CYPRUS Trends and Developments Contributed by: Constantinos A Adamides, Scordis, Papapetrou & Co LLC
overseas corporation exercises over the running of the business conducted by the representa- tive; (f) whether the representative reserves (i) part of his accommodation, (ii) part of his staff for conducting business related to the overseas corporation; (g) whether the representative dis- plays the overseas corporation’s name at his premises or on his stationery, and if so, whether he does so in such a way as to indicate that he is a representative of the overseas corporation; (h) what business, if any, the representative trans- acts as principal exclusively on his own behalf; (i) whether the representative makes contracts with customers or other third parties in the name of the overseas corporation, or otherwise in such manner as to bind it; (j) if so, whether the repre- sentative requires specific authority in advance before binding the overseas corporation to con- tractual obligations. This list of questions is not exhaustive, and the answer to none of them is necessarily conclu- sive. If the judge, ante, p. 476B-C, was intend- ing to say that in any case, other than a branch office case, the presence of the overseas com- pany can never be established unless the rep- resentative has authority to contract on behalf of and bind the principal, we would regard this proposition as too widely stated. We accept Mr Morison’s submission to this effect. Every case of this character is likely to involve “a nice exami- nation of all the facts, and inferences must be drawn from a number of facts adjusted together and contrasted:” La Bourgogne [1899] P. 1, 18, per Collins L.J. Nevertheless, we agree with the general princi- ple stated thus by Pearson J. in F. & K. Jabbour v. Custodian of Israeli Absentee Property [1954] 1 W.L.R. 139, 146:
‘A corporation resides in a country if it carries on business there at a fixed place of business, and, in the case of an agency, the principal test to be applied in determining whether the corpo- ration is carrying on business at the agency is to ascertain whether the agent has authority to enter into contracts on behalf of the corporation without submitting them to the corporation for approval …’ On the authorities, the presence or absence of such authority is clearly regarded as being of great importance one way or the other. A fortiori the fact that a representative, whether with or without prior approval, never makes contracts in the name of the overseas corporation or oth- erwise in such manner as to bind it must be a powerful factor pointing against the presence of the overseas corporation.” As the Court further pointed out, reference to Adams and also to part of the above passage from Dicey is made in the judgment of the Hon- orable President T. Th. Economou, P.D.C (as he then was) in (the first instance judgment in) VTB Bank (Open Joint – Stock Company) v Taruta Sergey Aleksevevich et al, General Application No 378/14, 27 June 2014, where it becomes clear that the presence of a foreign [company] in the Republic of Cyprus is determined on the basis of the above principles. In particular, with reference to Adams, the Honorable President T. Th. Economou, P.D.C (as he then was) said: “The English Court of Appeal has exhaustively reviewed the relevant case law and has come to identify a large number of factors which must be taken into account. From this point of view, no one disputes that if the issue is raised properly, it may be a question of fact that will be decided in the context of the hearing on the merits.”
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