The legal system of Cyprus is primarily based on common law with the exception of certain areas, eg, administrative and family law which are based on civil law.

Generally, the legal process in Cyprus is adversarial and involves a combination of both written submissions and oral argument.

Cyprus has a unified state court system.

As from 2022, following a series of major reforms, Cyprus has enacted a three-tier court system. The first tier is made up by the District Courts which have jurisdiction to hear and try at first instance all civil and criminal cases with the exception of cases falling within the jurisdiction of the courts of specialised jurisdiction, namely the Assize Courts (which try serious criminal cases), the Employment Disputes Courts, the Rent Control Courts and the Family Courts. A Commercial Court and an Admiralty Court have been established by statute in 2022 but have not yet begun to try cases as the process of appointing the judges who will serve on these courts has not been concluded. In addition, there is a first instance Administrative Court which has exclusive jurisdiction to try recourses against administrative acts of the state, its organs and other public bodies, an International Protection Administrative Court which primarily tries applications by persons seeking political asylum in Cyprus and a Military Court which has jurisdiction to try offenses committed by members of the armed services.

The second tier is made up of the newly established Court of Appeal, which has been hearing appeals since 1 July 2023 and has criminal, civil and administrative law divisions.

The third tier is made up of two separate courts, namely the Supreme Constitutional Court and the (new) Supreme Court. The Supreme Constitutional Court is comprised of nine judges and has jurisdiction to rule on the constitutionality of proposed legislation upon the application of the President of the Republic, to resolve conflicts between institutions and to try at third and final instance appeals against judgments of the Court of Appeal on administrative law matters which raise novel legal issues of wider public importance or with respect to which there are conflicting judgments of the Court of Appeal. The (new) Supreme Court is comprised of seven judges and has jurisdiction to try at third and final instance appeals against judgments of the Court of Appeal on civil and criminal law matters which raise novel legal issues of wider public importance or with respect to which there are conflicting judgments of the Court of Appeal as well as exclusive jurisdiction to issue prerogative writs (habeas corpus, certiorari, prohibition, mandamus and quo warranto). 

The length of time between commencement of proceedings and trial varies considerably depending, inter alia, on the nature of the proceedings, the District Court in which the proceedings are commenced and the workload of the particular judge to whom the proceedings are assigned. The level of backlogs in litigious civil and commercial cases is quite high and often results in serious delays in the processing of cases. On average the period between commencement of proceedings and trial at first instance is currently around five years.

One of the main aims of the recent overhaul of the Cypriot court system, which includes, among other things, the introduction of the New Civil Procedure Rules, the establishment of new specialised courts, the introduction of measures to deal with “backlog” cases and the introduction of an electronic filing and case management system, is to deal with the perennial problem of delays in the processing of civil and commercial cases. It is hoped and expected that these measures in combination with the determined efforts to promote a radical change in litigation culture will gradually lead to a significant reduction of the length of time between commencement of proceedings and trial.

Article 30 of the Constitution of the Republic of Cyprus, which entrenches the right of every person to a public hearing, provides that the public may be excluded from all or any part of court proceedings upon a decision of the court where it is in the interest of the security of the Republic, the constitutional order, public order, the public safety or public morals, or where the interests of juveniles or the protection of the private life of the parties so require as well as in special circumstances where, in the opinion of the court, publicity would prejudice the interests of justice.

Documents filed at court are not available to the public and are generally only available to the parties to the proceedings. However, a third party may apply to the court for permission to inspect the court’s file of particular civil proceedings and obtain copies of documents and may be granted such permission, on such terms as the court deems fit, upon showing a legitimate interest.

Legal representatives may appear before the courts of Cyprus only if they have completed a 12-month pupillage at the office of an advocate or at the office of the Attorney General of the Republic of Cyprus, and are duly registered members of the Cyprus Bar Association.

Lawyers from other EU member states have the right to appear before the courts of Cyprus provided that they (i) are duly registered as EU lawyers in Cyprus and (ii) appear jointly with a Cyprus-qualified lawyer.

Lawyers from other countries may be permitted to represent clients in Cyprus on an ad hoc basis upon obtaining special permission from the Cyprus Bar Association and subject to acting jointly with a Cyprus-qualified lawyer.

It is unclear whether third-party litigation funding is permitted in Cyprus as there is no specific legislation governing the issue and this matter has not been determined conclusively by the Cypriot courts. There is only one first instance decision where the court, taking into account that there is no legislative provision prohibiting third-party litigation funding in Cyprus, decided that third-party litigation funding is not contrary to public policy.   

There are no provisions limiting the availability of third-party funding to specific lawsuits.

