Shipping 2026

CYPRUS Law and Practice Contributed by: Kyriacos Scordis and Sofi Mylona, SCORDIS PAPAPETROU & Co LLC

Court thinks fit, make an order prohibiting any dealing with the ship or any shares therein for a specified time. A vessel may also be detained by Cyprus competent authorities for breaches under various international maritime conventions or local laws (eg, the Merchant Shipping (Port State Control) Laws of 2011 and 2015). 5.9 Releasing an Arrested Vessel Pursuant to the Cyprus Admiralty Jurisdiction Order of 1893, the court may, by order and upon a written application, direct the release of the arrested vessel upon such terms relating to security as it deems fit. Therefore, the owner or interested party has to apply to the court for the release of the arrested vessel. The form of security usually requested by the court is a bank guarantee issued by a licensed financial institu - tion in Cyprus. Unless the arresting party consents, it is unlikely that the court will accept a club Letter of Indemnity (LOI) or a foreign bank’s guarantee. 5.10 Procedure for the Judicial Sale of Arrested Ships Pursuant to Rule 74 of the Cyprus Admiralty Jurisdic - tion Order of 1893, the Supreme Court can appoint the Admiralty Marshal of the Court or any other person to appraise the arrested vessel or to sell that ves - sel, either with or without appraisement, either before judgment (pendente lite) or after final judgment, on the application of any party and by its order. The sale may be ordered to be by public auction (the sale procedure adopted in most cases) or by private treaty. The latter is typically allowed when it serves the best interests of all interested parties and is a more favourable out - come than a public auction – for example, in cases where a higher price can be achieved through private negotiations compared to a public auction. The sale is advertised in the local press and in appro - priate shipping publications. The proceeds from the sale of a ship are paid into the court and, upon an application by any judgment creditor, will be distrib - uted to all judgment creditors who claimed a share of the proceeds, in order of priority. Whenever an arrest order is issued by the Supreme Court, the arrested vessel is placed under the safe

custody and supervision of the Admiralty Marshal and/ or the Deputy Admiralty Marshal(s), who are appointed pursuant to Rule 5 of the Cyprus Admiralty Jurisdic - tion Order of 1893 (in practice, the Court appoints the Admiralty Marshal in almost all cases). The Admiralty Marshal acts as the custodian/bailee of the arrested vessel, with the duty to ensure that the property and crew of the vessel are safe and in good condition or health at all times (and to comply with the relevant orders issued by the Court in the course of the legal proceedings from which the arrest order originates). The ordinary order of priority of claims is as follows: • Marshal expenses in connection with the arrest, custody and sale; • recoverable legal costs of the arresting party (up to and including the arrest) and the party who obtained the order for the appraisement and judi - cial sale; • possessory liens; • maritime liens; • claims of the Republic of Cyprus for fees, dues and tonnage taxes, in the case of a Cyprus-flag vessel; • claims under registered mortgages; • claims under foreign or unregistered mortgages; • administrative fines imposed by the competent authorities of Cyprus; and • other maritime claims. 5.11 Insolvency Laws Applied by Maritime Courts The Companies Law, Cap 113, as amended (the “Law”), contains proactive self-help provisions afford - ed to companies, similar to US Chapter 11 protection. It is a process whereby the protection of the court is obtained to assist the survival of the company, and essentially allows a company to restructure with the approval of the court. Upon a request being submitted to it, the court may appoint an examiner to assess the state of affairs of the company and to perform such duties in relation to the company as may be imposed by or in accordance with the provisions of the Law, if: • the court considers that a company is, or is likely to be, unable to pay its debts;

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