As the epidemic of the Covid-19 spreads around the globe, more and more professionals are required to work from home, a situation that leads to new challenges, one of which being the signing of documents. In order to tackle such an issue, more and more businesses are now using electronic signatures for the completion of agreements. What are however the legal implications that may follow from the use of electronic signatures with respect to their validity and how will the Courts in Cyprus treat such electronic signatures should their validity be challenged?
The Legislation in relation to Electronic Signatures
Τhe legal framework for electronic signatures in Cyprus is determined by Law no. 55(I)/2018 (the “Law”) which in effect implements Regulation (EU) No. 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the ‘Regulation’). It is needless to say that the Regulation itself is directly enforceable in Cyprus and there was no need for it to have been implemented into national law. Nevertheless, Cyprus chose to implement the provisions of the Regulation into the Law in order provide for a legal framework that would govern electronic signatures and in order to facilitate, amongst others, their legal recognition.
According to the Law, the Competent Authority, which is the Department of Electronic Communications of the Ministry of Transport, Communications and Works, is responsible for implementing the legal framework of electronic signatures in Cyprus. Amongst others, the Competent Authority has the power to grant authorization to trust service providers and in addition monitor and control such trust service providers which in turn will provide trust services under the Law, such as qualified signatures and seals. Once authorized, such trust service providers are referred to as qualified trust service providers.
Trust Service Providers in Cyprus
One of the trust service providers in Cyprus is JCC Payment Systems Ltd while the Cyprus Stock Exchange has assumed the role of a Local Registration Authority of an authorized Registration Authority and mediates for the issue of:
- Qualified Certificates for Electronic Signatures (natural person)
- Qualified Certificates for Electronic Signatures (natural person associated with legal person)
- Qualified Certificate for Electronic Seal (legal person)
What is an electronic signature?
Even though the Law refers to two types of electronic signatures, the electronic signature and the qualified electronic signature it is evident in the Regulation (Article 3) that there are 3 types of electronic signatures, namely:
a) The “Electronic Signature” which means data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign;
b) The “Advanced Electronic Signature” which is a signature that meets the following requirements: 1.it is uniquely linked to the signatory, 2.it is capable of identifying the signatory, 3.it is created using means that the signatory can maintain under his sole control, and 4. it is linked to the data to which it relates in such a manner that any subsequent change of the data us detectable.
c) The “Qualified Electronic Signature” which is an advanced electronic signature that is created by a qualified electronic signature creation device, and which is based on a qualified certificate for electronic signatures.
Such certificates are issued by the qualified trust service providers and, anybody who wants to acquire a qualified signature has to go through the procedure provided by each qualified trust service provider.
Legal effect of electronic signature
In accordance with Article 25 of the Regulation as well as section 9 of the Law a “Qualified Electronic Signature” shall have the equivalent legal effect of a handwritten signature.
Furthermore, Article 25 of the Regulation provides that an “electronic signature” shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it was made in electronic form. Section 9 of the Law, provides that subject to Cyprus Evidence Law – Cap 9 , an electronic signature, which may be in electronic form or may not meet all the requirements for a qualified electronic signatures, shall be accepted as evidence in any criminal or civil proceeding before the Cyprus Courts or any administrative body.
From the above, it is thus evident that only the “Qualified Electronic Signature” will have equal legal effect as that of a handwritten signature and thus face any potential evidential burdens that a handwritten signature would possibly face. Other electronic signatures other than qualified ones, even though may still be considered as admissible in Cyprus legal proceedings, will face the burden of admissibility, i.e. the Court will have to exercise its discretion as to whether or not such signature will be admissible in the proceedings, a matter that will be decided on the circumstances of each case.
Unfortunately, up to date there is no guidance as to how electronic signa
tures will be treated by the Courts since the Law has only been recently enacted and no disputes have been dealt with by Cyprus Courts yet.
Is the qualified electronic signature recognized by the Administrative Bodies?
Section 9 of the Law provides that notwithstanding the provisions of any relevant legislation, the requirement of a signature in proceedings before an administrative body shall be satisfied by a qualified electronic signature.
Recognition of an Electronic Signature in other Member States.
Provided that certain conditions are met, a qualified electronic signature based on a qualified certificate issued in one Member State shall be recognized as a qualified electronic signature in all other Member States.
Conclusion
Certainly, electronic signatures and seals make our lives much easier while at the same time reduce costs and save valuable time. Electronic signatures could be considered as an effective tool in the present unfortunate situation of Covid-19. What remains however to be seen is how courts will treat such signatures if not qualified.
April 2020
ANDRIANNA SOLOMONIDES (Senior Associate Lawyer – Litigation Division), COSTAS APOKIDES (Associate Lawyer – Litigation Division)