International Arbitration

Arbitration in Cyprus is governed by a multi-tiered legislative framework:

• New York Convention 1958: Incorporated into Cypriot law via the Ratification Law (84/1979), the convention has superior force under Article 169(3) of the Constitution. Cyprus applies the convention on the basis of reciprocity and only to commercial disputes.
• International Commercial Arbitration Law (ICAL) (101/1987): This law, based on the 1985 UNCITRAL Model Law, governs international commercial arbitrations subject to any bilateral treaty effective Cyprus. The recent Amending Law of 2024 (11(I)/2024) aligns the framework with the 2006 amendments to the UNCITRAL Model Law. It introduces express provisions for interim measures and the recognition/enforcement of such measures.
• Arbitration Law (Cap 4): This law governs domestic arbitration and is modelled on the English Arbitration Act of 1950.
• Law on the Recognition and Enforcement of Foreign Judgments (121(I)/2000): This law applies to awards issued in countries with which Cyprus has bilateral/multilateral enforcement treaties. This procedure is now also codified in Section II, Part 44 of the new Civil Procedure Rules (CPR), effective as of September 2023.

Additionally, Cyprus is a party to:

• the Convention on the Settlement of Investment Disputes between States and Nationals of Other States;
• the Energy Charter Treaty; and
• multiple bilateral investment treaties (BITs) providing for investor-state arbitration.

Under Section 7(2) of Law 101/1987, arbitration agreements must be in writing to be valid. Oral agreements are not recognised under the statutory regime.

Cypriot law clearly distinguishes between domestic and international arbitration:

• The Arbitration Law governs domestic arbitrations. The Arbitration Law is modelled on the English Arbitration Act 1950.
• ICAL governs international commercial arbitrations. ICAL is based on the UNCITRAL Model Law (1985) and was amended in 2024 to align with the UNCITRAL 2006 amendments.

ICAL: Under Section 3(2), arbitration is ‘international’ if:

• the parties have their places of business in different states;
• one of the following is situated outside the state in which the parties have their places of business:
• • the place of arbitration (if specified in or pursuant to the arbitration agreement); or
  • the place where a substantial part of the obligations is to be performed or which is most closely connected to the subject matter of the dispute; or
• the parties have expressly agreed that the subject matter of the arbitration relates to more than one country.

Section 2(3) of ICAL provides that arbitration is commercial when it concerns matters arising from relationships of a commercial nature, whether contractual or not. These include:

• commercial contracts;
• distribution agreements;
• licensing;
• investment transactions;
• banking and finance agreements;
• joint ventures; and
• construction and engineering projects.

This broad definition ensures that a wide range of cross-border business disputes fall under the international commercial arbitration regime.

Arbitration Law: This applies where the arbitration lacks an international element – that is, where:

• the parties are Cypriot; and
• the subject matter and performance are located within Cyprus.

The Arbitration Law contains more traditional procedural rules, including provisions for the intervention of courts at various stages. There is:

• limited autonomy compared to international arbitration; and
• more potential for judicial oversight.

Yes. ICAL is based on the UNCITRAL Model Law (1985) and, as discussed in question 2.1, ICAL was amended in 2024 and is now closely aligned with the 2006 version of the Model Law.

Key provisions of the legislative framework are mandatory. These include:

• judicial powers over arbitration proceedings;
• grounds for setting aside an award;
• formal requirements for the recognition/enforcement of awards; and
• the procedure for court applications under the CPR.

Yes. Recognising the need for a unified arbitration framework, a draft bill – the Arbitration Law of 2024 – is currently under consideration. This bill aims to repeal both the Arbitration Law and ICAL, establishing a single legislative framework.

The proposed consolidated law reflects Cyprus’s commitment to enhancing its arbitration framework, making it more accessible, efficient and aligned with international best practices.

That said, recent legislative developments in Cyprus must also be acknowledged, as they mark a decisive shift towards modernising the arbitration landscape. Notably:

• the International Commercial Arbitration (Amending) Law of 2024:
• • significantly modernised the framework in line with international standards, particularly UNCITRAL’s 2006 amendments; and
  • introduced enhanced provisions on interim measures and tribunal powers.
• The jurisdiction of the Commercial Court (to be established) encompasses arbitration-related commercial disputes, ensuring greater judicial expertise and consistency in handling such matters.
• The CPR have introduced a codified and structured procedural framework for court-related arbitration matters.

Yes. Cyprus is a contracting state to the 1958 New York Convention, applying it with the following reservations:

• Cyprus applies the convention on the basis of reciprocity.
• It also applies the convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under its national law.

Yes. In addition to the New York Convention, Cyprus is a party to:

• the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, since 1966;
• the Energy Charter Treaty – a multilateral agreement that provides a legal framework for energy cooperation; and
• several BITs with various countries to promote and protect investments. These treaties typically provide for:
• • fair and equitable treatment;
  • protection against expropriation; and
  • access to international arbitration for dispute resolution.

