CYPRUS Law and Practice Contributed by: Menelaos Kyprianou, Constantina Zantira, Andreas Lytras and Eleana Poulladou, Michael Kyprianou & Co LLC
Michael Kyprianou & Co LLC 17 Stasinou Avenue 1060 Nicosia Cyprus
Tel: +357 22 447777 Fax: +357 22 767880 Email: info@kyprianou.com Web: www.kyprianou.com
1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods There are three main dispute resolution methods in Cyprus used to resolve commercial disputes: litiga- tion, arbitration and mediation. Litigation Commercial disputes are resolved at first instance before the District Courts of Cyprus. Decisions issued by the District Courts of Cyprus are binding and enforceable, notwithstanding the litigants’ right to an appeal. In addition, the District Courts may grant interim relief. For further details, see 2. Litigation . Arbitration Arbitration in Cyprus is regulated by the Arbitration Law, Cap 4 and the International Commercial Arbitra- tion Law of 1987 (Law 101/1987). Arbitral awards may be declared enforceable pursuant to an application to the District Court. For further details, see 3. Arbitra- tion and 9.2 Enforcement of Arbitral Awards . Mediation Mediation is regulated by the Certain Aspects of Medi- ation in Civil Matters Law (Law 159 (I)/2012), which applies to both domestic and cross-border disputes. Mediation is a voluntary process by which the parties mutually agree to appoint a neutral mediator to assist them in reaching a settlement. Although mediation is separate from litigation, the District Courts of Cyprus may, at any stage prior to the issuance of a judgment, invite parties who have initiated proceedings before them to attempt mediation as an alternative means of resolving their dispute.
1.2 Choice of Dispute Resolution Method Litigation remains the dominant method of resolving commercial disputes in Cyprus. However, arbitration has become increasingly popular due to its flexibility, the faster proceedings in comparison to litigation and the relatively easy way in which arbitral awards can be declared enforceable. In contrast, although mediation is an efficient and court-encouraged form of alterna- tive dispute resolution, it remains the least utilised of the three methods discussed above. Furthermore, litigation in Cyprus is typically used for domestic disputes as well as in cases where urgent interim remedies are required in aid of foreign judi- cial or arbitral proceedings. Arbitration is particularly prevalent in construction disputes and cross-border commercial transactions. As regards mediation, it is increasingly used as a voluntary and confidential pro- cess, particularly in disputes where the parties wish to preserve their business relationships or in cases where mediation has been encouraged by the courts. 1.3 Key Dispute Resolution Trends In Cyprus, commercial dispute resolution continues to develop, with a clear shift towards alternative dispute resolution methods alongside litigation. As mentioned, litigation remains the dominant method, particularly in domestic disputes and in cases requiring urgent inter- im remedies. However, the time-consuming nature of court proceedings have encouraged parties to explore alternative dispute resolution methods such as arbi- tration and mediation, which can provide faster and more cost-effective outcomes.
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