Green Light For Cyprus Commercial And Admiralty Courts

On 12 May 2022 the Cypriot Parliament voted in favour of the establishment of two independent courts of first instance, namely a Commercial Court and an Admiralty Court, by passing Law (108/2019) on the Establishment and Functioning of a Commercial and Admiralty Court (‘the Law’). The 44 to 7 vote is expected to partly decongest the Cypriot justice system (whether through transfer of pending cases or registration of fresh claims in the new courts) and could not come at a better time, given Cyprus was recently ranked last amongst EU Member States in speed of administration of justice.

The Law was not without controversy, which principally focused on its provision for the official use of the English language in both courts. Specifically, under Articles 15 and 29 of the Law, a judge may, on petition of one of the parties and when deemed in the interest of justice, allow for submission of court documents in English, thus determining the English language as the language of the court proceedings and the judgment. This provision necessitates an amendment of Article 3 of the Constitution under which Greek and Turkish are the only official languages of the Republic, which was approved by Parliament at an earlier session following opposition by certain political parties. English has not featured officially in proceedings since Cypriot independence from the United Kingdom and following a grace period for the translation of laws of the Republic.

Commercial Court

The Commercial Court shall consist of 5 judges who must possess wide knowledge on commercial disputes and/or proven experience in cases which fall under the jurisdiction of the Commercial Court, as well as very good knowledge of the English language.

Under Article 3 of the Law the Commercial Court shall have non-exclusive jurisdiction to hear:

  • commercial disputes over €2,000.000;
  • disputes of any amount pertaining to arbitration, intellectual property, and competition law.

Commercial dispute is defined under Article 2 and includes:

  • commercial documents or contracts;
  • purchase, sale or export of goods;
  • transport of goods via land, air or pipeline;
  • exploitation of oil, natural gas or other resources;
  • insurance and reinsurance;
  • market operation or transfer of shares, credit, and investments;
  • services, excluding medical services and/or services pertaining to an employment contract;
  • vehicle manufacturing;
  • agency;
  • competition;
  • disputes over entities supervised by the Republic;
  • intellectual property; and arbitration.

Jurisdiction is established where:

  • the cause of action occurs within the district of the court;
  • the defendant resides or exercises their profession or in case of a legal entity has its registered office or base of operation within the district of the court;
  • the parties decide so in writing, and any of the parties resides or exercises their profession or in case of a legal entity has its registered office or base of operation outside the Republic; and
  • jurisdiction is established via European Law, international treaties, or Private International Law.

Any of the parties whose case is pending and falls within the jurisdiction of the Commercial Court may apply either to the District Court or the Commercial Court for the case to be transferred to the latter, where the hearing is yet to commence. On the flip side, a Commercial Court judge may transfer a case to the District Court where the provisions of the Law are not met, and/or on petition of one of the parties if deemed more appropriate.

Admiralty Court

Unlike the Commercial Court, under Article 18 the new Admiralty Court is given exclusive jurisdiction to hear and decide at first instance maritime claims of any amount. A maritime claim is defined in Article 2 and includes:

  • ownership or possession of a vessel;
  • disputes between co-owners over profits, possession, or employment;
  • enforcement of a claim over damages, loss of life or physical injury following collisions or breach of COLREGS;
  • limitation of liability;
  • mortgages or liens;
  • vessel damage (to or from the vessel);
  • loss of life or physical injury due to negligence, omission or illegality;
  • loss or damage of property in transport;
  • contractual disputes over transport of goods or charterparties;
  • salvage;
  • towage or pilotage;
  • goods or materials supplied to the ship for operation;
  • ship building, repair, equipment, berth charges or other charges;
  • crew employment;
  • vessel expenditures;
  • general average;
  • ship loans; and
  • ship arrest.

The Admiralty Court shall consist of 2 judges who must meet analogous criteria to the Commercial Court judges. Article 19 caters for both actions in personam as well as in rem where appropriate. Under article 27 the Admiralty Court shall have jurisdiction to decide at first instance any maritime claim under the Law, EU Law, Private International Law, an agreement between the parties or any other law irrespective of:

  • whether a vessel is under Cypriot ownership or registered under the Cyprus flag;
  • the place of permanent residence, professional practice, or in case of a legal entity the place of the registered office or base of operations;
  • the place where the claim arises; and
  • in case of mortgages or other incumbrances, whether these are registered in Cyprus.

A judgment of either the Commercial or Admiralty Court may be appealed under Articles 16 and 30 respectively in the Cyprus Supreme Court, while the Supreme Court is not bound by findings of fact and may hear further evidence where and when deemed necessary.

The Law comes to force on publication in the Government Gazette, however Article 32 stipulates the transfer of jurisdiction to the newly established courts commences only upon notification from the Supreme Court in the Government Gazette that the Commercial and Admiralty Courts are ready to function. The date remains to be announced.

Author: Ioannis Generalis

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