Cyprus Emerges as a Leading Jurisdiction for International Civil Fraud Litigation
Combating White-Collar Crime and Recovering Misappropriated Funds
In an effort to combat white-collar crime and recover misappropriated funds, Cyprus has established itself as a premier destination for international civil fraud litigation. The country’s courts have demonstrated their willingness to grant various types of interim relief orders to support foreign proceedings, making it an attractive option for claimants seeking to recover assets.
Powers of the Cypriot Courts
The Cypriot courts have the power to issue:
- Ancillary orders
- Pre-action disclosure orders
- “Chabra” orders, which freeze assets held by third parties on behalf of defendants
- Search orders, also known as “Anton Piller” orders, allowing for the seizure of documents and evidence from premises located in Cyprus
Effectiveness in High-Profile Cases
The jurisdiction’s ability to issue these orders is rooted in its common law system, which provides a range of tools for claimants to recover assets. The Cypriot courts have demonstrated their effectiveness in granting such orders in high-profile cases, including JSC BTA Bank v Ablyazov, which involved the recovery of over $4 billion in misappropriated funds.
Strengths of the Cyprus Judicial System
- Versatility and effectiveness in handling complex international civil fraud cases
- Ability to grant a range of orders, including worldwide “Chabra” orders, search orders, recognition orders, disclosure orders, injunctions, and intervention orders
- Combination of common law system with the advantages of being an EU member state
- Cypriot judgments and orders are automatically recognized and enforced in all other EU member states, as well as in many non-EU countries with which Cyprus has bilateral agreements
Impact of Brexit
The impact of Brexit is also expected to increase the number of international civil fraud cases coming before the Cypriot courts. The absence of provisions in the UK’s and EU’s Trade and Cooperation Agreement regarding jurisdiction and the enforcement of judgments means that claimants seeking to recover assets may have few options other than to bring their claims in a common law court, such as Cyprus.
Future Prospects
As Cyprus continues to modernize its judicial system and introduce reforms aimed at ensuring cases are dealt with expeditiously and fairly, it is well-positioned to become an even more attractive destination for international civil fraud litigation. With its unique combination of common law and EU membership benefits, Cyprus is poised to rise to the challenge and establish itself as a leading jurisdiction in this area.