The beneficial corporate tax rate coupled with other favourable tax provisions have long established Cyprus as one of the most attractive holding company jurisdictions and a sought-after location for the worldwide business community. Given the aforesaid attractive features of Cyprus and the business traffic created as a result, the existence of disputes with an international element was inevitable.
In such commercial disputes, where usually multi-jurisdictional corporate structures as well as foreign defendants are involved, there is a strong call for efficiency and speed for service of judicial documents. Cyprus, has to its advantage as well as that of the parties, an extensive service regime, which enables out-of-jurisdiction service to take place, and so securely. Whenever a Cypriot Court has jurisdiction over a foreign defendant, the method of service depends on which country the defendant is residing in.
Service of a claim in Cyprus can be effected at EU level pursuant to Council Regulation (EC) 1393/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters and at international level pursuant to the Hague Convention of 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. Moreover, Cyprus has entered into bilateral treaties that regulate service of judicial documents with many countries including, inter alia, Russia, Ukraine, China, Germany and Greece.
How do the Cyprus Courts approach service through the aforementioned methods? So far the Courts tend to take a strict and robust approach when deciding whether there has been a violation of the terms of a bilateral treaty whereas when deciding whether there has been a breach of the EU Regulation they tend to adopt a more liberal and flexible approach, escaping from the usual strict and formalistic frameworks of the past.