The issue of arbitrability is not directly or comprehensively addressed by legislation. While the International Commercial Arbitration Law (ICAL) follows the UNCITRAL Model Law and applies only to disputes that may be settled by arbitration, the Arbitration Law contains no general provision on arbitrability.

Where there is a written arbitration agreement (see question 3), commercial matters are generally presumed arbitrable. This presumption is subject to exceptions. Disputes concerning the following are excluded from arbitration:

• title to real estate;
• competition matters; and
• matters which legislation reserves to the courts (eg, insolvency, bankruptcy and winding-up proceedings or applications for rectification of a company’s register)

Article 9(2) of the Arbitration Law also permits the court to set aside an arbitration agreement in cases involving fraud; while Article 33 expressly excludes the application of the law to proceedings conducted under the Trade Disputes (Conciliation, Arbitration and Inquiry) Law.

In all other cases, the courts apply common law principles, with a general presumption in favour of arbitration unless the dispute falls within a legally excluded category. These include:

• matrimonial and family disputes;
• matters involving minors;
• criminal proceedings; and
• cases involving public policy.

There are no statutory restrictions in Cyprus on the choice of seat of arbitration.

The primary formal requirement for the validity of an arbitration agreement is that it must be in writing. This requirement is set out in both:

• Section 2 of the Arbitration Law; and
• Section 7 of the International Commercial Arbitration Law (ICAL).

According to the recently amended Section 7 of ICAL, an agreement is deemed to be in writing if it is contained:

• in a document signed by the parties or in any other communications that provide a record of the agreement; or
• in pleadings where the existence of an arbitration agreement is alleged by one party and not denied by the other.

Further, a contract that refers to another document containing an arbitration clause is deemed a written arbitration agreement if the reference is such as to make that clause an integral part of the contract. The amended law expands the definition of ‘in writing’ to include electronic communications, as long as the information contained therein is accessible and usable for future reference. The term ‘electronic communication’ covers any form of communication between the parties achieved through data messages, including email and electronic data interchange.

Yes. The doctrine of separability is expressly recognised in Cyprus under Section 16(1) of ICAL. It provides that an arbitration clause forming part of a contract is treated as a separate agreement, independent of the other terms of the contract. Hence, a decision by the arbitral tribunal that the main contract is null and void does not automatically render the arbitration clause invalid.

Yes, ICAL contains express provisions on both the seat and language of arbitration where the parties have not reached an agreement.

According to Section 20(1), the parties are free to agree on the seat of arbitration. In the absence of such agreement, the arbitral tribunal will determine the seat, taking into account:

• all the circumstances of the case; and
• the convenience of the parties.

Additionally, Section 20(2) allows the tribunal, unless otherwise agreed by the parties, to:

• hold hearings;
• examine witnesses or experts; and
• inspect or review documents at any location it deems appropriate, regardless of the designated seat.

As for the language, Section 22(1) provides that the parties may freely choose the language or languages of the arbitration. In the absence of such agreement, the arbitral tribunal will decide on the language of the proceedings.

Under Section 16(2) of the International Commercial Arbitration Law (ICAL), a party must raise an objection to the jurisdiction of the arbitral tribunal no later than the submission of its statement of defence. Participation in the appointment of an arbitrator does not amount to a waiver of the right to object. An objection that the tribunal has exceeded its jurisdiction must be raised as soon as the issue arises during the proceedings, unless any delay can be justified. The tribunal may decide on the objection in either:

• a preliminary ruling; or
• its final award.

Yes. Pursuant to Section 16 of ICAL, an arbitral tribunal is competent to rule on its own jurisdiction, including any objections to the existence or validity of the arbitration agreement. While the Arbitration Law does not contain an equivalent express provision, Cypriot courts have generally recognised the tribunal’s competence to decide on jurisdiction in domestic arbitrations.

Yes. Under Section 16(3) of ICAL, if the arbitral tribunal issues a preliminary or final ruling affirming its jurisdiction, the objecting party may apply to the competent court for a decision on the matter. This application must be filed within 30 days of the date on which the ruling was communicated to the party. The court’s decision is final and not subject to appeal. While the application is pending, the arbitral tribunal may continue the proceedings and issue its final award.

There are no specific statutory restrictions on who may be a party to an arbitration agreement. Arbitration agreements bind only those who have consented to them (see question 3.1).

While the arbitration laws do not expressly impose detailed duties on the parties, Section 18 of the International Commercial Arbitration Law (ICAL) provides that during the arbitration proceedings, the parties:

• have equal rights and obligations, in accordance with the principle of equality; and
• must be given every reasonable opportunity to present and develop their case.

Cypriot law contains no specific provisions governing multi-party arbitration.

Where the parties have expressly agreed on the law governing the arbitration agreement, that choice will be upheld. This is consistent with Section 28(1) of the International Commercial Arbitration Law (ICAL), which provides that the arbitral tribunal will decide the substance of the dispute in accordance with the rules of law chosen by the parties.

In the absence of agreement, Section 28(2) provides that the tribunal will apply the substantive law determined by the rules of private international law (also known as conflict of laws) that it considers applicable to the case.