There are no provisions limiting the availability of third-party funding to the claimant.

Given that there are no provisions governing third-party funding, there are no minimum or maximum amounts that a third-party funder may fund.

There are no provisions limiting the types of costs which a third-party funder may fund.

Contingency fees are not permitted in Cyprus.

There is no legislative provision limiting the period within which a party to the litigation should obtain third-party funding.

The new Civil Procedure Rules (CPR), which entered into force in 2023, provide for certain “Pre-action Protocols” which are generally required to be followed in all types of claims before legal proceedings are commenced, with special rules applying to specific types of claims, namely:

• Protocol I (Type I) concerning claims for a liquidated sum;
• Protocol II (Type II) in relation to claims arising from road traffic accidents and personal injury claims; and
• Protocol III in relation to cases which are not covered by any other protocol

The Civil Procedure Rules have also introduced a general requirement for the parties to follow a “reasonable procedure” before commencing legal proceedings with a view to avoiding litigation.

The claimant is required to send a demand letter in accordance with the respective form provided by the CPR setting out the nature and factual basis of the potential claim together with any key documents. The prospective defendant is required to respond within the specific deadline and inform the claimant whether the claim is accepted or not. If the claim is not accepted, the prospective defendant should set out the detailed reasons for such rejection and provide copies of any documents on which the respondent wishes to rely upon.

A party’s failure to comply with the relevant pre-action conduct requirements is taken into account by the court in providing case management directions and in awarding costs, the general idea being that the non-complying party will normally be ordered to pay the costs relating to any steps taken or required to be taken as a result of the non-compliance.

The Limitation of Actions Law of 2012 (Law 66(I)/2012) (the “Limitation Law”) provides for different limitation periods depending on the nature of the claim. The general limitation period for claims founded in tort or contract is six years, although shorter limitation periods apply in respect of specific torts, such as:

• defamation (one year);
• malicious falsehood (one year);
• negligence (three years);
• nuisance (three years); and
• breach of statutory duty (three years).

The courts have the power to extend the prescribed limitation periods by up to two years if they consider this to be just and reasonable in the circumstances, subject to the proviso that no claim can be brought after the expiration of ten years from the date on which the relevant cause of action is completed. In general, the prescribed limitation periods begin to run from the time the cause of action is completed or from 1 January 2016, whichever time is latest. The Limitation Law also contains provisions regarding the circumstances in which the running of the prescribed limitation periods may be postponed or suspended as well as transitional provisions with respect to causes of actions based on facts occurring before 1 July 2012 when the Limitation Law entered into force. It should be noted that the provisions of the Limitation Law do not affect the limitation periods in respect of specific types of claims that are prescribed in other statutes, such as the statutes governing liability for defective products, the administration of estates and the specific performance of contracts for the sale of land.

If a claim before a Cypriot court is directed against a defendant not domiciled in Cyprus or has other “foreign elements” (eg, if the facts giving rise to the dispute occurred outside Cyprus), the court will determine whether it has jurisdiction over the claim by applying either the provisions of the Recast Brussels I Regulation (Regulation (EU) No 1215/2012) or the national rules concerning jurisdiction. Most commercial disputes fall within the scope of application of the Brussels I Regulation. Generally, the determining factor of jurisdiction under the Brussels I regime is the domicile of the defendant. As a general rule, the court will have jurisdiction where the defendant is domiciled in Cyprus, subject to the provisions of the Recast Brussels I Regulation regarding exclusive jurisdiction, prorogation of jurisdiction and lis pendens. If the defendant is not domiciled in Cyprus the court may have jurisdiction over the claim pursuant to the provisions of the Recast Brussels I Regulation regarding exclusive jurisdiction (eg, if the claim concerns immovable property located in Cyprus, or the validity of a decision of the directors or the shareholders of a Cypriot company), special jurisdiction (eg, if the claim concerns a civil wrong committed in Cyprus or a contractual obligation performed or due to be performed in Cyprus) and prorogation of jurisdiction (eg, if the parties agreed that their dispute would be subject to the jurisdiction of the Cypriot courts).

In summary, the national rules concerning jurisdiction permit a Cypriot court to assume jurisdiction over a claim directed against a defendant not domiciled in Cyprus or having other “foreign elements” if the writ of summons is served on the defendant in Cyprus, if the defendant submits to the jurisdiction of the Cypriot court or (in respect of claims directed against defendants not domiciled in Cyprus) if the conditions set out in the Civil Procedure Rules for the granting of permission to serve the claim out of the jurisdiction are satisfied (generally these require a connection with Cyprus). Under the national rules, the court has a discretion to stay a claim over which it has jurisdiction if it is satisfied that the courts of another state are “clearly and distinctly” a more appropriate forum for the trial of the action. If the Cypriot courts have jurisdiction over a claim, the question of which specific District Court has jurisdiction is determined with reference to the provisions of the Courts of Justice Law of 1960 regarding territorial jurisdiction.

