Dispute resolution

Translations are frequently required for various documentations for official use before public authorities, institutions and courts internally or abroad. It is a matter of public law of each country to determine when an “official” translation is required and what comprises the elements of such translations in order to be regarded as legally valid and accepted documents. For purposes of complying with such requirements “certified” translations are provided in Cyprus. The only public available authority for providing certified translations is the Translations Section of the Press and Information Office, one of the departments of the Ministry of Interior. Cyprus Courts have commented that the certified translations provided by the Press and Information Office to date are accepted as valid translations for official use, although criticism was also attracted on the ground that such translations do not satisfy the requirements set in various international instruments, such as the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention”) as the translations shall be accompanied by an affidavit of the person making the said translation in order to comply with such requirements. Various countries have incorporated the services of sworn translators, that is to say professional translators with particular accreditations who are authorized by an assigned authority to translate and endorse documents. The services of sworn translators are now to be inserted in Cyprus as well. Pursuant to its decision with number 84.579 dated 28/3/2018, the Council of Ministers passed a decision for the approval of the bill for the introduction of the services of sworn translators in Cyprus, as a means of decentralizing the provision of certified translation services from a sole public authority, that is to say the Press and Information Office. To this end, the law for the Registration and Regulation of the Provisions of Sworn Translators in the Republic, Law 45(Ι)/2019 was passed and published on 27/3/2019. It is expected that the law will be enforced by the end of 2019. Among others the law provides that a Council for the Registration of Sworn Translators will be established under the auspices of the Press and Information Office, that will facilitate the registration of such professionals to the Registry of Sworn Translators, a copy of which will be published annually to the Official Gazette of the Republic and the website of the Press and Information Office. The law sets high standards for the professional background and moral standing of the persons that will be eligible for registration. Sworn translators shall provide their services under the requested oath or declaration given upon their registration and they will be subjected to the supervision and penalties of the Disciplinary Commission that shall be established for this purpose. This is a particularly interesting development in line with the practice of various countries and the provisions of international instruments such as the aforesaid New York Convention which provides that for an arbitral award to be recognised and enforced in a member state, the party applying shall supply the court with a translation of the arbitral award and arbitration agreement in an official language of the country in which the award is relied upon, whereas such translation shall be certified by an official or sworn translator or by a diplomatic or consular agent (Article IV). The said development is welcomed as it aims at addressing potential procedural and technical impediments and setting a higher standard for the provision of translation services in the said sector. For further information, please contact Constantina Zantira, Associate at [email protected]

A Q&A guide to dispute resolution law in Cyprus, providing a structured overview of the key practical issues concerning dispute resolution, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals. Click here for more information.

This country-specific Q&A guide provides a structured overview of the key practical issues concerning arbitration in Cyprus, including any mandatory provisions and default rules applicable under local law, confidentiality, local courts' willingness to assist arbitration, enforcement of awards and the available remedies, both final and interim. Click here for more information.

Recently there were a lot of publications within the European Union expressing concerns about the allegedly very high number of Cypriot passports being given to foreign investors the last few years. The Council of Ministers has decided on 9th January 2018 with the decision with number 84.069, to impose a stricter supervision of all the parties involved in the Scheme for the naturalisation of non-Cypriot investors in Cyprus by exception. The said decision was officially published in the Gazette of the Republic of Cyprus on 2nd March 2018.  It provides the following: The establishment of a Supervisory and Control Committee, consisting of officials from the Ministry of the Interior, the Ministry of Finance and the Cyprus Organization of Promoting investments (CIPA). The establishment of a Register of Service Providers in relation to the “Scheme for Naturalisation of Investors” where all the natural and legal persons providing services related to the Scheme, will have to be registered.  The said natural and legal persons shall apply for their registration and they shall meet specific admission criteria for their application to be successful. Applications for the Naturalisation of non-Cypriot Investors filed by natural and legal persons not registered with the Register will not be accepted. The adoption of a Code of Conduct, which has been prepared by the CIPA and which includes guidelines regarding the promotion of the said Scheme. The Code of Conduct will be applied by all natural and legal persons related to the Scheme, such as Service Providers, real estate agents, construction companies, banking and credit institutions et al.  The prohibition of the advertising of the Scheme in public places (including the internet) and particularly in relation to the image of the Cypriot passport.  The details in relation to this prohibition, as well as the consequences of non-compliance, are included in the Code of Conduct mentioned above. The obligation of the Applicant and of the Registered Service Provider to submit a signed declaration confirming their compliance with the Code of Conduct and practices and that they are fully informed in relation to the procedures of the Scheme. The content of the above is to provide an overview of the subject matter. Specialist advice should be sought on each particular case. For any further information, please contact Andria Kouloumi at [email protected] Share