Yes, the tribunal will uphold a party agreement as to the substantive law of the dispute as stipulated by Section 28(1) of ICAL (see question 6.1). In the absence of such agreement, the tribunal will apply the substantive law determined by the rules of private international law that it considers applicable, pursuant to Section 28(2) of ICAL (see question 6.1).

The consolidation of separate arbitrations is not expressly regulated under the arbitration laws.

With respect to domestic arbitrations, Section 30 of the Arbitration Law provides for the application of the Civil Procedure Rules (CPR) mutatis mutandis in the absence of specific procedural rules. Under Part 3.1 of the CPR, the court has discretion, among other things, to:

• consolidate proceedings; or
• hear multiple claims simultaneously.

This discretion is exercised in line with the overriding objective set out in Part 1 of the CPR, which emphasises:

• fair and cost-effective case management;
• equality of arms;
• efficiency; and
• proportionality.

However, in practice, the consolidation of arbitral proceedings remains uncommon. The absence of a clear statutory framework specific to arbitration and the consensual nature of arbitral proceedings generally limit the instances in which consolidation is pursued.

Under Cyprus law, the joinder of additional parties to arbitration proceedings that have already commenced is generally not permitted without the express consent of the third party in question. This reflects the fundamental principle of privity of contract, which dictates that only those parties that have expressly agreed to be bound by the arbitration agreement may be subject to it.

As a result, arbitral tribunals typically do not have jurisdiction over third parties or non-signatories to the arbitration agreement. These include entities or individuals that have not expressly consented to arbitration, except in limited circumstances (eg, legal successors or assignees) where specific legal relationships may justify an extension of the arbitration agreement’s effect.

Accordingly, unless the third party voluntarily consents to participate or their inclusion is supported by a recognised legal mechanism, they cannot be compelled to join the arbitration.

Please see question 7.2.

As a general rule, arbitration agreements are subject to the principle of privity of contract, meaning that only the parties that have expressly agreed to arbitrate are bound by the agreement. Consequently, arbitral tribunals typically lack jurisdiction over third parties that are not signatories to the arbitration agreement.

Nonetheless, Cypriot law and broader arbitration practice recognise limited exceptions to this rule, including:

• assignees and legal successors, which may be bound by the arbitration clause where rights and obligations under the main contract have been validly transferred;
• trustees in bankruptcy; and
• agents or representatives, in specific cases where agency principles apply.

Accordingly, while assignees and certain successors may be bound by an arbitration agreement, no jurisdiction may be assumed over other third parties unless a clear legal mechanism exceptionally justifies it.

Notwithstanding the above, third parties may, in certain circumstances, be affected by interim measures issued by national courts in support of arbitral proceedings. In particular, Chabra orders (a form of freezing injunction) may be granted against third parties if:

• the third party holds assets beneficially owned by the main defendant;
• the main defendant controls or has power to dispose of the assets;
• there is good reason to suppose that the assets would be amenable to some process, ultimately enforceable by the courts, by which the assets would be available to satisfy a judgment against the main defendant;
• the affairs of the third party against which the injunction is sought are intermingled with the affairs of the main defendant;
• there is risk of dissipation; and
• the claim for the order is ancillary and incidental to the claimant’s cause of action.

These orders do not require a substantive cause of action against the third party but rather serve to preserve assets which may ultimately be used to satisfy an arbitral award.

In Cyprus, parties are free and autonomous to agree on the appointment of arbitrators in the arbitration agreement.

If no such agreement exists, Section 11(3) of the International Commercial Arbitration Law (ICAL) provides a default mechanism:

• Three-member tribunal: Each party appoints one arbitrator and the two appointed arbitrators jointly select the third arbitrator. If a party fails to appoint within 30 days of receipt of a relevant request from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of the date of their appointment, either party may apply to the court to make the appointment.
• Sole arbitrator: If the parties cannot agree on a single arbitrator, the court can appoint one upon application by either party.

Similarly, in domestic arbitration, if a party fails to appoint an arbitrator within seven clear days of receipt of the notice by the other party to do so, the Cyprus courts have the authority to make the appointment, as provided under Section 10(2) of the Arbitration Law.

No statutory restrictions exist regarding the number or qualifications of arbitrators.

Yes, arbitrators in Cyprus may be challenged in both international and domestic arbitration proceedings.

In international arbitration, a party may challenge an arbitrator if:

• there are circumstances that give rise to justifiable doubts as to their impartiality or independence; or
• the arbitrator does not meet the qualifications agreed upon by the parties.

This is expressly provided under Section 12 of ICAL, which imposes a duty on all arbitrators, both before and after their appointment, to disclose any circumstances that may reasonably call into question their impartiality or independence.

A party may not challenge an arbitrator whom it appointed, or in whose appointment it participated, unless the grounds for the challenge became known only after the appointment was made (Section 12(3) of ICAL).

