CYPRUS Law and Practice Contributed by: Kyriacos Scordis and Sofi Mylona, SCORDIS PAPAPETROU & Co LLC
7. Enforcement of Law and Jurisdiction and Arbitration Clauses 7.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading Cyprus courts will generally recognise and enforce a jurisdiction clause stated in a bill of lading. However, they may still consider whether there are adequate grounds for displacing the prima facie presumption of insisting on the parties honouring their bargain. This presumption may be rebutted for “good and sufficient reasons”. In relation to jurisdiction clauses, the Cyprus courts will take the following factors into consideration: • the country in which the evidence on the matters in dispute is situated or readily available; • the relevant benefits of each alternative jurisdiction in terms of facilitating a better trial at less cost; • to what extent the foreign law applies to the mat - ters in dispute and, if this is the case, to what extent it is substantially different from Cyprus law; • the country to which each of the parties is linked and how close this connection is; • whether the defendant sincerely wishes the issue in question to be tried somewhere else or whether they are just seeking a procedural advantage; and • to what extent the plaintiffs will be prejudiced in the case of filing proceedings abroad. As a general rule, an express choice of law by the contracting parties will be recognised and upheld by the Cyprus courts. On 20 April 2006, Cyprus ratified the Rome Convention by Law 15 (III) of 2006, and Regulation (EC) No 593/2008 (“Rome I”) has applied since 17 December 2009. In accordance with Article 5 of Rome I, in the absence of an express or implied choice of law, the proper law shall be the law of the country of habitual residence of the carrier, provided that the place of receipt, the place of delivery or the habitual residence of the consignor is also situated in that country. If those requirements are not met, the law of the country where the place of delivery (as agreed by the parties) is situated shall apply.
7.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading General words in a bill of lading incorporating into it all the terms and conditions of another document (such as a charterparty) may not be sufficient to incorpo - rate an arbitration clause contained in that document into the bill of lading such as to make its provisions applicable to disputes arising under the bill of lading. However, if a bill of lading contains specific words that attempt to incorporate an arbitration clause of, for example, a charterparty, the Cyprus courts may recognise and enforce the arbitration clause if the provisions in the charterparty are worded in such a manner as to make sense in the context of the bill of lading, and if they do not conflict with any express term contained in the bill of lading. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Cyprus has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Law No 84/1979) (the “New York Conven - tion”). Upon its accession to the New York Convention on 29 December 1980, Cyprus made a specific reservation of reciprocity: “The Republic of Cyprus will apply the Convention, on the basis of reciprocity, to the recognition and enforcement of awards made only in the territory of another Contracting State; furthermore, it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under its national law.” Domestic arbitration proceedings in Cyprus are gov - erned by the Arbitration Law of 1944, Chapter 4, and international arbitration proceedings are governed by the International Arbitration in Commercial Matters Law 101/1987, which is almost identical to the UNCI - TRAL Model Law. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction Although a foreign jurisdiction clause does not deprive the Cyprus courts of their jurisdiction, strong reasons
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