Cyprus updates

Arbitration & ADR

Contributed by George Z Georgiou & Associates LLC
District court reaffirms narrow scope of public policy argument against recognition of arbitral awards
  • Cyprus
  • 05 September 2019

In a recent Limassol District Court case, the applicants applied for the recognition and enforcement of a London Court of International Arbitration award, which the respondents argued was contrary to Cypriot public policy pursuant to the New York Convention. This case serves as a useful reminder that the courts will rarely resort to public policy grounds to refuse the recognition of an arbitral award unless presented with cogent evidence.

Court clarifies application of Article VI of New York Convention
  • Cyprus
  • 30 May 2019

In a recent Limassol District Court case, the applicants applied for the recognition and enforcement of an arbitral award issued by the Arbitration Institute of the Stockholm Chamber of Commerce. The case is one of the first examples of the judicial interpretation and application of Article VI of the New York Convention by the Cypriot courts and serves as a useful guide to the proper procedure to be followed by parties when invoking said article.

District court rejects public policy argument against recognition of arbitral award
  • Cyprus
  • 04 April 2019

A recent Limassol District Court decision serves as a useful reminder that the courts will rarely resort to public policy grounds for refusing the recognition of arbitral awards unless presented with cogent evidence. In addition, the courts are prepared to demonstrate the necessary flexibility dictated by modern commercial practices in examining the imperative requirements of Article IV of the New York Convention in a manner which will not hamper the convention's underlying objectives.

Nature of foreign arbitral award not altered despite judicial recognition by another EU member state
  • Cyprus
  • 07 February 2019

In a recent Limassol District Court case, the applicants applied to the court to set aside a Cypriot court order which had allowed the ex parte recognition and enforcement of a Dutch judgment pursuant to the EU Brussels Regulation or, alternatively, the recast EU Brussels Regulation. The applicants raised several arguments to support their application – in particular, the fact that the Netherlands judgment allowed for the registration and execution of the arbitral award only in the Netherlands.

Supreme Court dismisses appeal in Michaelides v Cooperative Bank of Pegia
  • Cyprus
  • 13 December 2018

The Supreme Court recently dismissed an appeal of a first-instance judgment which had applied the well-established principle that arbitral award registrations are a formality wherein district courts do not proceed to examine the merits or substance of the award. The Supreme Court rejected all of the appellant's arguments, dismissed the appeal in its entirety and endorsed the first-instance court's approach, which had been based on well-established case law.


Banking

What to keep in mind before entering into banking or finance transactions
  • Cyprus
  • 03 August 2018

No banking and finance transaction is the same. However, there are a number of considerations that financial institutions should keep in mind when negotiating the provision of loans and the entry into other financial arrangements. The proper structuring of a finance transaction ensures the due performance of its terms – especially in situations of default and, more specifically, the borrower's insolvency.

Launching an ICO through Cyprus – an overview
  • Cyprus
  • 10 November 2017

Unlike many other popular initial coin offering (ICO) jurisdictions, Cyprus is an EU member state and, as such, founders of ICOs must comply with the panoply of single market regulation. However, as they are largely unregulated at present, the benefits of launching an ICO in Cyprus can be significant. These include an EU base, a central time zone, access to Cyprus's vast array of tax treaties and white-list status among tax authorities globally.


Capital Markets

Registered alternative investment funds – an overview
  • Cyprus
  • 16 October 2018

Cyprus recently introduced a law which aims to modernise its investment fund legislative regime and allows for the establishment of a new type of investment vehicle: the registered alternative investment fund (RAIF). The RAIF is a hybrid legal creature that combines the elements of authorised and regulated funds without extensive bureaucracy or, more importantly, the need for an operating authorisation from the Cyprus Securities and Exchange Commission.


Company & Commercial

Contributed by Solsidus Law
Importance of certainty in agreements: can there be room for an agreement to agree?
  • Cyprus
  • 20 May 2019

The Contracts Law provides the legal framework for establishing legally valid and enforceable agreements in Cyprus. However, in real-life commercial situations, parties may not always achieve the certainty required to ensure that an agreement or contract term is valid and enforceable. The pressure associated with reaching an agreement often causes parties to defer important contract terms in order to close a deal at the expense of certainty and, ultimately, enforceability.

New simplified strike-off procedure comes into force
  • Cyprus
  • 18 March 2019

The provisions on the striking off of Cypriot companies set out in the Companies Law were recently amended to introduce a simplified process to reinstate a company which is struck off as a result of failure to file mandatory documents or to pay the annual levy to the registrar. The simplified process aims to enable companies that are struck off due to irregularity to be reinstated within two years, without having to resort to the courts

Directors' duties when launching ICOs
  • Cyprus
  • 06 August 2018

When an initial coin offering (ICO) is structured through a Cypriot company, directors' duties are highly relevant. The directors must approve the framework within which the ICO will be launched. While doing so, directors are legally required to protect the company's interests in line with their fiduciary duties. When directors also invest their own funds in an ICO, under Cypriot law, they must still maintain a conflict-free position.

Forced sale orders on grounds of unfair prejudice and oppression
  • Cyprus
  • 11 June 2018

Shareholder petitions of unfair prejudice have been compared to divorce petitions. Indeed, these shareholder disputes tend to carry the same level of acrimony, especially when courts are faced with the option of deciding the sale of one shareholder's shares to another. Fairness is at the heart of the courts' consideration when deciding cases of unfair prejudice and shareholder oppression.

Service of documents to companies with registered offices in Cyprus
  • Cyprus
  • 02 April 2018

Specific rules apply to the service of court and judicial documents and judgments issued by Cypriot or foreign courts in Cyprus. Among other things, companies must publish details of their registered offices with the Registrar of Companies upon incorporation and file a notification with the registrar within 14 days of any change of address. In addition, the private service of documents must be carried out by a Supreme Court-licensed private process server.


Corporate Finance/M&A

M&A opportunities in Cyprus post-Brexit
  • Cyprus
  • 27 February 2019

There has been a noticeable rise in foreign investments in Cyprus, with an upswing in mergers, acquisitions and joint ventures. This has been the result of various reforms and legislative amendments that have added legal certainty and contributed to the creation of a coherent statutory framework. International investors might well consider these factors when assessing Cyprus as an investment hub for future transactions in the M&A market post-Brexit.

Mergers and reorganisations – an overview
  • Cyprus
  • 23 January 2019

Cyprus boasts an attractive merger and reorganisation regime not only locally (ie, between Cyprus entities), but also at an EU level. Besides the well-known advantages of merging two companies (eg, the transfer of assets and liabilities without the need for the novation of contracts or other cumbersome procedures), mergers and reorganisations in Cyprus are also attractive from a tax perspective, as those which fall within the scope of the law may result in a total tax exemption in Cyprus.

Financing through shadow banking – what to look out for
  • Cyprus
  • 02 May 2018

Cyprus is a popular jurisdiction for establishing special purpose vehicles with an increased involvement in shadow banking, which takes the form of, among other things, securities lending, repurchase and derivatives transactions. This has resulted in a call for strengthened regulations to mitigate risks and support financial stability. Newly introduced regulations now bring non-financial counterparties, such as limited liability companies, into the ambit of transparency reporting.