If the parties have not agreed on a challenge procedure, the default process under Section 13(2) of ICAL applies. The challenge must be submitted within 15 days of becoming aware of the relevant circumstances. If the challenge before the tribunal is unsuccessful, the party may refer the matter to the court within 30 days of receiving notice of the rejection. The court’s decision is final and not subject to appeal, and during this time the tribunal including the challenged arbitrator may continue with the arbitration and issue an award (Section 13(3) of ICAL).

The parties may agree to terminate the mandate of an arbitrator if the arbitrator:

• becomes unable to perform their functions, whether de jure or de facto; or
• fails to act without undue delay.

If there is no agreement, any party may request the court to decide on the termination. Again, the court’s decision is final and not subject to appeal (Section 14(1) of ICAL).

In domestic arbitration, the grounds for removal are broader. Under Section 13 of the Arbitration Law, a party may apply to the court to remove an arbitrator or umpire who fails to act with reasonable speed. Further, Section 20(1) of the Arbitration Law allows for removal in case of misconduct:

• by the arbitrator; or
• in the conduct of proceedings.

If misconduct is established, any resulting award may be set aside (Section 20(2) of the Arbitration Law).

If a challenge is successful, a substitute arbitrator is appointed according to the same rules that applied to the original appointment (Section 15 of ICAL).

Arbitrators in Cyprus are subject to several duties, most of which are expressly imposed by legislation under ICAL.

Arbitrators:

• have a continuing duty of impartiality and independence; and
• must disclose without delay any circumstances that may give rise to justifiable doubts as to their impartiality or independence.

This duty applies both at the time of appointment and throughout the proceedings (Section 12(1) of ICAL).

They are also required to treat the parties equally and give each party a full opportunity to present its case, thereby ensuring due process and procedural fairness (Section 18 of ICAL).

In addition, arbitrators must conduct the proceedings:

• in accordance with the procedure agreed by the parties; or
• in the absence of such agreement, in a manner that they consider appropriate (Section 19 of ICAL).

Furthermore, arbitrators:

• must apply the substantive law chosen by the parties or determine the applicable law in the absence of such choice; and
• may decide ex aequo et bono only if expressly authorised to do so by the parties (Section 28 of ICAL).

In domestic arbitration, further duties arise. Section 13 of the Arbitration Law provides that if an arbitrator unjustifiably delays the conduct of proceedings or the issuance of the award, any party may apply to the court to have that arbitrator removed. This ensures that:

• the arbitration is conducted efficiently; and
• unjustified delays are addressed promptly.

In addition, arbitrators:

• often adhere to additional ethical standards such as the International Bar Association Guidelines on Conflicts of Interest in International Arbitration; and
• may also be guided by the standards applied by the courts concerning the impartiality of judicial officers.

While not legally binding, these norms:

• complement the legislative framework; and
• reinforce confidence in the neutrality and integrity of arbitral proceedings.

(a) Procedure, including evidence?

Arbitrators in Cyprus have wide-ranging procedural authority, particularly where the parties have not agreed on specific procedural rules.

Under Section 19(1) of ICAL, the parties are free to agree on the procedure to be followed by the arbitral tribunal. In the absence of such agreement, Section 19(2) of ICAL grants the tribunal the discretion to conduct the arbitration in the manner it deems appropriate, subject to the provisions of the law. This includes the power to:

• determine the procedural timetable and structure of the proceedings;
• decide on whether hearings will be oral or based on written submissions and other materials (Section 24(1) of ICAL);
• rule on the admissibility, relevance, materiality and weight of any evidence presented;
• allow or deny amendments to claims or defences during the proceedings, unless there is an unjustified delay (Section 23(2) of ICAL); and
• ensure that parties receive adequate notice and access to all materials submitted or relied upon (Sections 24(2) and (3) of ICAL).

In addition, tribunals:

• may appoint one or more experts to provide opinions on specific issues (Section 26(1) of ICAL); and
• may require the parties to submit documents or provide access to goods or property necessary for expert review (Section 26(2) of ICAL).

If a party fails to comply with procedural obligations – such as submitting claims or defences or appearing at hearings – the tribunal may proceed to render an award on the basis of the available evidence (Section 25 of ICAL).

Moreover, the tribunal or a party (with the tribunal’s approval) may request assistance from the Cypriot courts in taking evidence, such as compelling witness testimony or document production (Section 27 of ICAL).

In domestic arbitrations, the Arbitration Law does not expressly provide for evidentiary rules; however, unless the parties have agreed otherwise, the tribunal generally follows the Civil Procedure Rules (CPR) applicable to civil litigation, with appropriate modifications to suit the arbitral context. Furthermore, any party may apply to the court to issue a summons compelling individuals to attend the arbitration and give evidence or produce documents (Section 17).

In addition, under Part 44.13 of the CPR, a party to arbitration proceedings may apply to the court for a witness summons under Section 17 of the Arbitration Law or Section 27 of ICAL. The application must be supported by either:

• the consent of the arbitral tribunal; or
• the agreement of all parties involved in the arbitration.

(b) Interim relief?

In international arbitrations seated in Cyprus, arbitral tribunals have robust statutory powers to grant interim measures, following the 2024 amendment of ICAL (International Commercial Arbitration (Amending) Law of 2024 (11(I)/2024)).