Under the CPR claims are generally commenced by means of a “Part 7 Claim Form”. By way of exception, a “Part 8 Claim Form” may be used in cases where the facts are not expected to be disputed and/or where the proceedings are required by law to be commenced by originating summons, petition or some other form of originating document.

A claim form can be amended at any time before it is served on the defendant(s). If the claim form is served on the defendant(s) then it can be amended only with the consent of the parties or with the leave of the court.

Under the CPR a claim form is required to be served on every defendant, subject to the power of the court to dispense with service in exceptional circumstances. The general rule is that the claim form may be served within the jurisdiction by such method as the parties may have agreed in writing. If there is no written agreement between the parties, service of the claim form is effected by licensed private process-servers instructed by the claimant(s). In the case of a natural person, service of the claim form should normally be personal or on any person over 16 years old which is a member of the family and was in the town at the time of service or is responsible at the defendant’s place of work. In the case of a legal person and in the absence of any other specific legislative provision, service of the claim form should be effected on one of the company’s officers or at the registered office or at the place of business on a person authorised to accept such service. 

As regards service of a claim form outside the jurisdiction, the leave of the court to serve out of the jurisdiction is not required in cases where the Recast Brussels I Regulation or the Service Regulation (Regulation (EU) No 2020/1784) are applicable. In all other cases, the permission of the court to serve out of the jurisdiction is required and the court may grant such leave if one of the conditions set out in the CPR for the granting of permission to serve the claim out of the jurisdiction are satisfied, ie, if the claim:

• is brought with respect to a breach of contract committed within the jurisdiction;
• is brought with respect to a civil wrong and the damage has occurred/will occur within the jurisdiction or arises out of an act committed/likely to be committed within the jurisdiction;
• is made for interim relief which the Cypriot court has jurisdiction to grant under the applicable law;
• is made for the registration and/or enforcement of a judgment or arbitral award;
• is brought in relation to a trust governed by Cypriot law; or
• relates wholly or mainly to immovable property situated in Cyprus.

If the court considers that service via one of the regular methods described above cannot be effected in a timely manner, it may grant any order permitting substituted service as it may deem just and proper including service through fax or email or publications in any electronic means. The extent to which the court’s power to permit substituted service may be affected by the provisions of applicable bilateral or multilateral treaties or conventions regulating the service of judicial documents.

In the event of default of appearance, the claimant may secure, upon filing an application, a judgment against a defendant who failed to respond to a claim commenced with “Part 7 Claim Form” by filing a Memorandum of Appearance within 14 days from the date of service of the claim form (if the Statement of Claim is filed together with the claim form) or from the date of service of the Statement of Claim. The application for judgment in default of appearance can be made ex parte.

In the event of default of defence, the claimant may secure, upon filing an application, a judgment against a defendant who failed to file defence to the claim or counter claim within 28 days from the date of the service of the Memorandum of Appearance or within such period as the court may order or the parties may agree (the deadline cannot be extended for more than 42 days).

There are no specific provisions in the CPR in relation to collective actions. However, where there are numerous persons having the same interest in a cause or matter, one or more of such persons may be authorised by the court to sue or defend in such cause or matter, as a representative and for the benefit of all interested persons.

There is no express provision requiring lawyers to provide their clients with a cost estimate of the potential court proceedings at the outset. However, the general duties imposed by the Advocates’ Code of Conduct include duties of openness and honesty which may be said to require lawyers to provide a cost estimate if the client so requests to the extent that this is practically possible.

Interlocutory applications/motions may be made both before and after the filing of a claim. These types of applications are not limited to case management issues. Section 32 of the Courts of Justice Law and the CPR give the Cypriot courts the power to grant such interim relief as the court considers just and convenient in the circumstances of the case.

A party may apply for summary judgment with respect to the whole or a part of the claim and may also apply for the other party’s case to be struck out before trial.

Summary Judgment

A summary judgment may be granted by the court against a claimant or a defendant, if the court finds that:

• the claimant has no real prospect of success on the claim or issue; or
• the defendant has no realistic prospect of successfully defending the claim or issue; and
• there is no other compelling reason why the case or matter should be decided at trial.

Judgment on the Basis of Admissions

Where any facts have been admitted, either in the pleadings or otherwise, a party may at any stage of the proceedings apply to the court for such judgment or order as such party may be entitled to obtain on the basis of such admissions without waiting for any other matter between the parties to be determined.

