Cyprus
From BASESwiki
General Context
Regulation of Alternative Dispute Resolution
Litigation is still the predominant method for resolving disputes in Cyprus, however, alternative dispute resolution (ADR) is becoming an increasingly popular choice, particularly for disputes relating to cross-border transactions and commercial matters, although to date, no official bodies in Cyprus specifically offer ADR services.
The Cypriot Courts are very supportive of ADR, with judges becoming more reluctant to proceed with hearing a case involving specialised, technical matters or scientific issues requiring specialised knowledge. In such cases, they are likely to recommend the appointment of an arbitrator.
In order to commence arbitration proceedings, there must be an arbitration agreement between the parties, which is usually irrevocable and therefore binding, unless it contains a contrary provision or a court order is issued (Arbitration Law 1944, Section 3, Cap. 4 – the law governing domestic arbitration in Cyprus). The agreement should be in writing - Arbitration Law 1944, Section 2 and the International Commercial Arbitration Law L.101/87 - international arbitration.
If the parties commence legal proceedings in any Court against an arbitration agreement, the Court has a discretionary power to stay the proceedings under Article 8 of the domestic arbitration law for referral to an arbitrator. In Cyprus, all commercial matters are arbitral. However, any matter concerning criminal or family law is considered to be non-arbitral.
Alternatively, the parties can voluntarily refer their dispute to an independent third party who helps them negotiate in order to find a settlement via mediation.
We would advise clients to include a detailed arbitration clause in their commercial agreements covering their requirements for a well-organised, efficient and final resolution of the dispute on a cost- effective basis. It is important in dealing with disputes that practical points are not missed. All agreements should be read in accordance with the Arbitration Law, Cap. 4 for domestic arbitration.
It is often the case that commercial transactions will refer matters of dispute to arbitration, often such clauses appear in the contracts between the parties, the same can be said for transactions which involve overseas and cross border matters
Main institutions administering ADR?
There are no specific institutions that are solely for the purposes of administering ADR in Cyprus. In relation to arbitration the arbitration court is a private tribunal of the parties own choice and if on the other hand the parties chose to revert to mediation the parties will voluntarily chose an independent third party.
Mandatory or court-annexed mediation?
Unlike arbitration, mediation is not recognised and referred to by parties to the same extent and like arbitration it is not mandatory in Cyprus. The Courts, as stated above, encourage the parties to a dispute to seek alternative methods of resolution rather than reverting to litigation.
The parties can voluntarily refer their dispute to an independent third party who helps them negotiate in order to find a settlement via mediation.
The results of such procedures depends largely on the willingness of the parties to put in the time and effort required in order to seek out a suitable conclusion, it also depends on the ability and efforts of the mediator as the skill of the independent third party will go along way to assisting and convincing the parties to reach a mutually agreeable solution.
Enforceable or binding resolutions?
Arbitration awards, once registered and enforced are considered to be the same as court judgments. In this sense they are enforceable and can be executed as any other court judgment can. The registration may be affected by an application by summons being filed by the creditor which can be opposed by the debtor, by raising grounds of validity of the award. Once registered however the award becomes binding on the parties.
Practice of Alternative Dispute Resolution
Due to the increasing use of ADR in Cyprus it can be safely said that the success rates of such procedures is favourable.
The climate for using ADR compared to litigation?
As stated above, litigation is still the predominately used method for resolving disputes, however, ADR is becoming an increasingly more popular choice for parties, especially those involved in commercial transactions and overseas and cross border transactions.
As the use of arbitration continues to rise, trends are becoming more apparent, for example other than the increasing use in commercial transactions it is becoming increasingly more popular to use arbitration in disputes relating to building contractual disputes.
It could be said that the increasing awareness of business here in Cyprus of the different forms of ADR which are becoming more and more accessibly may be a contributing factor to the changing attitudes of judges here in Cyprus who are becoming more reluctant to hear cases which require specific or scientific knowledge of the subject and are increasingly more likely to prefer to refer the matter to arbitration.
Are ADR processes clearly and publically set out?
Although it is still the case that many are not as aware of the ADR procedures as they should be the processes are laid out in the national laws which are detailed above. The laws are publically available and to this extent are publically set out for all to view and understand. Many lawyers are now publishing articles and chapters which are an attempt to raise people’s awareness of the procedures.
Is ADR easily accessible to the public and to businesses?
All businesses are entitled to use the ADR processes, the lawyers of businessmen should make their clients aware of the necessity to provide for the use of such procedures. The provisions for the use of ADR will specify the ways in which and under which circumstances the proceedings can be initiated, however the laws are favourable to all parties concerned. The costs of arbitration are still reasonable as is the time involved, the process can often be made more swift and efficient by the attitudes of the parties involved and the extent of their willingness to find a quick and satisfactory solution.
All commercial matters are suitable for the alternative dispute procedures, this includes competition law, however criminal and family matters are not currently arbitrable.
Mediation and conciliation are available to be used for all business and commercial matters and could also extend to family matters however the result is not binding as such in the same manner that arbitration and litigation are.
ADR procedures suitable for use by businesses to resolve disputes with communities, employees or consumers?
Both arbitration and mediation are suitable methods for used by businesses to resolve disputes, in particular arbitration would be most suitable for disputes with consumers, if possible mediation would be particular useful in disputes with employees however arbitration provides a binding result which is favourable. However, it must be remembered that an arbitration agreement must be in place in writing, as detailed above.
The Social and Environmental Regulation of Business
The human rights provisions in the Constitution of Cyprus are contained in Part II Articles 6-35, and are titled ‘Fundamental Rights and Liberties’. Cyprus signed the Rome Convention on the 16th December 1961 and ratified it by the European Convention for the Protection of Human Rights (Ratification) Law 1962 – Law 28 of 1962. Cyprus as a full member of the European Union must ensure that Human Rights are protected by the European Human Rights law, for example the Human Rights Act 1998 c.42.
Further, the Pancyprian Association for the Protection of Human Rights is a Non-Governmental organization, established and registered according to the law, in 1976. The Association's main objective is the protection and promotion of human rights and fundamental freedoms in the Republic of Cyprus and the contribution towards safeguarding human rights and fundamental freedoms worldwide.
In relation to environmental policy following the accession of Cyprus to the European Union in 2004, the environmental policy has been subjected to a fundamental review, in order to be brought into line with over 300 legislative instruments (Regulations and Directives) and other action programmes which form part of the manifold, complicated and detailed environmental chapter of the acquis communaitaire. Although the new legislative framework is comprehensive its implementation has not reached maximum levels of efficiency and progress is yet to be made for visible enhancements in the environmental and quality of life, however as with all areas of the law here in Cyprus the relevant bodies are working towards ensuring that all laws are effective and comply with the European Laws.
The Ministry of Agriculture, Natural Resources and Environment is the competent authority for the endorsement and implementation of the governmental policy on environmental issues.
Relevant Mechanisms
- Communication Procedure, Convention on the Elimination of Racial Discrimination
- Communication Procedure, Convention on the Elimination of all Forms of Discrimination Against Women
- Communication Procedure, Convention on the Rights of Persons with Disabilities
- Communication Procedure, International Covenant on Civil and Political Rights
- Consumers Association, Cyprus
- Independent Recourse Mechanism, European Bank for Reconstruction and Development
- International Consumer Protection and Enforcement Network
Relevant Websites
Keywords
Author
| Original Author(s) | Georgiades & Mylonas, Advocates & Legal Consultants |
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