Cyprus: Cyprus Chapter Of Enforcement Of Foreign Judgments

1. UNIFORMITY OF LAW AND REGULATIONS

The Republic of Cyprus has a national system of justice which is enforced uniformly throughout the government-controlled area of the country. The northern part of the island (approximately one-third of the total area) was occupied by Turkish forces in 1974, and it remains so at present. Information in this chapter does not apply to the occupied area. Cyprus was a British colony until 1960 and followed English law. Following independence Cyprus law continues to lean heavily on English law, but since Cyprus joined the EU in 2004 European law has also become influential.

This history is evident in the fact that mechanisms exist for the recognition and enforcement of foreign judgments via several routes, namely:

• European Union Regulations, particularly Regulation 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters ('Regulation 44/2001'), Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) ('Regulation 1215/2012') and Regulation 805/2004 creating a European Enforcement Order for uncontested claims ('Regulation 805/2004');
• Common law;
• Statute; and
• Bilateral treaties and multilateral conventions.

Which mechanism will apply depends on the facts of the case. For judgments originating in the courts of EU countries the appropriate route is the Regulation. Claims are brought under statute when there is a bilateral treaty or the judgment originates in a court of a Commonwealth country. Common law actions are taken in other cases.

Regulation 44/2001 was the original 'Brussels I' regulation. Notwithstanding its repeal by Regulation 1215/2012¹ it continues to apply to judgments given in civil and commercial matters by the courts of Member States except Denmark in legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded before 10 January 2015 that fall within its scope. The objective of the Regulation was to achieve the free circulation of judgments within the Member States by means of a legal instrument which is binding and directly applicable in all Member States. Regulation 1215/2012 applies to judgments and corresponding documents issued on or after 10 January 2015. It is expected that the original Regulation will fall into disuse after a short transition period.

Regulation 805/2004 provides a parallel streamlined enforcement mechanism for uncontested claims.

For judgments obtained in the United Kingdom, British dominions, protectorates and mandated territories as well as other foreign countries which accord reciprocal treatment to judgments given in the Republic of Cyprus, registration is governed by the Foreign Judgments (Reciprocal Enforcement) Law of 1935, Cap 10, as amended by the Reciprocal Execution of certain Judgments of the Commonwealth Countries Law, 130(I) of 2000. Cap 10 was modelled on the corresponding English legislation, that is, the Foreign Judgments (Reciprocal Enforcement) Act 1933; its use as a vehicle for recognition and enforcement of foreign judgments has fallen following the accession of Cyprus to the EU in 2004 and the application of Regulation 44/2001.

Common law rules normally apply to the recognition of judgments in civil and commercial matters which originate in jurisdictions outside the EU.

The substantive grounds on which a foreign judgment may be enforced under statute closely reflect the common law. In accordance with section 29(1) of the Courts of Justice Law, each court in its civil jurisdiction must apply the Constitution and the laws enacted under it, including all laws that have continued in force by virtue of Article 188 of the Constitution, the common law and the principles of equity, as well as all United Kingdom laws that were in force in Cyprus immediately before independence in 1960, unless these are repugnant to the Constitution or any law made under it. Of particular importance is Article 169 of the Constitution which provides that conventions or treaties relating to commercial matters, economic cooperation and modus vivendi that Cyprus ratifies will, on the basis of reciprocity, have superior force over domestic law. This is particularly important in respect of the enforcement of arbitration judgments since Cyprus has ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958. It has also adopted, with minimal amendments, the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Arbitration.

2. JUDGMENTS

2.1. Definition

Article 2 of Regulation 1215/2012, like Article 32 of the predecessor Regulation 44/2001, defines a judgment as:

Omitting the reference to EU Member States, this is a reasonable approximation of the definition used throughout Cyprus law.

The Regulations do not extend to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii), or to:

• the status or legal capacity of natural persons, or rights in property arising out of a matrimonial or similar relationship;
• bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;
• social security;
• maintenance obligations arising from a family relationship, parentage, marriage or affinity; or
• wills and succession, including maintenance obligations arising by reason of death.