The Court’s Power to Strike Out a Claim or Defence

A party may also apply for the other party’s case to be struck out before trial in cases where the other party’s case has no reasonable prospect of success or is otherwise abusive (for example because the other party is seeking to re-litigate matters that have already been determined by a competent court).

The main dispositive motions that are commonly made before trial, include:

• applications for the issuance of a summary judgment or judgment on the basis of admissions;
• applications for the dismissal of the action for want of prosecution; and
• applications to strike out the other party’s case.

Interested parties not named as a claimant or defendant may join a lawsuit if:

• the joinder of such parties is desirable in order for the court to be able to determine all matters in dispute between all affected parties; or
• there is an issue between the interested party and a party to the proceedings which is closely connected with the matters in dispute and the joinder of the interested party is desirable in order for the court to be able to determine this issue.

A defendant (or a claimant in a counterclaim) may apply for an order ordering the provision of security for costs by the claimant in order to ensure that it will be able to recover the litigation costs from the unsuccessful party.

An order ordering the provision of security for costs will only be granted if the claimant is not ordinarily resident in Cyprus or another EU member state and there is a genuine concern that the defendant will be unable to enforce a costs order made in their favour.

Cypriot courts have broad discretion in awarding costs associated with interim applications. The general rule is that the costs will be awarded in favour of the successful party and against the unsuccessful party.

The timeframe for a court to deal with an application can vary significantly depending on the nature of the application, the specific circumstances surrounding each case, and the workload and efficiency of the judge. Generally speaking, applications made with notice in the context of civil proceedings may take three to eight months, or possibly longer, to be determined.

In cases of genuine urgency, a party may file an application on an ex parte basis, without notifying the other party. Such applications are usually dealt with within a few working days from the date of filing. 

The CPR make a distinction between “General Disclosure” (covering documents on which the disclosing party intends to rely or which are necessary to enable the other parties to understand the disclosing party’s case) and “Specific Disclosure” (covering documents which are in the possession or control of the disclosing party and which may support or adversely affect the case of any other party).

All parties to claims in excess of EUR10,000 must provide a “General Disclosure” at least 14 days before the case is fixed for case management conference by filing a statement of witness in accordance with the specific form provided in the CPRs and serve a copy thereof together with copies of the disclosed documents to the other parties. Except if the court gives other directions, a party may provide “Supplementary General Disclosure” at any time but no later than six months before the case is fixed for hearing. The parties cannot submit as evidence any document which they failed to disclose and produce. 

A party may file an application to the court requesting a Special Disclosure Order against a person who is not a party to the proceedings. Such application shall provide sufficient details/description of the requested document(s) or the specific category of documents and shall be supported by evidence stating the reasons why the requested document(s) is material for the outcome of the claim, that such document(s) is not in the possession of the applicant and the reasons why it is believed that the requested document(s) is in the possession of the respondent. The court may grant such order if it is satisfied that the application meets the above-mentioned criteria and that there are no valid grounds for objection (ie, legal privilege, confidentiality, privilege against self-incrimination).

In addition, the Cypriot courts have the power to grant “Norwich Pharmacal Orders” ordering third parties who became mixed up in some form of wrongdoing against the applicant to disclose documents and information in their possession if such disclosure is shown to be necessary in order to enable the applicant to identify the wrongdoers and/or take legal action to protect their rights.

Each party must disclose all documents which are or were in its possession, custody or control and on which it intends to rely, or which are necessary to enable the other parties to understand the disclosing party’s case. The disclosing party is obliged to file a witness statement in accordance with the specific form provided by the CPR and serve a copy thereof together with copies of the disclosed documents to the other parties. The witness statement shall state the date, title or description, author, sender and receiver of each disclosed document.

The CPR include specific provisions in relation to discovery. Please refer to 5.3 Discovery in This Jurisdiction.

The concept of legal privilege is recognised in Cyprus as a fundamental right and obligation. Any form of communication between a lawyer and their client in relation to legal proceedings or the provision of legal advice is privileged. The legal privilege also covers communications between the lawyer or their client and third parties if the dominant purpose of such communications is connected with pending or potential litigation against that client. Communications between a lawyer and their client which are intended to facilitate the commission of a criminal offence are not privileged.

Although this matter has not yet been determined by the Cypriot courts, the prevailing view is that is that legal privilege does not apply to in-house lawyers.

A party served with a request for Special Disclosure may file an objection for reasons of, among other things, legal privilege, lack of relevance to the issues in dispute, loss or destruction of the requested document.

