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The amendment of the International Commercial Arbitration Law (L.101/1987) – A step closer to having a seat at the table

Last February the International Commercial Arbitration Law (L.101/1987) (the “Law”) underwent a vast revision by adopting almost in its entirety the revised UNCITRAL Model Law as amended in 2006.

Perhaps the most significant amendment is the replacement of Article 17 with “Part IV (Α) – Interim Measures”. The said part awards the arbitral tribunal the power to grant interim measures subject to a number of conditions/requirements, which shall be discussed below. However, if the arbitration agreement expressly prohibits the obtainment of such interim measures, then the tribunal shall not grant them.

In regards to the requirements that an applicant must fulfil in order to be granted such interim relief, those are set out in Article 17(A). More specifically, the arbitral tribunal must be satisfied that (i) in case the sought interim measure is not granted, the loss inflicted will not be sufficiently compensated by an award for damages and (ii) there is a “reasonable possibility” that the applicant’s claim shall succeed on its merit.

Article 17(B) provides that in the absence of a term of the arbitration agreement which prohibits it, any party may ask for the issue of an interim measure including a preliminary order as a precaution in an effort to halt the other party from taking any actions that may jeopardize or cancel the purpose of the interim measure. Continuing, Article 17(C) sets out all necessary requirements and conditions that must be satisfied in order for the tribunal to award such a preliminary order.

In addition, according to the provisions of Article 17(D), any party can apply for, or in special circumstances the arbitral tribunal itself, may amend, suspend and/or terminate any interim measure and/or preliminary order which was granted.  Moreover, according to Article 17(E) an arbitral tribunal may, if it deems it necessary, order the party seeking an interim measure to provide adequate security in relation to the interim measure in question.

Article 17(F) grants the arbitral tribunal the discretion to ask at any point from any party to immediately disclose any serious change to the circumstances on which the tribunal based its ruling to grant the interim measure. Article 17(F) also provides that the applicant is obligated to disclose to the arbitral tribunal all the circumstances that may relate to the issue of the interim measure and such obligation remains until the party against whom the interim measure is sought, has the chance to present his/her case.

In relation to costs, according to Article 17(G) the applicant shall bear the costs and damages that may be caused by the measure or by the order, if at a later stage, the arbitral tribunal decides that under the circumstances they should not have been granted.

Additionally, Article 17(H) provides that an interim measure which was granted by an arbitral tribunal is binding and unless otherwise provided, shall be deemed executable/enforceable by an application to the competent Court, notwithstanding the country of issue. While, Article 17(I) sets out the conditions according to which the enforcement of such an interim measure and/or preliminary order may be rejected by the Court in question.

Finally, the last provision of the said article is found in 17(J) which highlights the authority of a competent Court to issue similar interim measures upon the request of any party, provided that the Court in question has the necessary jurisdiction to do so.

The last noteworthy amendment to the Law is found in the alteration of Article 35(2), according to which, the party seeking the enforcement of an interim measure and/or order, is obligated to just file either the original award or a copy of, instead of also having to file the arbitration agreement in question.

The above drastic amendment of the Law has been long due, and aligns perfectly with the current move towards Arbitration. Such move undoubtedly materialises in the said amendments in a clear effort to support the conversion of Cyprus into a mainstream arbitration seat and a preferred choice for alternative dispute resolution worldwide.

Our firm is fully equipped to guide you through the process of arbitration and help you achieve your preferred outcome in a much quicker and cost-effective way.