• Cyprus Courts Do Not Have Jurisdiction to Recognise and Register Foreign Arbitration Awards When neither the Applicant nor the Respondent Has Its Domicile in Cyprus
  • June 17, 2015 | Author: Soteris Flourentzos
  • Law Firm: Soteris Flourentzos & Associates LLC - Limassol Office
  • The Applicant Company filed in the District Court of Nicosia an Application seeking the registration and recognition of an arbitration award granted by the Korean
    Commercial Arbitration Board. That Application went uncontested by the Respondent Company, and an Order was issued by the District Court of Nicosia registering and recognizing the said arbitration award as a Cyprus Court judgement. Later, the Applicant Company filed an ex parte application for a writ of attachment of property in the hands of the third person, that is the amount of USD $ 48 million, for execution purposes against the Respondent Company.

    Once the relevant writ of property in the hands of the third person was served, the Respondent Company filed an application for a prerogative order of the Supreme Court of Cyprus against the ex parte issue of the said writ of attachment. The only argument of the Respondent Company was that the District Court of Nicosia lacked jurisdiction to issue such an order because neither of the parties had their legal seat within Cyprus (the Applicant Company is based in Korea and the Respondent Company in China), which is one of the requirements of the Law on Judgments of Foreign Courts (Recognition, Registration and Execution) No. 121(¿)/2000.

    The Supreme Court accepted this argument, that the jurisdiction of a District Court derives from the domiciliation of the respondent, within the district that the Court is situated. The absence of any connection of the two Companies with the Nicosia District demonstrated the lack of jurisdiction of the District Court to issue in the first place the Order for the recognition and registration of the Arbitration Award, rending the whole procedure illegal.

    Consequently, the Supreme Court cancelled the writ of attachment of property in the hands of the third person issued in the context of the Application for recognition and registration of the Arbitration Award.

    This is the first case that the Supreme Court of Cyprus interpreted the relevant provision of the Law on Judgments of Foreign Courts (Recognition, Registration and Execution) No. 121(¿)/2000, that an Arbitration Award in order to be recognized by the Cyprus Courts either of the parties must have its domicile in Cyprus and the existence of assets of such party within the jurisdiction of Cyprus does not satisfy this requirement.