On 13 July 2018 the General Court of the European Union ("the Court") issued its judgments on the cases T-680/13 and T-786/14 whereby the claims for compensation based on non-contractual liability launched by several individuals and companies in relation to the Cypriot banking sector claiming damages from the European Union have been rejected. Introduction Due to their exposure to Greek bonds, in early 2012, several banks established in the Republic of Cyprus (‘RoC’) and more specifically, the Cyprus Popular Bank Public Co Ltd (‘Laiki’) and Bank of Cyprus Public Co Ltd (‘BoC’), faced financial difficulties. Particularly, the losses suffered by Laiki and BoC amounted to more than EUR 4 billion and which represented approximately 25% of the GDP of the RoC. Simultaneously, the RoC was also facing financial and budgetary difficulties as a result of the exposure of its banking sector to the Greek economy and having been downgraded by rating agencies. Consequently, the RoC became unable to refinance itself at rates compatible with long-term fiscal sustainability and issued various measures in order to cover its financing needs which included the issuing of short-term treasury bonds and receiving a loan of EUR 2.5 billion from the Russian Federation. By 25 June 2012, rating agencies had downgraded the RoC to a speculative grade and the RoC’s bonds ceased to be accepted as collateral for the monetary operations of the Eurosystem. On the same day, the RoC requested for financial assistance from the ESM (European Stability Mechanism). According to the Cypriot Government, the assistance sought to ‘contain the risks of the Cypriot economy, notably arising from the negative spill over effect through its financial sector, due to its large exposure to the Greek economy’.  On 26 April 2013 a Memorandum of Understanding was signed between the RoC and the Commission whereby it was agreed that financial assistance would be granted in the form of a microeconomic adjustment programme. The programme was to be negotiated by the Commission together with the European Central Bank (‘ECB’) and the International Monetary Fund (‘IMF’). Following the implementation of the programme, major bank restructuring took place with the aim of correcting the budget deficit and restoring the soundness of the RoC’s financial system. The Claims The claims arose by several individuals and companies (the ‘Applicants’) who at the time were depositors in Laiki and BoC or shareholders or bondholders thereof.  As a result of the implementation of the measures the Applicants considered that the value of their deposits, shares or bonds suffered from a substantial reduction in value.  Hence the Applicants brought actions for non-contractual liability before the General Court of the European Union in order to be compensated by the European Union for the alleged losses suffered.  The Court examined whether the 3 conditions in order for the European Union to incur non-contractual liability were satisfied. In particular, the conditions to be met are (i) the unlawfulness of the conduct complained of the European Union Institution, (ii) the reality of the damage and (iii) the existence of a causal link between the conduct of the institution and the harm invoked.  The Court noted that in order for the first condition to be met, a sufficiently serious infringement of the rule of law intended to confer rights on individuals must be established. The Applicants argued that in this instance, the rule of law was (i) the right to property, (ii) the principle of legitimate expectations and (iii) the principle of equal treatment. Findings of the Court The right to property  The Applicants considered that their right to property has been deprived with regard to deposits held in or shares or bonds of Laiki and BoC.  The Court noted that it has already examined three of the measures imposed by the Memorandum of Understanding by the judgments of 20 September 2016 namely,  the takeover by BoC of the insured deposits in Laiki and the maintenance of uninsured deposits in Laiki pending its liquidation, the conversion of 37.5% of uninsured deposits in BoC into shares with full voting and dividend rights, and the temporary freezing of another part of the uninsured deposits, whereby it was held that ‘those measures could not be considered to constitute a disproportionate and intolerable interference which infringes the right to property’.  The Court examined other measures falling within the right to property such as the reduction of the nominal value of BoC shares. Such a measure was intended to ensure the stability of the Cypriot financial system and the euro-zone in its entirety. Since the less restrictive alternatives would not have been feasible nor would have they allowed the expected results to be achieved, the measure has been deemed to be proportionate to the objective pursued.  Additionally, the Court examined the aim and procedure for the sale of the Greek branches and found that there was no infringement to the right of property.  The principle of legitimate expectations In order to rely upon this principle, it must be assumed that precise, unconditional and consistent assurances were provided to the interested party by the competent European Union authorities. The Applicants claimed that they were given consistent and precise assurances by European Union authorities that the measures provided for in the Memorandum of Understanding would not be imposed on RoC.  The Court held that the Applicants could not derive a legitimate expectation from the acts and conduct invoked in their actions. The principle of equal treatment The Applicants claimed that the uninsured depositors of Laiki were discriminated against vis-à-vis creditors thereof whose claims were based on the Emergency Liquidity Assistance (‘ELA’) granted to Laiki.  Further, discrimination was claimed based on discrimination vis-à-vis depositors, shareholders and bondholders of banks established in other Member States which benefited from financial assistance prior to RoC as well as vis-à-vis the cooperative banking system which was not subject to a bail in.  The Court held that the case concerns different situations that are not comparable and hence no unlawful discrimination can be established.  Additionally, with regard to the allegation of discrimination based on nationality vis-à-vis depositors of the Greek branches, the Court found that although the situations in this instance are comparable, the difference is justified by an objective and reasonable objective, namely the need to prevent contagion from the Cypriot banking system to the Greek financial system. As a result of the Applicants’ failure to demonstrate the infringement of the first condition, that of the rule of law, and consequently the failure to satisfy the condition for establishing a non-contractual liability of the European Union, the Court rejected the claims for compensation.   Conclusion These recent judgments have come to follow the decision of 20 September 2016 , whereby it was held that the objective of the measures taken were of a general interest pursued by the European Union, namely the stabilisation of the euro area as a whole.  Taking into consideration the measures imposed and the imminent risk of the financial risks that would have been borne by the depositors had both the banks failed, the Court has deemed that such measures were necessary and proportional to the objectives pursued. Seeing as the judicial bodies of the European Union have thus far not been satisfied that the measures taken in order to save the financial system of the RoC and to extent, that of the euro zone, amounted to a disproportionate and intolerable interference of the Applicants’ right to property as guaranteed by Article 17(1) of the Charter, it appears that any claims for compensation against the European Union Institutions will fail to be acknowledged by the Court of Justice of the European Union - CJEU.  It remains to be seen whether the European Court of Human Rights - ECHR, will take a different approach as to whether the recognised restrictions of the right to property are justified.  Disclaimer  This publication has been prepared as a general guide and for information purposes only. It is not a substitution for professional advice. One must not rely on it without receiving independent advice based on the particular facts of his/her own case. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication. July 2018

