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 when is the Convention in force? Were any declarations or notifications made under articles I, X and XI of the Convention? What other multilateral conventions relating to arbitration is your country a party to?
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 York Convention has been in force since 29 March 1981.
The only declarations or notifications made under articles I, X and XI of the convention, are 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
• 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.
Since 1966 Cyprus has been 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 has bilateral investment treaties (BITs) with 17 countries including China, India, Italy and Russia.
BITs 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); and
• an ad hoc arbitration, which is most commonly conducted under the UNCITRAL rules.
Cyprus has BITs with the following countries:
• 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 and 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?
Unfortunately Cyprus does has no single code containing all sources of law regulating both domestic and foreign arbitral proceedings and enforcement of awards.
All international Commercial arbitrations as defined in Article 1 (3) of the UNCITRAL Model Law are regulated by the Cyprus Arbitration Law No. 101/87 which is based on the UNCITRAL 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 foreign arbitral awards is regulated by the Law 84/79 ratifying the New York Convention and Law 120(1)/2000, regulating the registration and enforcement of foreign judgments and arbitral awards.
An arbitration Agreement providing for arbitration out of the Cyprus Republic is considered to be a foreign arbitration.
4) Is your domestic arbitration law based on the UNCITRAL Model Law? What are the major differences between your domestic arbitration law and the UNCITRAL Model Law?
Insofar as international commercial arbitrations are concerned, as defined in article 1(3) of the Model Law, the Cyprus Arbitration Law No. 101/87 is based on the UNCITRAL Model Law. All other arbitrations are considered domestic and are governed by the Arbitration Law CAP 4.
All the mandatory provisions contained in the UNCITRAL Model Law were adopted verbatim by the Law concerning International Commercial Arbitrations, 1987 (Law 101/87), regulating only the international commercial arbitration disputes.
The Arbitration Law CAP 4 – which regulates all arbitrations which fall outside 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; the discretionary power to stay court proceedings to refer the dispute to arbitration; the appointment of arbitrators if the parties disagree on whom to appoint; the jurisdiction to stay the arbitral process in order that a dispute involving fraud or, allegations of dishonesty, be adjudicated by a court; the removal of arbitrators for misconduct; extensive powers to review the arbitral award in the context of an appeal, an application for registration and enforcement, any jurisdictional issue, misconduct, lack of reasoning of the award, or wrong application or interpretation of the applicable law of the dispute.
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 international commercial arbitrations. The Arbitration Law CAP 4, which regulates all other arbitrations not falling within the ambit of Law 101/87, does not contain any mandatory provisions. The courts, under the provisions of Arbitration Law CAP 4, exercise 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?
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 if 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 Law 101/87, regulating international commercial arbitrations, adopts verbatim article 28 of UNCITRAL Model Law. If the parties do not expressly choose 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?
In Cyprus there is no arbitration institution and most arbitrations are 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 or the Austrian Arbitration Centre in Vienna, etc.
ARBITRATION AGREEMENT
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. But the following types of disputes are not arbitrable:
• the statutory right of a shareholder of a limited liability company to petition the winding up of the company;
• matrimonial disputes;
• disputes involving illegality and fraud (this covers only domestic arbitrations);
• disputes falling within the ambit of articles 81 and 82 of the EC Treaty;
• disputes which will affect the public at large such as a judgment in rem against a ship, etc; and
• 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 or not an arbitrator is named therein.
In international arbitration, article 7 of the UNCITRAL Model Law is adopted.
The following requirements exist for a valid arbitration agreement:
• The parties must have legal capacity to conclude the arbitration agreement.
• The arbitration agreement shall be valid according to Cyprus Contract Law (It must not ,for example, be tainted with illegality or fraud.)
• The arbitration agreement shall refer to disputes arising out of a specific contractual relationship or to a specific dispute.
• The matter to be refer to arbitrators shall be arbitrable.
An arbitration agreement entered into by the State needs the prior approval of the Council of Ministers of the Republic of Cyprus in order to be valid. Any formal requirement can be cured if the Party who could raise an objection does not object. Arbitration agreements can be contained in general terms and conditions.