Both the original and the recast regulations also exclude arbitration from their scope. Many commentators explain that this is due to the need to avoid conflict with existing international conventions on arbitration and, in particular, the New York Convention of 1958. It is important to note, however, that, in the Marc Rich² case, the European Court of Justice distinguished between 'arbitration' as the subject matter of the proceedings and as a preliminary issue.³

2.2. Enforceability of Various Categories of Judgment

Under EU Regulations

In summary, as regards the enforceability under the Regulations of the various categories of judgments listed in the questionnaire:

1. money judgments – are generally enforceable;
2. specific performance – are generally enforceable;
3. injunctions – are generally enforceable;
4. arbitration awards – are not enforceable;
5. personal status (divorce, matrimonial, inheritance, adoption, insolvency) – are not enforceable;
6. an award for multiple/punitive damages – would be enforceable unless it could be shown to be contrary to public policy;
7. a judgment which is in itself a recognition of a previous foreign judgment – would generally be enforceable;
8. are foreign interim orders enforceable for:
   
   
   1. relief pendente lite – yes;
   2. maintenance and custody – no.
9. judgments against the local State or any of its organs – the recast Regulation specifically excludes the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii);
10. apart from judgments which are against public policy are there any judgments which would not be enforceable? Yes – rulings relating to revenue, customs or administrative matters, the status or legal capacity of natural persons, matrimonial matters, wills and succession, bankruptcy and social security. Are foreign fiscal judgments (income tax and customs duties) enforceable? No.

Brussels I Regulations

Under Regulation 44/2001 every judgment entitled to recognition and enforceable in the Member State in which it was given may, in principle, on application be declared enforceable in Cyprus. The procedure to be followed is set out in Articles 38–52 of Regulation 44/2001. Generally, the procedure should be governed by Cyprus law, and the competent court should see that this requirement is met. The judgment creditor seeking to obtain a certificate of enforceability in Cyprus may apply ex parte to the court. Therefore the judgment debtor will have no say in the proceedings until the certificate is issued and, if it is indeed issued, it must be served on the debtor in accordance with Article 42 of Regulation 44/2001.

With the introduction of Regulation 1215/2012, no such procedure is required. In particular, according to Article 39 of the Regulation, a judgment given in a Member State which is enforceable in that Member State is enforceable in other Member States without any declaration of enforceability being required. Under Regulation 1215/2012, a certificate of enforceability is issued by the court of origin of the judgment, as provided in Article 53. In other words, when a judgment is recognized in another Member State, and the interested party obtains from the Member State of origin a certificate of enforceability, the judgment is enforceable in the Member State addressed, under the same conditions as a judgment given by its own courts.

Regulation 805/2004

Regulation 805/2004 also excludes from its scope rulings relating to revenue, customs or administrative matters, the status or legal capacity of natural persons, matrimonial matters, wills and succession, bankruptcy and social security.

Under Common Law

In summary, as regards the enforceability under common law of the various categories of judgments listed in the questionnaire:

1. money judgments – are generally enforceable;
2. specific performance – are generally enforceable;
3. injunctions – are generally enforceable;
4. arbitration awards – are generally enforceable;
5. personal status (divorce, matrimonial, inheritance, adoption, insolvency) – are generally enforceable;
6. an award for multiple/punitive damages – would be enforceable unless it could be shown to be contrary to public policy;
7. a judgment which is in itself a recognition of a previous foreign judgment – would generally be enforceable;
8. are foreign interim orders enforceable for:
   
   
   1. relief pendente lite – yes;
   2. maintenance and custody – yes.
9. judgments against the local State or any of its organs – yes;
10. apart from judgments which are against public policy are there any judgments which would not be enforceable? No. Are foreign fiscal judgments (income tax and customs duties) enforceable? Yes.

In common law a foreign judgment is recognized when the Cyprus court concludes that a particular claim has already been adjudicated and determined once and for all by the foreign court (res judicata).