This amendment incorporated Chapter IV A of the 2006 UNCITRAL Model Law, significantly expanding the tribunal’s authority in this area.

Among the amendments, Section 17 of ICAL provides that, unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, issue interim measures at any time before the final award. These measures may take the form of procedural orders or awards and may include orders to:

• preserve or restore the status quo pending resolution of the dispute;
• prevent imminent harm to the arbitration process;
• secure assets to satisfy a potential award; or
• protect or preserve evidence relevant to the proceedings.

Notably, Article 17H also introduces a Cypriot-specific requirement that interim measures comply with the New York Convention as ratified under Law 84/1979.

In parallel, the courts in Cyprus retain the authority to grant interim relief in support of arbitration, both before and during the proceedings. Under Section 9 of ICAL, the courts may issue protective measures such as injunctions or freezing orders, even prior to the commencement of the arbitration proceedings.

In addition, Section 17J of ICAL expressly provides that the courts:

• have the same powers to issue interim measures in aid of arbitration as in court proceedings; and
• must exercise this authority with due regard to the international nature of arbitration.

Moreover, interim measures in support of the arbitration proceedings can also be issued under the Recast Brussels Regulation (1215 /2012).

In domestic arbitration, arbitrators do not have statutory authority to grant interim relief under the Arbitration Law. Nonetheless, the Cypriot courts, without prejudice to any powers that the arbitrators may have to issue orders, may grant various forms of interim relief in support of the arbitration proceedings. These are set out in the Arbitration Law and include the following:

• setting aside interim relief granted by the arbitral tribunal;
• ordering security for costs;
• granting discovery of documents and interrogatories;
• ordering the taking and preservation of evidence;
• authorising the maintenance, storage or sale of goods that are the subject matter of the arbitration;
• securing the amount in dispute;
• ordering the detention, preservation or inspection of property related to the arbitration; and
• granting other forms of interim relief, including the appointment of a receiver.

(c) Parties which do not comply with its orders?

Arbitral tribunals in Cyprus do not have coercive enforcement powers but are empowered to proceed with the arbitration and rely on judicial support where necessary.

Under Section 25 of ICAL, if a party fails to comply with its procedural obligations – such as submitting the statement of claim or defence, attending a hearing or producing documents or evidence – the tribunal may continue the proceedings and issue an award based on the evidence before it.

In addition, under Section 27 of ICAL, either the tribunal or a party (with the tribunal’s approval) may apply to the Cypriot courts for assistance in taking evidence. This may include functions that the tribunal cannot enforce on its own, such as:

• compelling witness testimony;
• ordering the production of documents; or
• securing physical evidence.

(d) Issuing partial final awards?

Although Cyprus law does not expressly refer to ‘partial awards’, in principle, arbitral tribunals can issue partial final awards.

A partial final award may be issued on a distinct issue or claim that is ready for determination, while the remainder of the dispute continues. Such partial awards are:

• final and binding in respect of the matters they decide; and
• subject to enforcement or challenge in the same manner as a full final award, provided that they meet the formal requirements of Section 31 of ICAL, including (among other things):
• • being:
  • • in writing;
    • signed;
    • reasoned (unless waived); and
    • dated; and
  • stating the place of arbitration.

(e) The remedies it can grant in a final award?

Arbitral tribunals seated in Cyprus have broad discretion to grant remedies in a final award, subject to:

• the parties’ agreement; and
• the applicable substantive law.

The tribunal may award:

• compensatory damages;
• declaratory relief;
• specific performance;
• injunctive or equitable relief; and
• any other remedy available under the applicable law.

However, tribunals cannot grant remedies in relation to non-arbitrable matters, such as:

• the dissolution of a company;
• rectification of a company’s register;
• marital status or family law issues;
• disputes involving rights over immovable property in Cyprus; or
• any remedy that would conflict with public policy, as defined under Sections 34(2)(b)(ii) and 36(1)(b)(ii) of ICAL.

(f) Interest?

Yes, arbitral tribunals seated in Cyprus have the authority to award interest as part of a final award, although ICAL does not expressly regulate interest.

In practice, the tribunal’s power to award interest, both pre-award (up to the date of the award) and post-award (from the date of the award until payment), derives from:

• the applicable substantive law governing the contract or dispute;
• the parties’ agreement, if it includes terms on interest; and
• general principles of contract and commercial law, where relevant.

Under Section 25 of ICAL, a tribunal seated in Cyprus is empowered to continue the proceedings and render an award based on the evidence presented in the following scenarios:

• If the claimant fails to submit their statement of claim, the tribunal may terminate the proceedings (Section 25(a) of ICAL).
• If the defendant fails to submit a statement of defence, the tribunal will continue with the proceedings, but such failure will not be treated as an admission of the claimant’s allegations (Section 25(b) of ICAL).
• If any party fails to appear at a hearing or to produce documentary evidence, the tribunal may continue the proceedings and issue an award based on the evidence before it (Section 25(c) of ICAL).

