CYPRUS Law and Practice Contributed by: Agathi Zervou and Maya Athanatou, George Z. Georgiou & Associates LLC
otherwise desirable in the interests of justice. In such cases, the grant of relief is typically conditional upon the claimant undertaking to issue proceedings if they have not already done so. 1.7 Prevention of Defendants Dissipating or Secreting Assets A party may apply for an interim injunction to prevent a defendant from disposing of or otherwise dealing with their assets to ensure that the defendant does not hide, transfer or dissipate assets in a manner that would render them effectively judgment-proof. A range of interim measures is available, depending on the circumstances of the case. The CPR have, to some extent, codified the court’s power to grant sev - eral types of orders in CPR Part 25. These include: • freezing orders (including worldwide freezing orders), which are commonly granted where there is a real risk of dissipation of assets, whether mov - able or immovable, located in Cyprus or abroad; • disclosure orders, often granted ancillary to freez - ing orders, requiring the respondent to disclose details of their assets; • appointment of a receiver, where the court consid - ers it necessary to manage, preserve or realise assets; and • an order for the detention, custody or preservation of relevant property. Interim measures may apply to both tangible and intangible assets, wherever located, and extend to assets held directly or indirectly, including those ben - eficially owned. Freezing orders operate in personam, intending to bind the individual rather than the asset itself, and may have worldwide effect. They typically include excep - tions, such as for reasonable living expenses, legal costs and ordinary business activities. Pursuant to Article 32 of the Courts Law 14/60, interim relief will be granted where: • there is a serious question to be tried; • there appears to be a probability that the plaintiff is entitled to relief; and
• unless the interim order is issued, it would be dif- ficult or impossible to ensure complete justice at a later stage. The claimant must further demonstrate that there is a real risk of dissipation of assets, such that any judgment obtained may go unsatisfied. This does not require proof that dissipation is likely, but rather that there is a genuine risk supported by objective evi - dence, and not merely by speculation. The court will also consider whether the grant of such relief would be just and convenient under the circum - stances of each case. Where an application is made without notice, the applicant is subject to a duty of full and frank dis - closure, requiring them to present all material facts, including those adverse to their case. Furthermore, a cross-undertaking in damages is gen - erally required. The applicant must undertake to com - pensate the respondent for any loss suffered if it is later determined that the order was wrongly granted, subject to the court’s discretion in the circumstances. Such undertakings may be secured through a bank guarantee or payment into court. Sanctions for non-compliance are also significant. All interim orders contain a penal notice warning that breach may result in contempt of court. If the court finds such contempt, it may order the payment of a fine, confiscation of assets or potentially imprison - ment. In addition, any third party served with an order must not assist in its breach or deliberately frustrate its purpose, as they may also be held in contempt.
2. Procedures and Trials 2.1 Disclosure of Defendants’ Assets
Ancillary disclosure orders are commonly granted in support of freezing orders to ensure their practical effectiveness. These require the respondent to dis - close details of their assets and are usually defined broadly to extend beyond assets held in the respond - ent’s own name, so as to include assets beneficially owned or otherwise directly or indirectly controlled
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