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Cyprus: A Jurisdiction of Choice for Civil Fraud Litigation
In a significant development, Cyprus has emerged as a leading jurisdiction for civil fraud litigation, offering a wide range of interim orders to support both domestic and foreign proceedings. The country’s courts have the power to grant various interim relief, including worldwide freezing orders, ancillary orders for asset disclosure, pre-action disclosure orders, disclosure orders, ‘Chabra’ orders, and search orders.
Wide Range of Interim Orders
The Cypriot courts have demonstrated a willingness to grant a broad range of interim orders to support civil fraud proceedings. These orders include:
- Worldwide Freezing Orders: restraining the transfer or disposal of assets worldwide;
- Ancillary Orders for Asset Disclosure: requiring parties to disclose their assets, including those located outside Cyprus;
- Pre-Action Disclosure Orders: ordering the disclosure of information and documents held by third parties;
- Disclosure Orders: requiring the production of bank statements and other information;
- ‘Chabra’ Orders: freezing assets held or controlled by third parties; and
- Search Orders: permitting the search of premises and the removal of documents and information.
Power to Grant Interim Relief in Support of Foreign Proceedings
The Cypriot courts have the power to grant interim relief in support of foreign proceedings, both within the European Union (EU) and beyond. This is in accordance with Article 35 of the Recast Brussels I Regulation, which provides that EU member states may grant interim relief even if another member state has jurisdiction over the substantive matter.
Case Law
In order for a Cypriot court to exercise its power to grant interim relief in support of foreign proceedings, it must establish that there is a genuine connection between the Cypriot courts and the foreign proceedings. This can be achieved through the use of connecting factors such as the location of assets, the presence of witnesses, or the involvement of Cypriot parties.
Cyprus: A Jurisdiction of Choice for International Civil Fraud Litigation
Cyprus’s common law system and its ability to grant interim relief in support of foreign proceedings make it an attractive jurisdiction for international civil fraud litigation. The country’s courts have a proven track record of handling complex and high-stakes cases, and its unique combination of common law and EU laws provides a level of certainty and predictability that is hard to find elsewhere.
The Effects of Brexit
The United Kingdom’s (UK) departure from the EU, commonly referred to as Brexit, has created uncertainty in the area of jurisdiction and judgment enforcement. The UK’s and EU’s Trade and Cooperation Agreement does not provide for automatic recognition and enforcement of judgments between the two parties. This means that there are few options available for litigants seeking to bring a claim before a common law court and enjoy the benefits of EU-wide automatic recognition and enforcement.
Conclusion
Cyprus is well-positioned to take advantage of this uncertainty and capitalize on its unique strengths as a jurisdiction. With significant reforms and innovations currently being introduced, the Cypriot courts and litigators will be better-equipped to rise to the challenge of handling complex international civil fraud cases.
Authors
- Alexandros Gavrielides is a partner at SCORDIS, PAPAPETROU & Co LLC.
- Christos Scordis is a partner at SCORDIS, PAPAPETROU & Co LLC.