Due to existing problems with regards to companies competing for the undertaking of public projects, on the 28th September 2015 the Cabinet decided to give an end to the scandals involving the squander of millions of public money by approving an amendment Bill, which would add to the conditions for public tenders, the requirement of providing a Criminal Record Certificate for legal entities. Until today, this was not required due to gaps and loopholes in the existing Law. Provided this Bill will be passed into Law by its publication at the Official Gazette of Cyprus, companies applying for public tender will be asked to produce a certificate that would show they have a clean criminal record. Due to existing problems with regards to companies competing for the undertaking of public projects, on the 28th September 2015 the Cabinet decided to give an end to the scandals involving the squander of millions of public money by approving an amendment Bill, which would add to the conditions for public tenders, the requirement of providing a Criminal Record Certificate for legal entities. Until today, this was not required due to gaps and loopholes in the existing Law. Provided this Bill will be passed into Law by its publication at the Official Gazette of Cyprus, companies applying for public tender will be asked to produce a certificate that would show they have a clean criminal record. The main aims of the amendment Bill are as follows: (a)   To regulate the issuance of Criminal Record Certificates for all corporations seeking tenders in the public sector, (b)   To combat corruption and (c)   To provide regulation and enable the authorities to control cases of public tenders in cases where a company fails for example to pay its taxation or will examine whether they have committed some other wrongdoing. Other measures towards combating corruption are on the way including a bill that would protect individuals wishing to provide information to the police that would help in the investigation of cases of corruption.  For further information on this topic please contact Ms. Nada Starovlah ([email protected]) 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.