Enforceability
10) In 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 grounds of illegality, avoidance, rescission, termination, ambiguity, non-operation, termination for breach of the arbitration agreement, frustration, waiver by the party which relies on the arbitration agreement, and public policy, etc.
Furthermore, the court has discretionary power to refuse a stay of court proceedings in order for the dispute to be referred to arbitration, or when allegations of fraud or dishonesty are made against the plaintiff; when any questions of law raised are too complex to be resolved by arbitrators; when there is a multiplicity of proceedings between the same parties only some of which are subject to arbitration; 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 acknowledges liability).
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, which are as follows:
Death
The death of a party to an arbitration agreement does not discharge the arbitration agreement or the cause of action to which it 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 is thus 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. But 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 resulting 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. If it is restored to the register, however, 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.
Removal of the company 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:
• by an assignment of a contract containing an arbitration clause, provided that the said contract is by its nature assignable;
• the administrator of the estate of a deceased person who was a contracting party to an arbitration agreement.
• 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;
• 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; or
• 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 principal 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?
To date there has been no decision of the Cyprus courts adopting or rejecting the ‘group of companies doctrine’, but we expect that the Cyprus courts or arbitral tribunals will follow English precedent or precedent from other common-law jurisdictions.
Multiparty arbitration agreements
13)What are the requirements for a valid multiparty arbitration agreement?
There are no special requirements in our domestic arbitration law or case law concerning the validity and enforceability of a multiparty arbitration agreement.
For domestic arbitrations, the relevant requirements are laid down by Arbitration Law CAP 4.
In the case of an international arbitration falling within the ambit of article 1(3) of UNCITRAL Model Law, these requirements are laid down in the Model Law, the requirements are laid down within that law.
In the event of any disagreement between the parties of a multiparty arbitration agreement to the joint nomination of one arbitrator, then any party can apply to the Court in order to decide the issue.
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 therein are adopted verbatim.
Concerning domestic arbitrations regulated by the Arbitration Law CAP 4, the court is involved in the appointment of an arbitrator in the following instances:
• if there is no agreement between the parties to an arbitration agreement which provides for the appointment of a single arbitrator;
• if the single arbitrator appointed by the parties dies or refuses to act as an arbitrator, or is incapable of acting as an arbitrator; or
• if there is no agreement between the parties or their two arbitrators to appoint the umpire, or if the umpire dies, refuses to act or 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?
CAP 4, which regulates domestic arbitrations, provides that any party to a domestic arbitration may apply to the court to remove arbitrators on the following grounds:
• failure to conduct the proceedings with reasonable dispatch;
• misconduct of the arbitrator or of the proceedings;
• failure to be impartial or to act impartially;or
• physical or mental incapability to conduct the proceedings or justifiable doubts as to his capacity of the arbitrator.
In 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 exhausted before the court can be requested to intervene.
Impartiality
There is sufficient ground to intervene for potential lack of impartiality in the following situations:
• when the arbitrator has some connection with one or other of the parties;
• when the arbitrator has some interest in the outcome of the proceedings; and
• when the arbitrator’s conduct before 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 courts in relation to judges, is fully adopted 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 arise 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 shall conduct the arbitral proceedings with fairness and impartiality.
An arbitrator is not 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 is removed by the court, is not 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.
JURISDICTION
Court proceedings despite arbitration 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, is entitled to apply to stay the proceedings in order for the dispute to be referred to arbitration. The court has discretionary powers whether to stay or not the legal proceedings.
In 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 domestic arbitrations all jurisdictional issues are within the competence of the courts which exercise an extensive supervision over such arbitrations.
Although 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 international arbitrations, article 16 of UNICTRAL Model Law is adopted.
ARBITRAL PROCEEDINGS
Place and language of arbitration
20) Failing prior agreement of the parties, what is the default mechanism for the place of arbitration and the language of the arbitral proceedings?
In domestic arbitrations, the issues will be decided by the court if the parties disagree.
