Dispute Resolution in the Republic of Cyprus

A legal system based on common law, geographic location & well-developed business infrastructure - all of these factors make resolving international disputes in Cyprus a very attractive option.

The most popular way of resolving disputes in Cyprus is litigation, with arbitration being used mostly in cases requiring extensive legal expertise (e.g construction, disputes with banks, etc.,). In its turn, resolving disputes through mediation is an alternative to the two above methods. 

Cyprus: Changes in Arbitration & Mediation Legislation

Recent years have seen Cypriotic legal system undergo profound changes. Aimed at facilitating early resolution of disputes & reducing pre-trial delays, the changes included:

• stricter deadlines for holding trials;
• after being served a summon, plaintiffs are required to notify courts of their interim steps within one month; failure to do so results in them being stripped of such rights;
• after being served summons, parties mustn’t change their statements;
• for cases whose value doesn’t exceed three thousand euros, instructions for exchange of written evidence are issued by courts; the instructions cover the time required for preparation of such evidence & number of witnesses;
• for cases whose value exceeds three thousand euros, courts issue instructions based on the list of witnesses & evidence submitted by parties concerned.

Under the recent changes to Cypriotic arbitration legislation, some disputes must be submitted to arbitration. From now on, those wishing to resolve consumer disputes by arbitration in the Republic of Cyprus can make use of a special ADR regime. Also, an appropriate body entrusted with handling consumer disputes in the Republic of Cyprus has been created. Arbitrators must be listed in the respective registers, rendering awards within thirty days after the arbitration is over.

There has been a marked increase in the popularity of mediation in Cyprus lately. And the main reason for that is the adoption of the Mediation Act which attempts to regulate resolution of disputes through mediation in the Republic of Cyprus by:

• elucidating conclusion of settlement agreements in the Republic of Cyprus;
• elucidating procedural issues connected with initiating the mediation process in the Republic of Cyprus;
• elucidating courts' role in resolving disputes by mediation in the Republic of Cyprus;
• establishing registers of intermediaries
• determining mediators’ duties during peaceful settlement of disputes in the Republic of Cyprus;

Pursuant to the Mediation Act, any disputes, with the exception of family ones, may be the subject of civil litigation action. This is also applicable to international disputes, including resolving labor disputes in the Republic of Cyprus.

By adopting the Mediation Act, Cypriotic legislators have increased the role of mediation in resolving disputes in the Republic of Cyprus. From now on, courts can suggest that parties take part in a mediation session, while the latter may either decline or accept their invitation. Hence, resorting to mediation for settling differences in the Republic of Cyprus is entirely optional. However, courts do reserve the right to force parties to take part in the mediation process. 

Under the law, parties must conclude a mediation agreement in Cyprus whereby they are obliged to accept invited experts’ opinion. Mediation agreements must be enforced as private agreements, and not as arbitral awards.