Cyprus - Andreas Neocleous & Co

CYPRUS
CYP/37
It is the agent's duty under section 189 of the Contracts Law and under common
law to communicate relevant information to his principal, and he will be deemed
to have done so: this principle is reflected in the provisions of Order 5, rule 8
above.
Agent's Authority to Initiate Suits on Behalf of Principal
An agent is entitled to initiate proceedings against third parties on behalf of the
principal. 40 However, the usual practice is that such actions are brought by both
the principal and the agent.
Where the principal is undisclosed, the agent may sue third parties in his own
name, despite the fact that ultimately it is the principal that will be entitled to
any damages or relief.
Arbitration
Cyprus courts will usually give effect to any valid term in an agency agreement
or in a written agreement between the principal and the third party to the effect
that any dispute is to be referred to arbitration, and will stay any proceedings
before them which are subject to the arbitration clause. English common law
principles are applicable in this area of law.
The Cyprus Law on International Commercial Arbitration 1987, Law Number
101/87 ("the ICA Law") regulates international commercial arbitration. The ICA
Law defines the words 'international arbitration' as an arbitration between two
parties who have their place of business in different states. The word
'commercial' is defined as referring to matters 'arising from relationships of a
commercial nature' and so may be widely interpreted.
There is little, if any, case law on matters of international commercial arbitration
in Cyprus. Common law principles are applicable and courts are likely to use
English or Commonwealth cases for guidance and as reference.
Foreign Jurisdiction
It has been firmly established by case law that principles of private international
law form part of the law of Cyprus, but only insofar as they form part of the
common law of England. Therefore, although no cases concerning choice of law
clauses have been reported, Cyprus courts are likely to follow their English
counterparts and uphold choice of law clauses.
The courts have the power to restrain by injunction the institution or continuance
of proceedings in a foreign court brought in breach of arbitration or a
jurisdiction clause in favor of Cyprus. However, this power is exercised with
great caution.
40 Lavan v Walsh, 1964, Ir. R 87; 99 ILTR; Brandt v Morris, 1917, 2 KB 784, 8.
(Release 2 – 2013)