CYPRUS Law and Practice Contributed by: Kyriacos Scordis and Sofi Mylona, SCORDIS PAPAPETROU & Co LLC
tion ), and international conflict is a typical exam - ple of when such a situation may arise (eg, due to blockades to the Suez Canal or attacks on shipping in the Red Sea). Insurance contracts are particularly affected by international conflicts such as the war in Ukraine or Houthi attacks on vessels, as war risk insur - ance policies often contain express provisions that deal with damage, loss or delay caused by acts of war. As such, they may carve out the relevant risk or, at an additional cost, cover (or exclude, as the case may be) operating in war zones or high-risk areas, as well as correspond - ing risks such as: • attacks on vessels, hijacking or piracy; • damage caused by military actions (eg, air - strikes, naval attacks); and • delays, loss of or damage (eg, in the case of perishable goods) to cargo in transit through affected regions. In addition, delays or failure to deliver goods on time due to international conflicts, such as blocked trade routes or attacks on vessels, can lead to disputes over late or non-delivery . In cas - es where a shipping contract specifies delivery times, any delay in delivery (whether caused by conflict or other factors) may constitute a breach of contract, unless the delay is excused by force majeure or frustration and the contract contains relevant provisions. Irrespective of the right of a shipper or consignee to claim damages for the late delivery of goods, which could include financial losses, lost market opportunities, or any inconvenience caused by the delay, under Cyprus law, the innocent party (typically the shipper/consignee) has a duty to mitigate their losses. Thus, even if the delay is
• Section 3(1) designates the competent authorities for securing the implementation of Sanctions/Restrictive Measures in Cyprus, and these are defined in accordance with the provisions of Section 59 of the Prevention and Suppression of Money-Laundering Activi - ties Laws of 2007; • Section 4 provides for strict penalties for non-compliance (including the possibility of imprisonment and criminal prosecution); and • Section 6 provides for the transmission of data/information to the police, when a com - petent authority ascertains that a person commits any act in violation of Sanctions and Restrictive Measures. In addition, the increasing scope of EU sanctions on Russia is having an impact on all sectors of EU economic activity, including shipping. The EU recently adopted the 15th package of sanc - tions against Russia, which includes general provisions dealing with Russia’s shadow fleet, sanctions circumvention, and substantial indi - vidual and entity listings. Apart from the foregoing, Cyprus has no legal obligation to follow other countries’ sanctions, although many shipping companies do abide by such sanctions. 8.4 International Conflict(s) Ongoing international conflicts, including the war in Ukraine and other regional tensions, can indeed have significant legal and commercial implications for Cyprus law shipping and car - riage contracts. These implications involve issues of frustration of contracts, war risk insur - ance coverage, late or non-delivery of goods, and deterioration of goods due to late delivery. Examples of what amounts to frustration of con - tract under Cyprus law have been discussed previously (see 8.1 Force Majeure and Frustra-
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