The significance of the EU Regulation 44/2001 is well known as its rules determine both the jurisdiction of courts in the EU in civil and commercial disputes and the conditions for the recognition and the enforcement of their judgments in other EU member States. The significance of the EU Regulation 44/2001 is well known as its rules determine both the jurisdiction of courts in the EU in civil and commercial disputes and the conditions for the recognition and the enforcement of their judgments in other EU member States. As of 10th January 2015, the EU Regulation 1215/2012 (“Recast Regulation”) replaced the EU Regulation 44/2001 hence any proceedings instituted on or after the 10th of January 2015 will be based on or regulated by the Recast Regulation. Many of the basic principles under the EU Regulation 44/2001 remain unrevised although the paragraph numbering have such as the general rule of jurisdiction under Article 2 which stated that EU defendants should be sued in the courts of their domicile (new Article 4) and the alternative grounds of jurisdiction such as in matters relating to contract and torts (Article 5) (new Article 7).  The key changes effected by the Recast Regulation include jurisdiction agreements; the lis pendens rule; arbitration-related court actions and the abolition of exequatur. 1. Jurisdiction agreements One of the most central changes is that the Recast Regulation provides an expanded recognition of exclusive jurisdiction agreements within the European legal framework, under the new Article 25 by improving the position for litigants who have agreed that a particular Member State is to be granted exclusive jurisdiction. For example, a Cypriot company and a Russian company have an English jurisdiction clause in their agreement, the English court will have jurisdiction under the new Article 25. 2. The abolition of exequatur The old process for recognizing and enforcing judgments under which a declaration of enforceability was required to enforce a foreign judgment in another member state (Art 39 of the EU Regulation 44/2001) has been abolished. Now parties can apply to have a judgment from another EU Member State recognized and enforced by presenting a copy of the judgment and a certificate in a prescribed format (Articles 37 and 53). 3. The Arbitration Exception Arbitration had been expressly excluded from the scope of the EU Regulation 44/2001 under Article 1.2(d), but there was little guidance as to what was covered. The recast Regulation seeks to reinforce and clarify the arbitration exception by expressly confirming that the Regulation does not apply to any court actions or proceedings ancillary to arbitration. 4. Lis alibi pendens Previously under Article 27 of the EU Regulation 44/2001 priority was given to the Court which was the first seized nonetheless  under the Recast Regulation reforms the lis pendens rule has been reformed. In particular, when an exclusive jurisdiction clause is involved priority is given to the court designated in such an agreement and there is no need to wait for any other Member State courts seised earlier in time to consider their jurisdiction first. Any such other courts will be required to stay their proceedings in the meantime. (New Article 31(2)).   For further information on this topic please contact Ms. Nada Starovlah ([email protected]) at SOTERIS PITTAS & CO LLC, by telephone (+357 25 028460) or by fax (+357 25 028461)

In a recent decision of the District Court of Nicosia, it has been held that Cyprus Courts have jurisdiction to adjudicate on applications for enforcement of foreign judgments and foreign arbitral Awards, even if both the judgment creditor and judgment debtor reside outside Cyprus. The above decision has cleared the uncertainties and problems created in enforcing such foreign judgments and arbitral awards, due to the issue of previous decisions by Cypriot District Courts, declaring that there was no such jurisdiction because of the provisions of the Procedural Law 121 (1)/2000, which regulates the procedure of enforcement of foreign judgments in Cyprus. View in Publications For further information on this topic please contact Mr. Soteris Pittas at SOTERIS PITTAS & CO LLC, by telephone (+357 25 028460) or by fax (+357 25 028461) or by e-mail ([email protected]