Section 32 of the Courts of Justice Law and the CPR give the Cypriot courts very extensive powers to grant injunctive relief. The main types of interim injunctions/orders granted by the Cypriot court are:

• freezing orders (also known as “Mareva injunctions”) preventing a defendant from using or dissipating all or part of their assets (including assets located outside Cyprus) pending the determination of the claimant’s claim;
• ancillary disclosure orders ordering the disclosure of a defendant’s assets for the purpose of policing a freezing order granted against the defendant;
• “Norwich Pharmacal orders” ordering a person who is mixed up in wrongdoing to disclose information and/or documents in order to enable the applicant to bring legal proceedings in respect of the wrongdoing and/or trace misappropriated assets;
• search orders (also known as Anton Piller orders) requiring persons who are in control of premises situated in Cyprus to permit an independent “Supervising Advocate” and the applicant’s representatives to enter such premises for the purpose of searching them and removing documents and/or obtaining information relating to specific matters;
• “Chabra orders” preventing a person against whom the applicant has no cause of action or claim (such as a person who holds assets as a trustee, agent or “nominee” of a wrongdoer against whom the applicant has brought a claim) from dissipating assets which may become available to satisfy a judgment against the wrongdoer;
• orders ordering the appointment of an interim receiver for the purpose of ensuring the preservation of the defendant’s assets and/or the defendant’s compliance with the freezing order;
• “Quia timet” injunctions which are “pre-emptive” injunctions intended to prevent the commission of a wrong or the violation of the applicant’s rights in circumstances where an act amounting to a wrong or a violation of the applicant’s rights is threatened;
• anti-suit injunctions restraining a person from commencing or continuing court proceedings in other jurisdictions (other than the courts of the EU member states); and
• orders for the appointment of an interim receiver for the purpose of preserving assets.

Interim relief may be granted on an ex-parte basis in cases of urgency or where other special circumstances justify the granting of relief on an ex-parte basis. In practice, the courts consider ex parte applications for the issuance of interim orders within two or three working days from the date of its filing. There are no provisions or arrangements for out-of-hours judges.

A party may apply for an injunctive relief on an ex parte basis in cases of urgency, in cases where there are other special circumstances justifying the granting of relief on an ex parte basis and in cases where the court considers that the overriding objective of dealing with cases fairly and in an efficient and cost-effective manner would be served by granting relief on an ex parte basis.

The court, when granting an interim order, may impose such terms as it considers appropriate in order to protect the rights and interests of the respondent, including requiring the applicant to provide security for any potential damages that the respondent may suffer as a result of the order being granted. The Cypriot courts nearly always require the provision of such security when an injunction is granted on an ex parte basis.

If the respondent successfully discharges the injunction and the court considers that there was no valid basis for seeking the injunction, the court may, upon an application filed by the respondent, order the payment to the respondent of reasonable compensation for the damage caused to them out of the security provided by the applicant.

Cypriot courts have the power to grant injunctive relief against worldwide assets of the respondent.

Cypriot courts have the power to issue injunctive relief against third parties. Please refer to 6.1 Circumstances of Injunctive Relief.

If a respondent fails to comply with an injunction, the court has the power to order the imprisonment of the respondent or impose a fine. In addition, non-compliance with an injunction may result in the court striking out a respondent’s defence enabling the claimant to obtain judgment in default.

In proceedings commenced by a “Part 7 Claim Form”, evidence at trial must be given by means of written witness statements which must be submitted and served in advance. As a rule, the witnesses must then appear before the court for cross-examination. Proceedings commenced by a “Part 8 Claim Form” will, as a rule, be determined on the basis of the written evidence accompanying the claim form and the opposition respectively subject to the court’s power to order the attendance of a witness for cross-examination (which is expected to be exercised sparingly).

The CPR include specific provisions in relation to case management for both interim applications and the main proceedings.

Interim applications are fixed by the Court Registry for a “procedural directions hearing” in the course of which the court sets out the timetable for the trial of the application and deadlines for the filing of the opposition, any supplementary affidavits, any cross-examination application and the written submissions of the parties.

As regards the main proceedings, the parties are required to file a questionnaire within 28 from the date that the pleadings considered to be closed and the case will be fixed before the judge for “preliminary case management”. At this stage the court will classify the claim as small claim (under EUR10,000) or ordinary claim (above EUR10,000).

A claim classified as ordinary is then fixed for a “case management hearing” in the course of which the court gives directions and sets out the timetable for the filing of document disclosure affidavits, production of documents and exchange of witness statements and supplementary witness statements. In addition, the court determines whether any matter or matters should be determined as a preliminary matter before trial and fixes a “preliminary hearing” date as well as dates for the main trial.

