It is a common procedure to submit disputes arising out of international contracts to arbitration. Arbitration is a consensual legal technique, which has developed recently in Cyprus as a form of dispute resolution in various industries, which gives the opportunity to parties to resolve issues without the necessity to refer the matter to Court. This article deals with the recognition and enforcement of foreign arbitral awards in Cyprus. Once an arbitral award is granted, the winning/successful party will seek to enforce it in the country in which the losing party has financial assets.
Arbitral awards are enforceable in Cyprus under the provisions of the Cypriot Law on International Arbitration in Commercial Matters Law No. 101/1987 and the ‘New York Convention’ on the Recognition and Enforcement of Foreign Arbitral Awards of the United Nations of 1958. As a signatory to the Convention, Cyprus is bound to enforce awards made in foreign states which are signatories to the Convention.
The enforcement of a foreign arbitral award can be effected by filing an application by summons by the party seeking its enforcement, i.e. the judgment creditor. All the Methods of Execution of Cypriot Court judgments are available to the execution of such awards, provided that the Court accepts its recognition & enforcement.
Under Article IV of the Convention and 35 of Law No. 101/87, in order to obtain recognition and enforcement of an arbitral award in Cyprus, the successful party must apply in writing and supply the Court with the following documents:
a. The duly authenticated original award or a duly certified copy thereof;
b. The original agreement or a duly certified copy thereof.
If the arbitral award and/or the agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent. The New York Convention does not address whether the translator needs to be sworn in or officially appointed and from which country the diplomatic/consular agent should originate.
There is unanimous agreement that the translation certified by a sworn translator in, or a consular agent of, the country where the enforcement is sought is sufficient. Thus, if the country where enforcement is sought is Cyprus then the above documents can be translated and certified by the Press and Information Office of Cyprus (“PIO”).
The requirement of submitting a translation of the award and arbitration agreement written in a foreign language enables the enforcing Court to better understand their contents. If the arbitration clause is contained in a contract, there is no need to provide a translation of the entire contract. Only the relevant provisions containing the agreement to arbitrate need to be translated. However, the arbitration award must be translated in its entirety, with the exception of dissenting opinions.
The above provisions relating to recognition and enforcement of foreign arbitral awards are very important for the successful party because the biggest hurdle which needs to be overcome is the execution of the award.
According to Section 9 of the International Commercial Arbitration Law 101/87, a Court in Cyprus has power, upon application of any party in arbitration proceedings, to grant interim relief any time prior to the commencement or during the arbitration proceedings. The creditor may therefore, in the meantime, also apply for interim reliefs, i.e. freezing orders, blocking assets held by the judgment debtor. The aim and/or necessity to apply for an interim relief relates to the prevention of the judgment debtor/respondent from transferring any amounts from his/her bank account in Cyprus so that if the arbitral award is successfully registered and enforced, the said amounts in the bank account to be used in order to satisfy the creditor’s claim.