A judgment creditor can enforce a foreign judgment in Cyprus at common law by bringing a fresh action. As soon as he files a writ of summons (usually specially endorsed), he can apply by summons for summary judgment under Order 18 of the Civil Procedure Rules on the ground that the defendant has no defence to the claim. If his application is successful, the defendant will not be allowed to defend. The merits of the judgment are not reviewable and the judgment must be final and conclusive and for a fixed sum of money. 'Final' has been interpreted to mean that the judgment cannot be reopened in the court of origin, even though an appeal may be pending against it, and 'conclusive', that the judgment represents the court's settled conclusion on the merits of the case.

Alternatively, instead of filing an action on the foreign judgment, the judgment creditor can file an action relying on the facts which created the cause of action in which the foreign judgment was given. However, the Supreme Court has ruled that if the judgment is capable of registration (see statute section below) it cannot be enforced by a common law action on the judgment.

Under Statute

The enforceability of the various categories of judgments listed in the questionnaire is broadly the same as under common law, and is as follows:

1. money judgments – are generally enforceable;
2. specific performance – are generally enforceable;
3. injunctions – are generally enforceable;
4. arbitration awards – are generally enforceable;
5. personal status (divorce, matrimonial, inheritance, adoption, insolvency) – are generally enforceable;
6. an award for multiple/punitive damages – would be enforceable unless it could be shown to be contrary to public policy;
7. a judgment which is in itself a recognition of a previous foreign judgment – would generally be enforceable;
8. are foreign interim orders enforceable for:
   
   
   1. relief pendente lite – yes;
   2. maintenance and custody – yes.
9. judgments against the local State or any of its organs – yes;
10. apart from judgments which are against public policy are there any judgments which would not be enforceable? No. Are foreign fiscal judgments (income tax and customs duties) enforceable? Yes.

However, the relevant statute in each case should be checked for any particular exceptions.

The substantive grounds on which registration of a foreign judgment may be made or set aside closely reflect the common law in Cyprus. A foreign judgment can be enforceable by direct registration, under the provisions of an applicable statute. For example, the registration of judgments obtained in the UK is governed by the Foreign Judgments (Reciprocal Enforcement) Law 1935 and the rules made under the Law by an Order in Council. The Law is modelled on the corresponding UK statute, the Foreign Judgments (Reciprocal Enforcement) Law Rules and the Maintenance Orders (Facilities for Enforcement) Law 1921. Cyprus is also bound by bilateral treaties relating to the recognition and enforcement of foreign judgments with Bulgaria, China, Germany, Greece, Hungary, Poland, Russia, Serbia and Syria, and it is a signatory to various multilateral conventions relating to the recognition and enforcement of foreign judgments. These include:

• the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters 1971 and Supplementary Protocol thereto;⁴
• the European Convention on the Recognition and Enforcement of Decisions concerning Custody of Children and/or Restoration of Custody of Children 1980;⁵
• the European Convention on the Recognition and Enforcement of Certain International Aspects of Bankruptcy 1990.⁶

The judgment creditor may choose to have the judgment registered in the District Court for the area where the debtor resides or where any property to which the judgment relates is situated. In order for a judgment to be registered it must comply with the following requirements:

• the judgment is final and conclusive;
• there is a sum of money payable under it which is not related to tax claims or similar charges, or in respect of a fine or penalty;
• the application is made within six years of the judgment having been given or an appeal adjudicated;
• the judgment is unsatisfied, at least in part; and the judgment is capable of execution in the original foreign court.

Insolvency

Regulation (EC) No. 1346/2000 on insolvency proceedings is directly applicable in Cyprus. Under the regulation, a judgment initiating insolvency proceedings issued by a competent court of an EU Member State will be recognized in Cyprus and vice versa.

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Footnotes

^{1 Regulation 1215/2012, Art. 80.}

^{2 Marc Rich & Co. AG v. Societa Italiana Impianti PA, Case C-190/89 [1991] E.C.R. I-3855.}

^{3 Ambrose, Arbitration and the Free Movement of Judgments, 19(1) Arb. Intl. (2003).}

^{4 Ratified by Law 11 of 1976.}

^{5 Ratified by Law 36 of 1986.}

^{6 Ratified by Law 36(III) of 1993.}

This chapter was first published in "Enforcement of Foreign Judgments" edited by Louis Garb and Julian Lew QC and published by Kluwer Law International.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.