Jury trials are not available in Cyprus.

The general rules governing admissibility of evidence are that the evidence adduced before the court should be relevant to the matters in dispute and that the parties should present the best available evidence. Hearsay evidence is admissible in Cyprus and it is up to the court to assess its probative value and reliability. Evidence obtained in violation of the provisions of the Constitution (including the provisions protecting human rights) will not be admitted under any circumstances. If the illegality of the manner in which evidence is obtained does not involve a violation of the provisions of the Constitution, the court has a discretion to admit or exclude the evidence depending, among other things, on the circumstances and the seriousness of the illegality.

The CPR provide that the court has the power to control the evidence adduced by giving directions in relation to the issues that the evidence should cover, the nature of the evidence which is required in order to consider the matters in question, and the way in which such evidence will be put before the court. The court also has the power to exclude evidence and limit the cross-examination.

The CPR provide that expert evidence can only be adduced with the court’s permission, which is to be given only if the court is persuaded that the evidence proposed to be adduced will assist the court and that the granting of permission to adduce such evidence would be consistent with the “overriding objective”. The court has also the power to seek expert evidence of its own motion.

Expert witnesses have a duty to provide objective and impartial evidence on matters that fall within their area of expertise, enabling the court to judge the accuracy of their conclusions and to formulate an independent view on their application to the facts.

The general rule is that all court hearings are open to the public. Article 30 of the Constitution of the Republic of Cyprus, which entrenches the right of every person to a public hearing, provides that the public may be excluded from all or any part of court proceedings upon a decision of the court where it is in the interest of the security of the Republic, the constitutional order, public order, the public safety or public morals, or where the interests of juveniles or the protection of the private life of the parties so require, as well as in special circumstances where, in the opinion of the court, publicity would prejudice the interests of justice.

The transcripts of hearings are only available to the parties to the action but a third party may apply to the court for permission to obtain a copy of such transcripts. Such permission will only be granted if the applicant demonstrates that they have a legitimate interest in obtaining the transcripts. 

Under the CPR a judge has wide discretion to regulate the proceedings before them as they consider appropriate and in the interest of justice. Indeed, one of the purposes of the new CPR was to enable judges to take a more active role in the proceedings. Pursuant to the CPR, judges have the power to give directions in relation to a range of issues concerning the way in which the trial is conducted, including the number of witnesses, the matters in relation to which oral evidence is required and the time available for cross-examination. Generally, rulings on objections to the admissibility of documentary or oral evidence are given by the judge at the hearing unless a particularly complex legal issue is raised. Judgments on interim applications as well as final judgments are usually reserved and delivered at a later date.

The length of time between commencement of civil proceedings and trial varies considerably depending, inter alia, on the nature of the proceedings, the District Court in which the proceedings are commenced and the workload of the particular judge to whom the proceedings are assigned. The level of backlogs in litigious civil and commercial cases is quite high and often results in serious delays in the processing of cases. On average, the period between commencement of civil proceedings and trial at first instance is currently around five years. However, the introduction of the new CPR, the establishment of new specialised courts, the introduction of measures to deal with “backlog” cases and the introduction of an electronic filing and case management system are expected to gradually lead to a significant reduction of the length of time between commencement of proceedings and trial.        

Court approval is generally not required to settle a civil claim. However, there are specific circumstances in which court approval/leave is necessary. Court approval/leave is required in order for a claim served on the defendant(s) to be discontinued without prejudice (ie, with reservation of the right to file a new claim in the future with respect to the same matters). Court approval/leave is also required in cases where minors or their property rights are affected.

The settlement of a lawsuit can remain confidential as there is no obligation to inform the court of the terms of the settlement or submit a copy of the settlement agreement. Only the fact that a settlement has been achieved is required to be declared.

Settlement agreements can be enforced in the same manner as all other contracts, ie, by filing an action in the event of breach. In some cases, the settlement agreement provides for the issuance of a judgment or order of the court by consent on specific terms. In such cases, it may be possible to enforce the provisions of the settlement agreement reflected in the relevant judgment or order using the available mechanisms for the enforcement of court judgments.

A settlement agreement may be set aside on the same grounds as any other contract, ie, because of lack of capacity of any of the parties, mutual mistake, misrepresentation, fraud, duress and undue influence.

The Cypriot courts have the power to grant a wide range of remedies at the full trial stage including an award of damages, a declaratory judgment as to the rights and obligations of the parties and mandatory or prohibitive injunctions. The available remedies depend on the nature of the claim and the facts of the particular case. For example, in claims based on breach of a contract for the sale of land, or in other cases where an award for damages would not be an adequate remedy, an order for specific performance of the relevant contract may be granted.

