On 12 of May 2022, the House of Representatives in Cyprus legislated for the establishment of two independent courts of first instance, namely the Commercial Court and Admiralty Court, by passing Law 108/2019 on the Establishment and Functioning of a Commercial and Admiralty Court (the “Law”).

Prior to the commencement of the Law, the House of Representatives, voted to amend the constitution and in particular article 4(3), so as to allow for the proceedings to be conducted in the English language when the interests of justice so require at the request of one of the parties. Save to say that Greek and Turkish remain the official languages of the courts.

Commercial Court

The Commercial Court will have non-exclusive jurisdiction to determine “commercial disputes” (a) over €2.000.000; and (b) of any amount relating to arbitration, intellectual property and competition law.

Article 2 of the Law defines a “commercial dispute” as a dispute relating to:

• Commercial documents or contract;
• Purchase, sale, import, export of goods;
• Transport of goods by land, air or pipeline;
• Exploitation of oil, gas or other natural resources;
• Insurance and reinsurance;
• Market operation or transfer of shares or other financial or investment instruments;
• Provision of services except for medical and other related services or any service pertaining to an employment contract;
• Manufacturing of vehicles;
• Commercial agency;
• Competition;
• Shareholder disputes that are regulated by any supervisory authority in the Republic;
• Intellectual property and related rights;
• Arbitration.

Cases pending before the District Court which come within the scope of the “commercial dispute” can be transferred to the Commercial Court where the hearing is yet to commence. It must be noted, however, that the Law is silent as to whether the consent of all parties is a prerequisite for the transfer and on the principles to be applied by the District Court judge in deciding on the transfer. Similarly, a case pending before the Commercial Court may be transferred to the District Court where the hearing is yet to commence. In relation to the latter, a Commercial Court judge may transfer the case to the District Court if he or she considers that he or she lacks jurisdiction to determine the dispute in question or upon the application of one of the parties. Again, the Law is silent as to the principles to be applied by the Commercial Court judge in deciding on the transfer upon the application of one of the parties.

Admiralty Court

The Admiralty Court will have exclusive jurisdiction to hear maritime disputes of any amount relating to:

• Ownership, or possession of a vessel;
• Mortgage or lien over a vessel;
• Disputes between co-owners over profits, possession, or employment;
• Collision or damage caused by or to a vessel;
• Death or personal injury of any person arising from any matter or circumstance connected to the vessel;
• Loss or damage to goods carried by the vessel or disputes arising out of a contract for the carriage of goods;
• Salvage or any assistance to a vessel;
• Goods and services provided to a vessel;
• Crew employment;
• Ship building, repair, equipment, berth charges or other charges;
• Ship expenditure;
• Towage or pilotage;
• Ship arrest.

The establishment of the new two courts intends to alleviate the caseload of the district courts when dealing with commercial and shipping disputes and provide speedy adjudication. The option for litigating in English is expected to enhance the competitiveness of Cyprus as a service hub and to attract foreign investments, thus contributing substantially to the island’s economic growth. To this end, the Law provides that first instance disputes, irrespective of any connection to Cyprus, if jointly decided by a written agreement, can be referred to and resolved by the Commercial Court or Admiralty Court (as the case may be).

The date of commencement of operation of the Commercial and Admiralty Courts will be announced by the Supreme Court. From that date any pending commercial disputes which have not reached the hearing stage may be transferred to the Commercial Court upon the application of the parties, while pending admiralty cases which have not reached the hearing stage will be transferred to the Admiralty Court for the continuing of the case.

The information provided by A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.

For further information please contact us.