CYPRUS Law and Practice Contributed by: Agathi Zervou and Maya Athanatou, George Z. Georgiou & Associates LLC
for its transfer. If the bribe has been used to acquire other property, the principal may trace into that prop - erty and claim it. The principal may seek perpetual injunctions to restrain the agent from dissipating the bribe or assets acquired with it. 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts Claims against third parties who assist or facilitate the fraudulent acts of another in Cyprus are primar - ily based on common law and equitable principles, closely aligned with English law. One of the main causes of action is dishonest assis - tance. This arises where a third party assists in a breach of trust or fiduciary duty in a dishonest manner. To succeed, the claimant must show the existence of a fiduciary relationship, a breach of that duty and that the defendant assisted in the breach while acting dishonestly. A person will be considered dishonest if, based on what they actually knew at the time, their conduct would be regarded as dishonest by ordinary standards. It is not necessary to prove that the defendant knew all the details of the fraud. It is sufficient that they were aware that something improper was taking place. This includes situations where the defendant deliberately ignored obvious signs of wrongdoing or chose not to make enquiries, a behaviour commonly referred to as blind-eye knowledge. Another key claim is knowing receipt, which arises where a third party knowingly receives assets or pro - ceeds that have been misappropriated in breach of trust or fiduciary duty. Liability may also be established through conspiracy. This encompasses both unlawful means conspiracy – which involves the use of unlawful acts as analysed previously – and lawful means conspiracy, a more exceptional basis for liability that requires a higher threshold to be met. Under lawful means conspiracy, liability may arise even where the constituent acts are themselves lawful, provided that two or more persons combine with the predominant purpose of causing
harm to the claimant. Crucially, the intention to injure must constitute the main or dominant purpose of the agreement, rather than being merely an incidental consequence. While lawful means conspiracy is less commonly invoked than its unlawful counterpart, it remains potentially relevant in fraud cases where the evidence demonstrates a co-ordinated course of conduct directed primarily at injuring the claimant. 1.4 Limitation Periods The limitation period for bringing a fraud claim in Cyprus is generally six years. However, where the claim involves fraud or where there is deliberate con - cealment of any fact related to the cause of action, time begins to run only from the date on which the claimant discovered the fraud or could reasonably have discovered it through the exercise of due dili - gence. It should also be noted that a stricter limitation period applies in the context of international trusts. In par - ticular, any action brought against a trustee of an inter - national trust on the basis that the trust was estab- lished with intent to defraud creditors must be initiated within two years from the date of the transfer of the assets into the trust. 1.5 Proprietary Claims Against Property Proprietary remedies are available in Cyprus where a fiduciary has acted in breach of their obligations, enti - tling the claimant to a declaration that the defendant holds the asset on constructive trust for their benefit, and for an order requesting the defendant to transfer the asset to the claimant. The Cyprus legal system recognises these equita - ble principles as part of its common law tradition. A constructive trust is an ever-expanding concept, designed to keep the hands of the court free, to meet the demands of justice and good conscience. Cyprus courts have clarified the distinction between resulting and constructive trusts. In Christoforou v Christoforou (1998) 1 A.A.D. 1551, the court explained that both are created by operation of law, but resulting trusts arise primarily on the basis of intention presumed from the circumstances of each case, whereas construc -
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