These provisions ensure that arbitration proceedings in Cyprus cannot be stalled by one party’s non-cooperation or refusal to participate. However, the tribunal must still ensure that:

• due process is followed; and
• the defaulting party is given reasonable notice and opportunity to participate, in accordance with Section 18 of ICAL, which guarantees each party the right to be heard and treated equally.

In summary, non-participation by a party does not prevent the arbitration from proceeding. The tribunal has express authority to proceed and issue a binding award on the basis of the available evidence.

Arbitrators in Cyprus benefit from qualified immunity, provided that their conduct falls within the scope of their judicial or quasi-judicial function.

Under Section 4(4) of the Civil Wrongs Law (Cap 148), no civil action may be brought against a judge or any person lawfully exercising the duties of a judge, including arbitrators, in connection with a tort committed in their judicial capacity, as long as the act was done within their jurisdiction.

This provision effectively extends immunity to arbitrators for acts or omissions carried out in the course of the arbitration, provided that they are acting within the scope of their authority and in good faith. It reflects the recognition of arbitrators as quasi-judicial figures, akin to judges, for the purposes of liability protection.

This notion was also confirmed by recent case law in Antoni Perikelous v Andrea Christoforidi (Action 296/11, 30 August 2017).

The courts in Cyprus will generally stay proceedings and refer parties to arbitration if there is a valid arbitration agreement, in line with the pro-arbitration approach of Cypriot law. Under Article 8(1) of the International Commercial Arbitration Law (ICAL), when a court is seized with a dispute subject to an arbitration agreement, it is obliged to refer the dispute to arbitration upon a party’s request, provided that:

• the request is made before the submission of the first substantive statement on the merits; and
• the court does not find that the arbitration agreement is:
• • invalid;
  • ineffective; or
  • incapable of being performed.

This referral means that the court formally acknowledges arbitration as the proper forum for resolving the dispute. However, it does not automatically compel the parties to initiate arbitration proceedings. Rather, it declares that the arbitration tribunal has jurisdiction and the matter should be resolved there. Boart Sweden AB v NYA Stromnes AB (1988) 41 BLR 295 establishes that the presence of multiple parties and related issues in the dispute does not bar a party which is bound by the arbitration clause from invoking it. The court:

• respects the autonomy of parties that agreed to arbitration; and
• supports enforcement even if not all parties are bound.

In respect of domestic arbitration, if court proceedings are initiated concerning any matter agreed to be referred to arbitration, any party to those proceedings may, at any time after appearing and before delivering any written pleadings or taking any other procedural step, apply to the court for a stay of the proceedings. The court may grant an order staying the proceedings if it is satisfied that:

• there is no reason to justify refusing to refer the matter to arbitration in accordance with the arbitration agreement; and
• the applicant was, at the commencement of the proceedings, and remains ready and willing to take all necessary steps for the proper conduct of the arbitration.

In Cyprus, the courts possess several powers in relation to arbitrations seated both within and outside the jurisdiction. These powers are exercised under specific conditions, with the aim of supporting and facilitating the arbitration process while respecting party autonomy. Examples include the following:

• Courts will intervene in the selection of arbitrators upon the request of a party under particular circumstances (Section 11 of ICAL). Please see question 8.1.
• Courts can enforce interim measures ordered by an arbitral tribunal, regardless of whether the arbitration seat is within Cyprus or abroad, subject to the provisions of relevant laws and international conventions on recognition and enforcement of foreign arbitral awards (Section 17H of ICAL).
• Courts have the power to issue interim protective orders in support of arbitration proceedings, regardless of whether the arbitration seat is within Cyprus or abroad, applying the same standards as in court proceedings (Section 17I of ICAL). Please see question 8.6.
• The arbitral tribunal or any party with the tribunal’s approval may seek the court’s assistance in gathering evidence. The court may grant such requests within its jurisdiction and in accordance with applicable rules governing the taking of evidence (Section 27 of ICAL). Please see question 8.6.
• For the court’s power to remove, terminate the mandate or challenge the appointment of a liquidator, please see questions 8.3 and 8.5.
• For the court’s power to set aside an arbitral award, please see question 14.1.
• Cypriot courts also have jurisdiction to stay court proceedings in favour of arbitration. Please see question 9.1.

Overall, Cypriot courts play a supportive role in arbitration by:

• facilitating the appointment of arbitrators;
• granting and enforcing interim measures;
• assisting in evidence collection; and
• providing limited judicial review.

No, parties cannot exclude the court’s powers in relation to arbitration by agreement. The powers of the courts described – such as intervening in the appointment or removal of arbitrators, granting interim measures, assisting in evidence collection and enforcing arbitral awards – cannot be waived by the parties. Under Section 23 of the Contracts Law (Cap 149), the consideration or purpose of any agreement is unlawful if it is of such a nature that, if permitted, it would defeat the provisions of any law.

Furthermore, any agreement that completely restricts a party’s ability to enforce its rights through the ordinary judicial process or limits the timeframe for doing so is also considered invalid under Cypriot law. This principle safeguards the fundamental right of access to justice, ensuring that parties retain the option to seek judicial intervention where necessary.