The Cypriot courts have wide discretion to award damages and there are no legislative provisions limiting maximum damages. Punitive damages may only be awarded in specific cases, namely:

• where there is oppressive and unconstitutional conduct by a public servant;
• where the defendant aims to take advantage of the wrongful act in order to make a profit; or
• where there is a specific legislative provision permitting the award of punitive damages.

The general rule is that the aim of damages is to compensate the claimant for loss and damage actually suffered. The common law rules regarding causation and remoteness of damage apply.

As a general rule, the interest awarded by the court begins to accrue from the date of filing of the claim unless there is an agreement between the parties regarding the payment of interest (such as a loan agreement) or the court otherwise orders. Interest continues to accrue until the final repayment of the judgment debt. Under Cyprus law the rate of legal interest is fixed by a decree of the Minister of Finance and the current rate is 5.5%. It should be noted that there are statutory provisions which regulate a party’s entitlement to interest in relation to specific kinds of debt. For example, the Suppression of Payment Delays in Commercial Transactions Law provides that a party who sells good or provides services is entitled to interest on the amounts due to them accruing from the agreed time of payment at a rate equal to the main refinancing operations interest rate published by the European Central Bank plus 8%.

A Cypriot judgment can be enforced through the following execution measures:

• writ of seizure and sale of the debtor’s movable property;
• sale of the debtor’s immovable property;
• charging order over bonds or corporate shares or units in trusts held by the debtor followed by an order for the sale of such assets;
• writ of attachment against third parties (including banks) which have in their possession movable or immovable property which belongs to the debtor; and
• an order for examination of the debtor regarding their assets followed by an order for the payment of the judgment debt by monthly instalments.

The procedure for enforcing foreign judgments in Cyprus depends on where the foreign judgment was given. Judgments given in civil and commercial matters by the courts of EU member states or the courts of Norway, Switzerland and Iceland are enforceable in Cyprus pursuant to the provisions of the Recast Brussels I Regulation (Regulation (EU) No 1215/2012) and the Lugano Convention on jurisdiction and the recognition and enforcement of judgments. Furthermore, the Republic of Cyprus is a party to a number of bilateral treaties for the mutual recognition and enforcement of judgments. Judgments originating from such countries may be recognised and enforced in Cyprus in accordance with the procedure and subject to the exceptions and qualifications stipulated in the relevant treaty. Judgments given in certain Commonwealth countries in civil matters are enforceable in Cyprus pursuant to the provisions of the Mutual Recognition of Certain Judgments of the Courts of Commonwealth Countries Law, Cap. 10. Notwithstanding Brexit, judgments given in the United Kingdom continue to be enforceable in Cyprus pursuant to the provisions of this Law. Final and conclusive judgments, for a definite sum given by a court having jurisdiction in a country other than those mentioned above, may be enforced in Cyprus by bringing an action at common law on the basis of the foreign judgment.

All first instance judgments can be appealed as of right by filing an appeal in the (new) Court of Appeal. Judgments of the Court of Appeal may be appealed by filing an appeal in the Supreme Constitutional Court (in cases of judgments on appeals against decisions of the Administrative Court or the International Protection Court) or in the (new) Supreme Court (in all other cases). Such an appeal may only be filed with the leave of the Supreme Constitutional Court or the Supreme Court, which will be granted only in relation to legal issues and only in cases where the legal issues in question concern the interpretation of a legislative provision of wider public importance or concern matters of wider public importance or are issues in relation to which there are conflicting judgments of the Court of Appeal.

Please refer to 10.1 Levels of Appeal or Review to a Litigation.

An appeal against an interim judgment must be filed within 14 days from the date of the issuance of such judgment. An appeal against a final judgment must be filed within 42 days from the date of issuance of such judgment. The relevant deadlines may be extended by the court in exceptional circumstances.

The Court of Appeal will only consider the grounds of appeal set out in the appellant’s Notice of Appeal. Points that were not raised at first instance cannot be raised at an appeal. The Court of Appeal will review the first instance decision and will only intervene if it finds that the first instance court made an error of law or made findings which are manifestly inconsistent with the evidence that was placed before it. The Court of Appeal will not usually interfere with the first instance court’s conclusions with regards to the credibility of the witnesses unless such conclusions are arbitrary or manifestly unjustified.

No conditions can be imposed in relation to appeals filed in the Court of Appeal. As regards appeals to the Supreme Constitutional Court of the Supreme Court, where leave to appeal is required, the court granting leave to appeal may limit the legal issues with respect to which leave is granted.

