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04 January 2019
Cyprus offers an attractive alternative to court-sanctioned debt restructurings through the reduction of the statutory majority necessary for approving a scheme of arrangement.
Recent statutory amendments in this regard have:
Following the approval of a scheme of arrangement by the required statutory majority, the arrangement may be brought before a judge for approval, upon which it becomes binding on all parties involved.
Decisions and rulings of Cyprus courts are generally recognisable and enforceable in the European Union, China, Russia, Belarus, Ukraine, Georgia, Switzerland, Norway, Iceland, Denmark and Serbia, which makes Cyprus an attractive jurisdiction for pursuing global restructurings.
Recent statutory enactments have:
The procedure for pursuing a scheme of arrangement is governed by Sections 198 to 201 of the Company Law (Cap 113).
A scheme of arrangement may be pursued by:
Pursuing a scheme of arrangement entails the following four-step procedure:
In considering a scheme of arrangement, Cyprus courts will follow the guidance offered by decisions in other common law jurisdictions, including England, Singapore and Hong Kong, which are directly applicable in Cyprus through Section 29(c) of the Court of Justice Law (14/1960). This provides the proceedings with certainty and expertise.
The wide range of bilateral and multilateral treaties enjoyed by Cyprus means that decisions and rulings of the Cyprus courts are generally enforceable throughout the European Union, China, Russia, Belarus, Ukraine, Georgia, Switzerland, Norway, Iceland, Denmark and Serbia. This reinforces the court-approved arrangement with the required cross-border enforcement and implementation tools.
Pursuing a scheme of arrangement in appropriate circumstances has advantages over the alternative insolvency procedures of examinership or liquidation, including:
For further information on this topic please contact Andreas Erotocritou or Alexis Erotocritou at AG Erotocritou LLC by telephone (+357 25 370 101) or email (firstname.lastname@example.org or email@example.com). The AG Erotocritou LLC website can be accessed at www.erotocritou.com.
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