The International Commercial Arbitration Law (ICAL) does not contain provisions addressing the allocation of costs. Therefore, unless the parties agree otherwise, the determination of costs is generally left to the discretion of the arbitral tribunal.

Section 17Z of ICAL, which was very recently enacted by virtue of Law 11(I)/2024 and which concerns provisional measures, states that:

• the party requesting provisional measures will bear all costs and damages incurred by the measure in respect of any party if, at a later stage, the arbitral tribunal decides that the provisional measures should not have been granted; and
• the arbitral tribunal may award costs and damages at any time during the proceedings.

In respect of domestic arbitration, Section 6 of the Arbitration Law provides that certain provisions set out in the First Schedule to the law are implied in an arbitration agreement. Section 7 of the First Schedule provides that the costs of the reference and award are at the discretion of the arbitrators, who may:

• direct to whom, by whom and in what manner those costs or any part thereof shall be paid; and
• tax or settle the amount of costs to be so paid or any part thereof.

Section 23(2) also specifies that if the award does not specify who will bear the costs, any party involved can request the arbitrator within 14 days (or a longer period if allowed by a court) to decide on the apportionment of costs. The arbitrator must then issue an amended award on costs after hearing any party that desires to be heard.

There are no restrictions on what the parties can agree for costs allocation under ICAL. In respect of domestic arbitration, according to Section 23 of the Arbitration Law, any clause in an arbitration agreement stating that each party must bear its own costs regardless of the outcome is void. Such a clause will be treated as if it had not been included, unless such agreement is made after the dispute has arisen. This provision aims to ensure that cost allocation in arbitration is addressed fairly.

Cyprus does not have specific legislation governing third-party funding (TPF) in arbitration. As a result, TPF is neither expressly prohibited nor explicitly regulated under Cypriot law.

Traditionally, the common law doctrines of maintenance and champerty could pose obstacles to TPF in Cyprus. These doctrines disapprove of third parties funding litigation or arbitration for profit.

In recent years, however, Cypriot courts have increasingly shown greater openness to TPF, particularly by drawing guidance from developments in other common law jurisdictions.

One key ruling in this regard is the district court’s judgment in Kazakhstan Kagazy PLC v Arip (General Application 1/2020, 31 January 2022). In that case, the court was asked to refuse recognition of a UK judgment on the basis that it had been funded by a third party, allegedly in breach of public policy. The court rejected the argument, finding, among other things, that:

• there is no express prohibition on TPF in Cyprus; and
• the common law principles of maintenance and champerty are no longer strictly applied.

While this is a first-instance judgment, it reflects a growing judicial willingness to accept TPF in appropriate circumstances.

In conclusion, while TPF is not expressly permitted or prohibited, it may be available under Cypriot law, subject to common law principles and developing court practice.

Under Section 31 of the International Commercial Arbitration Law (ICAL), an arbitral award must satisfy the following procedural requirements:

• The award must be in writing and signed by the arbitrator(s). In proceedings with more than one arbitrator, a majority signature suffices, provided the reason for any omitted signature is stated (Section 31(1) of ICAL).
• The award must state the reasons on which it is based, unless:
• • the parties have agreed that no reasons are required; or
  • the award is based on a settlement agreement (‘award on agreed terms’) (Section 31(2) of ICAL).
• The award must indicate the date and the place of arbitration, as determined under Section 20 of ICAL. The award is deemed to have been made at the place where the arbitration takes place (Section 31(3) of ICAL).
• A signed copy of the award must be communicated to each party (Section 31(4) of ICAL).

In relation to the substantive requirements, under Section 28 of ICAL:

• the tribunal must decide the dispute according to the rules of law chosen by the parties to govern the substance of the dispute (Section 28(1));
• if no such law is chosen, the tribunal must apply the law determined by the conflict of laws rules it considers appropriate (Section 28(2)); and
• if expressly authorised by the parties, the tribunal may decide the case ex aequo et bono or as amiable compositeur (Section 28(3)).

There is no specific statutory timeframe within which an arbitral award must be produced under ICAL. The law does not impose a deadline for the tribunal to issue its final award unless the parties have expressly agreed otherwise.

Similarly, the Arbitration Law does not specify a deadline for producing an award. However, under Section 13, if an arbitrator causes unjustified delay, a party may apply to the court to remove the arbitrator. This provision serves as a safeguard to ensure that arbitrators act with reasonable promptness, even in the absence of a strict statutory deadline.

Yes, arbitral awards are enforceable in Cyprus. The enforcement process is governed primarily by:

• Law 84/79, which incorporates the 1958 New York Convention; and
• the International Commercial Arbitration Law (ICAL).

These laws provide for an autonomous and streamlined procedure for the recognition and enforcement of foreign arbitral awards, as confirmed in Beogradska Banka DD (1995).

According to Article III of the New York Convention, each contracting state must recognise arbitral awards as binding and enforce them in accordance with its procedural rules, without imposing substantially more onerous conditions than those for the enforcement of domestic awards.

