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12 April 2018
In a recent case before the Limassol District Court – Ιntersputnik International Organization of Space Communications v Alrena Investments Limited (Appl 32/12, January 1 2018) – the applicants requested the registration and enforcement in Cyprus of an arbitral award issued by the International Commercial Arbitration Court at the Russian Federation Chamber of Commerce and Industry on December 27 2011 following a successful challenge of the first-instance court judgment which had rejected their application. The Supreme Court decided that not all of the respondents' arguments had been examined by the district court and allocated the case to a different judge at the Limassol District Court.
The respondents claimed that the application had to be set aside, as the requirements of the New York Convention 1958 – which was incorporated into Cypriot law by Law 84/1979 – had not been fulfilled. The respondents focused on the requirements of Articles I and IV(2) of the convention, which state as follows:
"Article I: This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought…
Article IV(2): If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent."
The respondents argued that the applicants had failed to prove that the state in which the arbitral award was issued, specifically Russia, was a contracting state to the New York Convention. As a result, the Cypriot court decided that it had no jurisdiction to allow the recognition and enforcement of the award. The respondents also claimed that the applicants had failed to comply with Article IV(2) of the convention and that the translation of the award prepared by the Cypriot Press and Information Office not fulfil the New York Convention's requirements.
The Limassol District Court decision primarily examined the respondents' arguments. The court stated that when Cyprus became a contracting member to the New York Convention, it had agreed to:
"apply the Convention, on the basis of reciprocity, to the recognition and enforcement of awards made only in the territory of another Contracting State; furthermore it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under its national law."
Τhe court decided that the applicants had failed to provide evidence as to whether Russia was a contracting state to the convention. This omission was not rectified at a later stage, despite the fact that the respondents had disputed the court's jurisdiction. As a result, the court ruled that it had no jurisdiction to allow the registration and enforcement of the award.
Notwithstanding the above conclusion, the court proceeded to examine the respondents' second argument that the applicants had not presented the court with a translation of the arbitral award to court which fulfilled the requirements of Article IV(2) of the New York Convention. The court stated that the Cypriot Press and Information Office's translation did not comply with the convention's requirements, as no Cypriot Press and Information Office official had confirmed its validity. The court drew guidance from the earlier judgment in UralMetprolm v Besuno Ltd (Appl 134/2006) in concluding that the Cypriot Press and Information Office is not:
In light of the above, the court rejected the application to register and enforce the arbitral award.
For further information on this topic please contact Angela P Christodoulou at George Z Georgiou & Associates LLC by telephone (+357 22 763 340) or email (email@example.com). The George Z Georgiou & Associates LLC website can be accessed at www.gzg.com.cy.
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