A recent significant judgment was issued by the Court of Appeal of Cyprus in the case

ΑΡΧΗ ΗΛΕΚΤΡΙΣΜΟΥ ΚΥΠΡΟΥ v. ALTRAD BABCOK LIMITED κ.α., Πολιτική Έφεση αρ. Ε41/2019, Ε42/2019, 16/12/2024.

The Court of Appeal has reinforced the duty of full and frank disclosure in ex parte applications, dismissing two appeals by the Electricity Authority of Cyprus (EAC) in a high-stakes dispute.

Case Background

• The case arose from a dispute over a construction contract between EAC and another company, relating to modifications at the Vasilikos Power Station.
• The contract was allegedly breached when the company delayed project completion, and an explosion at the naval base of Mari in 2011 further disrupted operations.
• The company invoked force majeure, terminating the agreement. EAC subsequently sought damages amounting to €5,078,565, alleging breach of contract and insurance claims.
• In March 2018, EAC obtained ex-parte orders to (a) seal the writ of summons and (b) serve the writ of summons out of the jurisdiction on the foreign defendants (the “Ex Parte Orders”).

The Issue of Non-Disclosure

• The Defendants filed a notice of appearance under protest, challenging the order for service out of jurisdiction, arguing that EAC failed to disclose a crucial jurisdiction clause in the insurance policy, which provided for exclusive jurisdiction to English courts.
• They further cited EU Regulation 1215/2012, which mandates that actions be filed in the defendants' country of domicile.

District Court Judgment

• The District Court ruled in favour of the Defendants, discharging the Ex Parte Orders on the basis that EAC had not explicitly highlighted the exclusive jurisdiction clause in its supporting affidavit.
• The court reasoned that merely attaching the policy as an exhibit was insufficient to satisfy the duty of full and frank disclosure.
• EAC appealed, arguing that the court erred in finding non-disclosure, since the insurance contract was included in its affidavit.

Court of Appeal Judgment

The Court of Appeal upheld the first instance judgment, reaffirming the strict obligation on applicants in ex parte proceedings to present all material facts fully and transparently. The judgment emphasised the following points:

• Mere attachment of a document does not suffice – important details and terms must be expressly outlined in affidavits.
• Full and frank disclosure is a fundamental principle, preventing courts from issuing orders based on incomplete or misleading evidence.
• Failure to disclose a jurisdiction clause in a foreign contract can constitute grounds for setting aside an ex parte order.

Importance

The judgment of the Court of Appeal serves as a cautionary precedent for litigants seeking ex parte relief in Cyprus, particularly in cross-border disputes.

It underscores the strict duty of full and frank disclosure and the obligation to bring all material facts before the attention of the Court. It further highlights the potential consequences of omitting key contractual terms when applying for ex-parte orders.

For law firms handling international commercial litigation, this case reinforces the necessity of explicitly outlining jurisdictional and contractual constraints.