The International Commercial Arbitration Law (L.101/1987) (“Law 101/1987”), which governs international commercial arbitrations in Cyprus, has been recently amended by the International Commercial Arbitration (Amending) Law of 2024 (Law 11(I)/2024) (“the Amending Law”) which was published in the Official Gazette on 23.02.2024.
With the latest amendments, Law 101/1987 has been essentially evolved to a nearly identical adaptation of the revised UNCITRAL Model Law, as this was amended in 2006.
This consequently brings Cyprus into alignment with other prominent destinations in the field and establishes it as an attractive seat for international commercial arbitration proceedings in the future.
Amongst the amendments, Article 17 of Law 101/1987 on interim measures has been extensively revised with the adoption of a whole new chapter IV (A). The extensive revision provides for a more comprehensive legal framework relating to interim measures in support of arbitration proceedings.
Prior to the Amending Law, Article 17 of Law 101/1987 simply provided for the tribunal’s power to grant interim relief, unless the arbitration agreement expressly prohibited it, without any precise guidelines as to the procedure to be followed and other details thereof.
The newly introduced chapter expressly empowers the tribunal to grant interim measures (unless the arbitration agreement expressly prohibits it) and further provides for the conditions for granting such measures and provisions for their recognition and enforcement.
Article 17A of the Amending Law provides that the applicant must show:
(a) a "reasonable possibility" that the applicant will succeed on the merits of the claim,
(b) that an award for damages would not adequately repair the harm that applicant seeks to avoid with the request for interim measure and,
(c) the potential harm to the applicant substantially outweighs the likely harm to the other party if the measure is granted.
The parties may also file an application for preliminary orders pursuant to Article 17B, that are used as a means of preserving the status quo until an interim order is granted by the tribunal, either adopting or modifying the preliminary order. The conditions for granting such preliminary orders and details of the specific regime surrounding their issuance are stipulated in the new Articles 17B and 17C.
The arbitral tribunal has discretion to modify, suspend or terminate an interim measure or a preliminary order granted, upon the application of any party or even on its own initiative in exceptional circumstances and upon prior notice to the parties (Article 17D).
In addition, the tribunal may order the party requesting an interim measure to provide appropriate security whereas such security would generally be deemed necessary from the party applying for a preliminary order unless the arbitral tribunal considers it inappropriate or unnecessary to do so (Article 17E).
Article 17F provides for the disclosure duties of the parties applying to the Court for preliminary measures and Article 17(Ι) sets out the guidelines in relation to costs and damages.
The tribunal’s orders may be enforced upon application to the competent court. The new Articles 17 (H) and (I) provide for the enforcement regime for such measures. An interim measure issued by the arbitral tribunal is considered to be binding and may be enforced provided that it is aligned with the provisions of the Law on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Ratification), Law. 84/1979 and that it does not fall under the grounds for refusing the recognition or enforcement of interim measure as these are set out in Article 17 (I).
Article 17 (J) maintains the party’s right to apply to court for interim relief. This provides that the existence of an arbitration agreement does not infringe on the powers of the competent court to issue interim measures and that the party to the arbitration agreement may seek interim measures from the Court.
Lastly, it is further worth noting that Article 35 (2) has also been amended and abolishes the obligation of party relying on an award or applying for its enforcement, to submit the arbitration agreement to the Court. Such party shall only supply the Court with the original award or a copy thereof. If the award is not made in an official language, the court may request the party to supply a translation thereof into the official language of the Cyprus Republic.
The aforementioned changes indicate another step towards the transformation of the arbitration landscape in Cyprus and clearly demonstrate the efforts taken to position the island as a key hub for international commercial arbitrations.