In international arbitrations, articles 20 and 22 of UNCITRAL Model Law are adopted.
Commencement of arbitration
21) How are arbitral proceedings initiated?
Unfortunately in Cyprus we do not have any arbitration institution or arbitral rules regulating domestic arbitrations. In the absence of any agreement of the parties as to the applicability of specific arbitral rules, the Civil Procedure Rules apply pursuant to article 30 of Arbitration Law CAP 4.
Domestic arbitrations are started by the dispatch of a written notice by one of the parties to the arbitral agreement requesting the other party to appoint an arbitrator or arbitrators.
As soon as the arbitrator is appointed or the arbitral tribunal is constituted, the parties are invited to appear before the arbitrator or tribunal to agree on the procedure to be followed, including time limits for lodging of pleadings, discovery, exchange of witnesses statements, hearing dates, and so on.
In international arbitrations, article 21 of the UNCITRAL Model Law is adopted verbatim.
Hearing
22) Is a hearing required and what rules apply?
In domestic arbitrations, 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 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. But this does not in any way negate the arbitrator’s function of acting in a strictly judicial manner between the parties and giving them a fair chance to adduce evidence accordingly.
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 decide to put before him. On certain occasions he must be asked to give a ruling as to the admissibility of evidence, or its 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 of misconduct.
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 have authorised him to make use of that knowledge, it is proper for him to do so.
Arbitrators cannot give evidence at the tribunal. Nor can they act on a private opinion without disclosing it to the parties if the opinion contradicts the view given in evidence.
The parties can present their own expert witnesses, but they also have the right to jointly request the appointment of an expert by the arbitrator.
In domestic arbitrations the arbitrator has powers:
• acquire evidence and documents from the parties;
• examine witnesses on oath or affirmation; and
• administer oaths or take affirmations from witnesses.
Owing 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 arbitration proceedings, has jurisdiction to issue:
• an order for discovery of documents;
• an order for giving evidence by affidavit;
• 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;
• an order for the inspection of any property which was the subject of the reference to arbitration; and
• 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 present if that person is not a representative. Exclusion without good reason might be held to amount to misconduct.
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:
• orders for the preservation, detention or sale of property forming the subject matter of the dispute;
• orders for appointment of receivers;
• orders for interim relief like a mareva injunction, but also injunctions against breaches of an underlying contract pending the outcome of the arbitration proceedings;
• orders for security for costs;
• orders securing the sum in dispute; and
• 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 in support of international commercial arbitration conducted in Cyprus or abroad, on the basis of either Article 9 of the UNCITRAL Model Law or Article 31 of the EU Regulation 44/2001.
Interim measures by the arbitral tribunal
27) What interim measures may the arbitral tribunal order after it is constituted? In which instances can security for costs be ordered by an arbitral tribunal?
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 are 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 types of interim measures that the courts can issue, including the freezing of injunctions, the appointment of a receiver, an order securing the amount of the dispute, an order for the protection of the subject matter of the dispute and 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 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 ordered in the following instances:
• when a claimant or counterclaimant who ordinarily resides outside the countries which are member states of EU does not have any immovable property within the jurisdiction of Cyprus registered on his or her or its name;
• when the claimant or counterclaimant is unlikely to be able to meet any order for costs against it; and
• when the claimant’s or counterclaimant’s assets are in a country that 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 not 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? What are the consequences if an arbitrator refuses to take part in a vote or sign the award?
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 can 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.
If the arbitrator refuses to take part in a vote or sign the award, he or she can be removed under the terms of the agreement of the parties or under arbitration law. In such a case the parties may appoint a replacement to conclude proceedings.
Form and content requirements
29) What form and content requirements exist for an award? Does the award have to be rendered within a certain time limit?
In domestic arbitrations, Arbitration Law CAP 4 does not impose any requirements for the form and content of an award. In practice, the arbitrators shall follow the common law principles in drafting their arbitral awards (written or oral awards, with no obligation to sign the award and no obligation to include a date of the award).