The applicant must submit:

• the duly authenticated original award or a duly certified copy thereof;
• the original arbitration agreement or a duly certified copy thereof; and
• if these documents are not in the official language of Cyprus, an official certified translation.

This liberal approach also aligns with the pro-enforcement bias of the New York Convention, as emphasised in the Guide to the Interpretation of the 1958 New York Convention: A Handbook for Judges (May 2012 edition).

It is important to distinguish this process from the enforcement of domestic arbitral awards, which is governed by the Arbitration Law. While both regimes require a court application, the procedures under the Arbitration Law:

• are more integrated into the domestic legal system; and
• may not benefit from the same presumptive enforceability afforded to foreign awards under the New York Convention.

Cypriot law draws a clear distinction between international arbitration and domestic arbitration, each of which is governed by a separate statutory regime. As such, they need to be addressed separately.

International arbitration: For arbitral awards issued in Cyprus or abroad that fall within the scope of the International Commercial Arbitration Law (ICAL) and the New York Convention (see question 2.1), the award may be set aside at the request of the applicant only on one of the following grounds (Section 34(2)(a)):

• A party to the arbitration agreement lacked legal capacity or the arbitration agreement is invalid:
• • under the law agreed upon by the parties; or
  • absent such agreement, under Cyprus law.
• The party:
• • was not properly informed of the arbitral proceedings or the appointment of an arbitrator; or
  • was otherwise unable to present its case.
• The award:
• • deals with matters not submitted to arbitration; or
  • exceeds the terms of the arbitration agreement.
• If the award contains separable decisions, enforcement may proceed only for the part relating to issues that were properly submitted to arbitration.
• The arbitral tribunal was constituted or the proceedings were conducted in a manner inconsistent with:
• • the parties’ agreement; or
  • in the absence of such agreement, the provisions of ICAL.

In addition, the award may be set aside on the initiative of the court (ex officio) on one of the following grounds (Section 34(2)(b)):

• The dispute concerns a matter not capable of settlement by arbitration under Cypriot law.
• The award is contrary to the public policy of Cyprus. This is narrowly construed and does not entail a review of the merits unless necessary to identify a breach of fundamental legal principles.

Domestic arbitration: In the context of domestic arbitration, an arbitral award may be set aside on the following grounds, as provided in Article 20 of the Arbitration Law:

• misconduct or mishandling of the proceedings by the arbitrator;
• improperly procured arbitration proceedings; or
• improper procurement of the award (eg, in a manner that is contrary to the applicable legal framework).

Since different time limits apply for international arbitration and domestic arbitration, they must be addressed separately.

International arbitration: A party seeking to set aside an arbitral award issued in Cyprus under ICAL must file an application within three months of the date on which it received the award. Failure to meet this deadline renders the application inadmissible.

If a request for correction or interpretation has been made under Section 33(3), the three-month period begins from the date on which the tribunal disposes of that request.

The court has discretion, under Section 34(4) of ICAL, to suspend annulment proceedings to allow the arbitral tribunal to take steps to remedy the grounds for annulment, such as:

• reopening proceedings; or
• correcting procedural deficiencies.

If a party seeks to resist recognition or enforcement of a foreign award (rather than set it aside), an opposition must be raised:

• in the context of the enforcement proceedings; and
• based strictly on the grounds set out in Section 36 of ICAL.

Domestic arbitration: Although no fixed time limit is expressly provided in the Arbitration Law:

• the application must be brought within a reasonable time; and
• undue delay may be a factor considered by the court when exercising discretion.

Procedural requirements follow the general rules of civil procedure.

Under ICAL, parties are not permitted to contractually exclude the right to apply for setting aside an award issued in Cyprus. These provisions are considered mandatory and the supervisory jurisdiction of the Cypriot courts cannot be waived in advance. However, as discussed in question 14.1:

• the grounds for challenge are strictly limited; and
• the courts apply them narrowly to preserve finality in arbitration.

Under the Arbitration Law, courts have jurisdiction to intervene in cases involving:

• serious irregularity;
• misconduct; or
• violation of public policy.

Neither the Arbitration Law nor the International Commercial Arbitration Law (ICAL) expressly addresses confidentiality in arbitral proceedings. That said, it is widely accepted that parties owe a duty of confidentiality regarding information disclosed or produced during arbitration. Such information may not be used or disclosed for purposes outside the arbitration:

• without the other party’s consent; or
• unless required:
• • by a court order; or
  • for the reasons explained in question 15.2.

Given the absence of explicit statutory provisions, we expect that Cypriot courts will look to UK case law on arbitration confidentiality for persuasive guidance.

Regardless, parties are strongly advised to expressly include a confidentiality obligation in their arbitration agreements when confidentiality is intended.

There are various instances in which an arbitration award or proceeding can potentially be disclosed. These include various applications to court, judicial review and enforcement proceedings, as court judgments are generally publicly accessible. Disclosure may also be potentially necessary to comply with statutory or regulatory obligations.