards?

The procedure for enforcement and recognition of an award is very summarily and usually takes between 6-9 months to be completed before the First Instance Court. The usual costs includes courts fees, translation fess, bailiff’s fees and legal fees.

OTHER

JUDICIAL SYSTEM INFLUENCE

39. What dominant features of your judicial system might exert an influence on an arbitrator from your country?

The following features of our judicial system might exert an influence on an arbitrator from Cyprus:

(i) More limited discovery in comparison to the USA-style discovery.
(ii) Written witness statements are not common practice but they can be adopted by an agreement of the parties.
(iii) The officers of the parties can testify.

REGULATION OF ACTIVITIES

40. What particularities exist in your jurisdiction that a foreign practitioner should be aware of?

Except for the need of arranging a visa for practioners coming from countries whose citizens need visa to visit Cyprus, there are no other particularities which a foreign arbitration practioner might encounter.

 

 

 


SOTERIS PITTAS & CO LLC
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Contact: Soteris Pittas

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