In international arbitrations, article 31 of UNCITRAL Model Law is adopted.
Cyprus Domestic Arbitration Law does not impose any time limits for the issue of arbitral award but the Parties can include such requirement in their Arbitration agreement. Such a time limit can be extended by the written consent of all Contracting Parties or by an order of the Court.
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?
The timing of award is very important for a number of reasons:
• there may be contractual time limits within which an award is to be made;
• an award becomes final and binding once it has been made;
• once an award is made, the arbitrators become functus officio in relation to the matters of the award; and
• 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 in the following instances:
• 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; and
• any application to set aside the award is to be made within 90 days from the date of the delivery of the award.
Any applicable time limit for a challenge or a request for correction of an award commences from the date of the communication of the arbitral award to the Parties.
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:
• a final award, disposing of all outstanding issues between the parties;
• a partial award disposing a particular issue arising between the parties;
• a provisional or interim award whereby the arbitrators award relief pending the making of the final award; and
• 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:
• the payment of a sum of money – including payments in foreign currency – plus interest;
• declaratory relief;
• injunctive relief;
• specific performance of a contract other than a contract for the sale of land;
• rectification, setting aside or cancellation of a contract;
• an award that may give directions as to the future use of a property; and
• an award of costs (eg, 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?
Domestic arbitral proceedings can be terminated by an order of the arbitral tribunal in the following circumstances:
• when the claimant withdraws his claim, unless the respondent objects thereto and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute;
• when the parties agree on the termination of the proceedings; and
• when the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.
In 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? What costs are recoverable?
The costs of arbitral proceedings prima facie follows the event.
The arbitrators have 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 are 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, costs do not follow the event:
• 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;
• where the claim is deliberately exaggerated, costs may be awarded to the respondent;
• when the claimant has been obstructive in his conduct of the arbitration, then costs may likewise awarded to the respondent;
• where the successful party has wasted costs by for example calling unnecessary witnesses, using unnecessary procedures; and
• 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.
Depending on the existence of any agreement of the parties to the contrary, the following costs are recoverable:
• the arbitrator’s own fees and expenses;
• the fees and expenses of any arbitral institution involved in the arbitration proceedings;
• the parties’ own costs including legal costs and costs incurred in negotiating the reference to the arbitrators; and
• any costs incidental to the arbitration which include the fees of experts, the hiring of premises for holding arbitrations.
Interest
34) May interest be awarded for principal claims and for costs and at what rate?
Subject to a contrary agreement by the parties, the arbitrators have power to award simple or compound interest from such dates and at 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 cent 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 no 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 the award on, inter alia, the following grounds:
• misconduct of an arbitrator;
• misconduct of the arbitral proceedings;
• if the award is improperly procured; and
• if the award is ambiguous 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.
38) Arbitration Centre
The Cyprus Chamber of Commerce and Industry (“CCCI”) administers dispute resolution both in its own capacity and in the capacity of the National Committee of the ICC, mostly under the ICC Rules of Arbitration and Conciliation.
Cost of enforcement
39) What costs are incurred in enforcing awards?
The procedure for enforcement and recognition of an award usually takes between six and nine months to be completed before the First Instance Court. The usual costs include courts fees, translation fess, bailiff’s fees and legal fees.
OTHER
Judicial system influence
40) What dominant features of your judicial system might exert an influence on an arbitrator from your country?
The following features of the Cyprus judicial system might exert an influence on an arbitrator from Cyprus:
• more limited discovery in comparison to USA-style discovery;
• written witness statements are not common practice but they can be adopted by an agreement of the parties; and
• the officers of the parties can testify.
Regulation of activities
41) 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 a visa to visit Cyprus, there are no other particulars that a foreign arbitration practioner might encounter.
For further information on this topic please contact
Mr. Soteris Pittas( spittas@pittaslegal.com ) at SOTERIS PITTAS & CO LLC,
by telephone (+357 25 028460) or by fax (+357 25 028461)
The content of this article is intended to provide a general guide to the subject matter. Specialist advise should be sought about your specific circumstances.
