Cyprus Courts’ Interim Orders Jurisdiction: International Freezing, Discovery and Arbitration Aid Orders


     By Anastasios Antoniou LLC

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Cypriot courts have a fully established judicial power to grant interim orders over various issues with an international effect.

Cypriot courts have a fully established judicial power to grant interim orders over various issues with an international effect. Namely, the Cypriot legal order has incorporated the power of the courts to issue freezing orders towards protecting assets in risk of alienation or towards preserving a status quo of assets pending the final and conclusive determination of the relevant proceedings. It is possible to apply to the courts for interim measures on an ex-parte basis but is necessary for the facts to satisfy all legislative conditions enabling the court to order such measures, as well as establishing the existence of an element of extreme urgency.

The power of the Cyprus courts is not limited to freezing orders. Where justice so requires, they may issue interim specific performance orders or mandatory injunctions to the effect of instructing a person to take active steps or they may even appoint a receiver or take any steps that justice may require.

Pursuant to the provisions of the Courts of Justice Law 14/1960, the Courts of Cyprus are competent and have jurisdiction to grant any interim order, in all cases, in which it appears to the Court, just and convenient to do so, provided that the following conditions are met by the Applicant:

a. A serious issue exists, that is to be tried in relation to the main proceedings;
b. It appears that the Applicant has a probability to obtain a favorable judgment in the main proceedings;
c. There is a great risk that, if the interim order is not granted, it will be difficult or impossible for Justice to be served at a later stage; and
d. The balance of convenience is in favor of the Applicant.

Types of Interim Order that Cyprus Courts Can Issue

(1) Freezing Injunctions (Mareva)

Freezing injunctions over assets in any part of the world can be issued upon a successful application, including both tangible (immovable property only if situated in Cyprus) and intangible assets (i.e. funds, deposits, shares, goods).

(2) Injunctions Preventing Acts or Events from Taking Place

Cyprus Courts can issued interim orders preventing various acts or events, such as for example the implementation of corporate resolutions, the convening of Annual General Meetings (or EGMs) of companies, etc. These types of interim orders are often issued within the context of shareholders’ disputes or derivative actions.

(3) Discovery Orders (Norwich Pharmacal)

In the context of such applications, Cyprus Courts can issue inter alia orders:

(a) For disclosure an oath by a respondent of the location and value of his assets; and
(b) For tracing purposes, namely leading to the disclosure of information and documents regarding assets deprived or stolen from the Applicant, so as to enable the person having suffered harm from identify and pursue proceedings against the real tort feasor;

(4) Appointment of Interim Receiver or Administrator

Under the appropriate circumstances, Cypriot Courts may be seized and have jurisdiction to issue an order appointing an Interim Receiver or Administrator of assets, in the form of an ancillary relief in support of the protective regime imposed by a freezing order or any other interim order.

In issuing the said order, the Court will instruct the applicant to secure by a bank guarantee the fees of the receiver to be appointed, in addition to the counter-security needed to secure the losses of the Respondent, in case the order is reversed at a later stage. The latter is a common requirement for all interim orders issued by a Cyprus Court.

The Court will further stipulate in the order the powers, duties and rights of the Interim Receiver. On a number of occasions this Receiver will be able to exercise voting rights in holding companies in order to protect assets held by their subsidiaries.

(5) “Chabra” or Garnishee Orders

“Chabra” (or Garnishee) Interim Orders are injunctions issued by Cyprus Courts against a defendant other than the main defendant, where there are reasonable grounds to believe that such a co-defendant is in a possession or control of assets to which the principal defendant, is beneficially entitled. Such an exceptional order is granted to prevent subsequent losses to the claimant applying for such order.

If the Court is satisfied on a prima facie basis that such assets are in the possession or control of the co-defendant a “Chabra” Order can be issued freezing or blocking the said assets in the hands of the co-defendant as ancillary and incidental to the main claim against the principal defendant, despite there being no direct cause of action against such co-defendant.

(6) Search Orders (Anton Piller)

Anton Piller Orders constitute interim orders issued by Cyprus Courts which order a party to admit another party to the former party’s premises for the purpose of preserving evidence or property which is or may become the subject matter of the main proceedings.
Among other grounds and situations, Anton Piller Search Orders may be pursued by a party so as to:

(a) allow this party him to discover and preserve evidence against the defendant which is in the possession of the defendant and it is likely to be concealed or destroyed by the latter;
(b) identify and to obtain evidence against others who have been involved with the principal tortfeasor in the tortuous activities;
(c) prevent the defendant from warning others to destroy or conceal evidence;
(d) unveil further ham and damage to the applicant.

(7) Interim Orders in Aid and/or Support of International Commercial Arbitration

Cyprus Court have jurisdiction to grant interim orders in aid and/or in support of international commercial arbitration proceedings conducted or to be conducted in Cyprus or overseas. Applying for such orders can be pursued on an ex-parte urgent basis (as is the case in all interim orders).

(8) Interim Orders in Aid and/or Support of Court or Arbitration Proceedings in other EU Member States

Pursuant to Article 31 of Regulation (EC) No. 44/2001 Cyprus Courts are enables to issue any time interim order in aid and/or in support of court proceedings pending before the Courts of an EU Member State.

The European Court of Justice has held that the above stated provision grants national Courts such as Cypriot Courts jurisdiction over issuing interim relief in court and arbitration proceedings pending in another EU Member State.

Generally speaking in relation to points (7) and (8) above, Cypriot Courts have jurisdiction to issue interim orders in support and/or in aid of the following proceedings:

(a) Judicial proceedings pending before Cyprus Courts;
(b) Arbitration proceedings pending in Cyprus;
(c) Judicial proceedings pending before national courts of any EU Member State (excluding Denmark); and
(d) International Commercial arbitration proceedings to be filed or pending in any State (EU and non-EU).

In all of the above cases, an Applicant and its Lawyers must present their case to the Court by disclosing all material facts and documents fully and honestly. If such a condition is not satisfied, the sought remedy will likely be refused or quashed at a later stage.

Each case is factually and legally different and our Advocates attend to researching, drafting and presenting each case on its own particular merits. Our renowned track record on obtaining exceptional interim orders illustrates our Firm’s expertise in this field.

ABOUT THE AUTHOR: Anastasios Antoniou
Anastasios Antoniou LLC is a boutique Cyprus law firm with an expert focus on financial services law, investment funds, competition law, commercial and corporate law and IP and energy law. What sets our Firm apart is its commitment to the provision of comprehensive legal solutions to contemporary legal challenges in a clear, reliable and unequivocal manner.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.