The Court of Appeal has the power:

• to affirm, set aside or vary the decision or order of the first instance court;
• to order a re-trial and specify the matters required to be determined by the first instance court; and
• to issue appropriate orders with regards to costs and payment of interest.

The courts have a wide discretion with regard to costs. As a rule, the costs are awarded to the successful party. However, the costs awarded are currently calculated with reference to the amounts set out in the Regulations issued by the Supreme Court of Cyprus (which are linked to the amount of the claim before the Court). These amounts are low and usually represent only a fraction of the successful party’s actual costs in complex, high value commercial disputes.

The CPR contain more detailed provisions as to the kinds of costs orders that the court may make and the factors which the court should take into account in exercising its discretion. The CPR also introduce the general principle that an ultimately successful litigant may (and indeed should) be ordered to bear or even pay to the unsuccessful litigant any proportion of the total costs that may be attributed to the successful litigant’s unreasonable or unjustified conduct before and/or during the proceedings.

When awarding costs, the courts may consider a number of factors, including the conduct of the parties before and during the proceedings, the complexity and/or novelty of the legal issues raised, the outcome of the proceedings and whether the successful party overstated its claim or otherwise caused unnecessary costs.

Legal interest is awarded on cost. The rate of the legal interest is fixed by a decree of the Minister of Finance. The current rate is 5.5%.

ADR methods, particularly arbitration and mediation, are beginning to be used more widely in recent years due to their advantages over traditional litigation. Cypriot legal practitioners, professionals and businesses are constantly encouraging the use of ADR with the aim to shift the focus so as to align with international trends where ADR is seen as a valuable alternative to lengthy and costly court procedures.

The courts in Cyprus have repeatedly expressed support for ADR and encourage parties to consider arbitration and mediation before pursuing litigation. A party cannot be compelled to pursue ADR or penalised for failing to do so but may be required to consider ADR; court proceedings may also be stayed for a reasonable period in order to enable the parties to make efforts to settle the case by ADR.

Institutions offering and promoting ADR in Cyprus are generally well organised and actively contribute to the development of ADR mechanisms. Most of these institutions, including the Cyprus Arbitration and Mediation Centre and the Cyprus Eurasia Dispute Resolution and Arbitration Centre, offer training programmes and certification courses for arbitrators and mediators, and promote ADR through forums and seminars where global leading practitioners gather and share their valuable insights and views on matters concerning ADR.

In Cyprus, the conduct of arbitrations and the recognition of enforcement of arbitral awards are governed by the Arbitration Law, Cap. 4 (“Cap. 4”), which applies to arbitrations between Cypriot parties, and the International Commercial Arbitration Law 1987 (ICAL), which is based on the UNCITRAL Model Law and applies exclusively to international commercial arbitrations.

Criminal matters, disputes with public policy implications and matters of personal status, such as divorce and disputes affecting minors, are considered non-arbitrable in Cyprus.

In accordance with the ICAL, an arbitral award may be challenged (and set aside) within three months from the date on which the party making the application received the award on the following grounds:

• one of the parties in the arbitration agreement lacked contractual capacity or the arbitration agreement was not valid according to the governing law;
• one of the challenging parties in the arbitration was not given proper notice in relation to the appointment of an arbitrator or the arbitration proceedings or was deprived of the rights to present its case;
• the composition of the tribunal or the whole arbitral process was in violation of what had been agreed by the parties;
• the subject matter of the dispute is not arbitrable under Cypriot law; or
• the award does not comply with the Cypriot public order.

Pursuant to the provisions of Cap. 4, the court may also set aside an arbitral award on the ground of improper conduct on the part of the arbitrator. 

Both Cap. 4 and the ICAL provide for the recognition of an arbitral award. As far as domestic arbitrations are concerned, Cap. 4 provides that an arbitral award may be recognised by the Cyprus courts following a leave of the court which may be granted upon application of the party concerned. In a similar vein, an award issued in an international arbitration may be recognised pursuant to the provisions of the ICAL, following an order of the court issued upon a written application which is accompanied by the original award or a certified copy of it. Once recognised, an arbitral award may be enforced in the same ways as a court judgment.

Since 2021, the Cypriot legal system has undergone a major overhaul through a series of reforms aiming to build a modern, accessible and efficient system of administering justice. These reforms include:

• the establishment of two new specialised courts (namely the Commercial and Admiralty Courts) and a three-tier court system as described above;
• the establishment of a training school for judges;
• the introduction of a new digitalised platform for the digital filing and administration of courts’ cases; and
• the introduction of the new CPR.

Intellectual property, data protection and energy-related claims are three areas likely to see more growth, as well as a shift away from classical litigation to arbitration/mediation.