In recent years, courts around the world have increasingly demonstrated respect for the provisions of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. A welcome development in this regard was the recent decision of the Supreme Court of Cyprus, which resolved a long-standing issue that has troubled litigants for decades: whether any of the parties needs to be a resident of Cyprus to enforce an arbitral award.

What the First Instance Court Decided

At the first instance level, the Court ruled that the New York Convention provides the necessary jurisdictional basis for the recognition of an arbitral award, even if the applicant or the respondent is not a resident of Cyprus. The applicant’s position was that, given that the New York Convention exhaustively sets out the reasons for which a domestic court can refuse the recognition or enforcement of an arbitral award, residency is neither a requirement nor a valid ground for refusal.

Unitech Limited v. Cruz City 1 Mauritius Holdings, Civil Appeal No. 49/2016, 13/11/2024

The Court sided with the applicant's argument and clarified several key points:

• The New York Convention was incorporated into Cyprus' legal system through the Ratifying Law 84/1979 and holds superior authority over domestic legislation under Article 169.3 of the Constitution.
• Cyprus has an international obligation to recognize and enforce arbitral awards in line with the provisions of the Convention.
• The Court emphasized that no more onerous conditions, higher fees, or charges should be imposed for the recognition or enforcement of foreign arbitral awards than those applied to domestic awards.
• The grounds for refusing the recognition and enforcement of arbitral awards are limited and exhaustive, as outlined in Article V of the New York Convention.
• Cyprus' domestic legislation cannot impose limitations on or extend the provisions of the New York Convention.

This ruling aligns with the pro-arbitration trend observed in Cyprus over the past decade. It effectively puts an end to the question of whether the domicile of a party is relevant when the New York Convention applies.

The judgment is part of a broader series of pro-arbitration decisions issued by the courts of the Republic of Cyprus, and it is unlikely to be the last. As Cyprus continues to strengthen its position as a hub for international arbitration, this decision further solidifies its commitment to upholding international standards and practices in the field of arbitration.