Cyprus: Radical Changes In Interlocutory Proceedings In Cyprus

Article 32 of the Courts of Justice Law, L. 14/1960, which governs the jurisdiction of civil Courts to issue interlocutory orders, has been recently amended by the L. 114(Ι)/2023, introducing radical changes in this field.

In essence, the recent amendments have notably widened the jurisdiction of the Courts to issue interlocutory orders.

According to the amending law, the Courts have jurisdiction to hear an application for interlocutory proceedings any time, including the time before the filing of the claim or following the issuance of a judgment in relation to judicial or arbitral proceedings that took place, are taking place, or are going to take place, within or out of the jurisdiction. Furthermore, as far as it concerns the power of the Court to grant interlocutory orders in aid of judicial or arbitral proceedings, the Court has jurisdiction where the respondent is within the jurisdiction, or the property that constitutes the subject matter of the remedy sought is located within the jurisdiction, or where there is such a link with Cyprus rendering the court appropriate to hear and decide the interlocutory application.

Before the amendment of the law, the advancement of an application seeking interlocutory proceedings was not possible in the absence of an underlying claim. There has been established case law providing that an application for interlocutory order is filed where there is an actionable right for remedy and that an interim order does not constitute by itself an actionable right. An interlocutory order is ancillary to a substantial claim that is advanced within the context of an action according to the old English decision in The Siskina¹ . In The Siskina it was stressed that the right to an interlocutory order does not constitute a standalone actionable right, it is not a free-standing right and, as such, it depends on an existing actionable right.

At this point it is noted that the approach taken in The Siskina has been eroded by legislative amendments in the UK. Similarly, in Cyprus the latest amendment of the Courts of Justice law constitutes a legislative departure from the previous approach, something that is also illustrated in Part 25 of the new civil procedure rules providing that applications for interlocutory orders may be filed, under certain circumstances, before the filing of a claim or after the issuance of the judgment.

Additionally, before the latest amendment, it was not possible to obtain an interlocutory order in aid of judicial proceedings pending abroad (apart from the EU) in the absence of a bilateral or a multilateral convention. The possibility to issue an interlocutory order in aid of arbitration proceedings, though, was already available in Cyprus legal system under article 9 of the International Arbitration Law, L.101/1987.²

Despite the fact that the discretion of the Cyprus Courts to issue interlocutory injunctions was wide even before this amendment, the Courts have repeatedly stated that this discretion is exercised within the limits prescribed by the law and, thus, in the absence of a statutory provision, the possibility to issue interlocutory orders in aid of judicial proceedings was limited only in aid of proceedings pending before the Courts of the member states of the European Union pursuant to article 35 of the EU Regulation 1215/2012, as well as in instances where the Republic of Cyprus has entered into an international convention for judicial assistance in this respect.³ In all other instances of foreign judicial proceedings, the Cypriot Courts' approach was that there was no jurisdiction to issue interlocutory orders.

Considering the range of the recent amendments, the green light has been given to advance such interlocutory applications at any time and in aid of judicial proceedings wherever these are taking place (provided of course that all statutory elements are met).

It could be said that the recent amendments of the Courts of Justice Law aim to modernize the legal system of Cyprus providing further flexibility considering not only the developments of the common law case law, but also the societal changes, such as the ease and speed with which money and other financial assets can be moved around the world, the globalisation of commerce and economic activity and consequent growth of litigation and arbitration with international dimensions as well as the growth and use of offshore companies.⁴

Having said that, it remains to be seen how the Cyprus Courts will approach the newly added legislative possibilities and whether the pre-existing case law will set boundaries in further developments.

Footnotes

1 The Siskina [1979] AC 210

2 Attorney General of the Republic of Kenya ν. Bank Fur Arbeit and Wirtschaft A.G. (1999) 1 C.L.R. 585, Commerzbank Auslandbanken Holding A.G. a.o. ν. Adeona Holdings Ltd, Civil Appeal no. Ε6/2014, 27.2.2015.

3 Volodimir Spilnichenko ν. ANGILERI INVESTMAENTS LTD a.o., Action no. 5652/15, 31/3/2017, CLOSED JOINT-STOCK INVESTMENT COMPANY FINANSOVY DOM ν. UFS CAPITAL LIMITED a.o., Action no. 4480/15, 19/5/2016

4 Broad Idea International Ltd (Respondent) v Convoy Collateral Ltd (Appellant) (British Virgin Islands) [2021] UKPC 24.

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