Cyprus incorporates all the characteristics which make a country an attractive venue for international arbitration.
Choosing a place of arbitration is a particularly difficult decision. On the one hand, the jurisdiction must be neutral. On the other hand, parties must be sure that no legal obstacle will jeopardize the conduct of the arbitration and that, once the award has been made, the successful party will be able to secure its legal enforcement in the country or countries where the other side has assets. Cyprus will be a neutral venue in most cases. Due to its geographical proximity to the Middle East, it is a suitable arbitration venue for dispute resolution involving Middle-Eastern entities.
Arbitration proceedings can be tailored to match the participating parties’ needs. The parties are free to agree on the language or languages to be used in the proceedings. Arbitration is a procedurally flexible process and it is up to the parties to agree on the procedure to be followed and on the applicable rules of law in relation to the substance of the dispute. Failing such an agreement between the parties, the above decision is left to the arbitrator.
Cyprus law on arbitration was initially based on the English 1950 Arbitration Act. Due to the several drawbacks of this law (which had to be amended in England in 1979), Cyprus proceeded to amend its arbitration legal framework in 1987 by adopting the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration of 21 June 1985. This law, which meets the needs of practitioners in international arbitration, applies to any international arbitration taking place in Cyprus. It limits the intervention of the Courts in the cases which are expressly provided for in the law, and in the few cases where the international community (as represented by UNCITRAL) considers the support or the control of the Courts necessary.
In addition, Cyprus enacted the International Commercial Arbitration Law of 1897, N. 101/1987 which sets out the legal framework governing international arbitration proceedings. Furthermore, in 2011, Cyprus enacted the Law on Extrajudicial Settlement of Consumer Claims Via Arbitration, Law 78(I)/2011, which promotes the out-of-court settlement of consumer claims.
Cyprus has been a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958. Therefore, an award made in Cyprus by an international arbitration tribunal can be enforced on the basis of this convention in the countries which have also ratified it. Furthermore, Law 121(I)/2000 provides for the recognition, registration and execution of arbitral awards issued in foreign arbitration proceedings.