Anti-suit Injunctions - Cyprus Injunctions - Trials & Appeals & Compensation - Cyprus

[Gunnar Larson]

https://www.mondaq.com/cyprus/trials--appeals--compensation/1429386/anti-suit-injunctions---cyprus-injunctions


Anti-suit injunctions:
The courts have the power to issue interim injunctions prohibiting a Party
from bringing court or arbitration proceedings. In general and where there
is the element of foreign parallel proceedings, anti-suit injunctions are
intended to prevent "forum shopping" or the bringing of proceedings in a
"forum non conveniens" or where the foreign proceedings have been issued in
bad faith and thus have an oppressive or vexatious effect. Such injunctions
are issued in personam, so that they are compatible with the need for
comity between different countries and their court systems.

General Criteria for issuing anti-suit injunctions:
Any type of injunction under Cyprus Law must satisfy the general principles
for issuing Court orders under Section 32 of the Court of Justice Act
(14/1960), in which the power is conferred to grant injunctions in all
cases in which it appears to the Court just or convenient to do so. These
are explained in a separate article that can be found below.

In short, the general rules of course are that:

"(a) there needs to be a serious question arises to be tried at the hearing.

(b) There appears to be "a probability" that the plaintiff is entitled to
relief and, lastly,

(c) it shall be difficult or impossible to do complete justice at a later
stage without granting an interlocutory injunction."

Non-exhaustive Examples of circumstances in which anti-suit injunctions may
be issued:
1. For the protection of existing proceedings within the jurisdiction of
the Court : - e.g. where there are pending bankruptcy proceedings or
liquidation proceedings, or where a Party has initiated two proceedings and
the Applicant in the anti-suit proceedings seeks to compel the other Party
to choose or be limited to a single jurisdiction. In deciding whether to
prohibit a Party from proceeding in a foreign jurisdiction the court shall
take into consideration (a) whether it serves the interests of justice; (b)
the order is in personam against a Party and not against a foreign Court
(c) that in issuing such an injunction, utmost care to protect comity must
be exercised since it is inevitable that such orders indirectly affect
foreign courts and their jurisdiction to try a case.

2. Exclusive jurisdiction clause: - In cases where there is an exclusive
jurisdiction clause for referring the dispute to a specific jurisdiction or
arbitration. The injunction may be requested by the Applicant either to
oblige the Respondent to comply with the jurisdiction clause. In such
cases, in order for an anti-suit injunction to be issued, the Respondent
must be within the jurisdiction of the court and the Applicant must prove
that he has basis of claim and or right to prevent the Respondent from
using the foreign court, e.g. contractual right/obligation to use the
courts of Cyprus.

3. Where parallel foreign proceedings have an oppressive or vexatious
effect: - In cases where a jurisdiction clause is not exclusive, an order
may be issued if proved that a Party is acting oppressively, vexatious or
in bad faith by instituting foreign proceedings.

4. Where there are restrictive international treaties/regulations: - In
cases where there are specific European or international treaties /
regulations, which regulate the jurisdiction and or the effect of
jurisdiction / arbitration clauses.

However given the inevitable effect on a foreign jurisdiction and possible
interference with the comity of states, in addition to the very restrictive
nature of an anti-suit injunction which affects the core of the
constitutional right to access to justice, the Cypriot Courts are hesitant
to issue such orders and shall only do so in exceptional circumstances
where all criteria are met and where it is just and convenient in the
interests of justice.
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