Commercial and Corporate Law

In 2025, the compliance landscape—particularly in Anti-Money Laundering (AML)—has been fundamentally reshaped by technological innovation and escalating regulatory expectations. As financial crime grows more sophisticated, regulators are demanding more than procedural compliance; they expect institutions to demonstrate a deep, technology-backed understanding of risk and governance.

AML (Anti-Money Laundering) compliance is especially important for law firms due to the sensitive nature of their work and the trust placed in them.

Launching a startup is a bold move — scaling it is even bolder. Whether you're securing your first round of investment or expanding into new markets, legal strategy plays a vital role in your growth.

As global families and high-net-worth individuals continue to seek effective solutions for wealth structuring, asset protection, and succession planning, the Cyprus International Trust (CIT) has emerged as one of the most attractive legal vehicles in Europe. With its roots in Common Law and robust statutory protections, the CIT combines flexibility, confidentiality, and tax efficiency in a single regime tailored for cross-border use.

The case involved a claim for lost profits by a Cypriot Company which had submitted a bid for the supply of legal publications but was not awarded the contract. Although the company successfully challenged the decision of the Tender Board and had it annulled, the contract had already been executed, making a re-evaluation of its bid impossible.

What Constitutes an Act of Bankruptcy?

According to the law, an act of bankruptcy occurs under several circumstances, including:

In corporate governance, maintaining transparency and accountability is paramount for fostering trust among stakeholders. The legal mechanisms that enable companies to address internal disputes or irregularities play a critical role in ensuring long-term stability and compliance with the law. The procedure for appointing an examiner under Cyprus’ Companies Law, Cap. 113, is one such mechanism that aims to balance interests and protect the integrity of businesses.

In today’s legal and commercial landscape, disputes involving asset transfers often pose significant challenges, particularly when creditors face efforts to evade obligations. Asset transfers perceived as fraudulent can undermine creditor rights and create uncertainty in financial dealings. Understanding the legal framework surrounding these cases is essential for safeguarding your interests.

In commercial agreements, arbitration clauses play a vital role in ensuring disputes are resolved efficiently, privately, and with expert input. These clauses stipulate that any disagreements between parties will be settled outside of traditional court systems, often saving time and costs. However, challenges arise when one party attempts to sidestep the arbitration clause and initiates litigation in court instead.

In the ever-changing environment of commercial transactions in Cyprus, businesses face numerous legal obligations and regulatory requirements. As companies enter into contracts and partnerships, the importance of compliance and due diligence becomes paramount. This article discusses how these practices are essential in safeguarding businesses from potential legal challenges.

When buying property in Cyprus, registering the purchase agreement with the Land Registry is a crucial step that safeguards your investment and provides significant benefits.

The recent ruling given on 13/11/2024 addresses the enforcement of a foreign arbitral award issued by the London Court of International Arbitration, shedding light on the interplay between the New York Convention and local laws in Cyprus.

Floating charges serve as a vital financial tool in Cyprus, allowing businesses to secure loans while retaining the flexibility to manage their assets. Here's a concise overview of their key features and implications:

Under the Law on International Commercial Arbitration of 1987 (101/1987), the recognition and enforcement of foreign arbitral awards in Cyprus are governed by specific terms and conditions designed to ensure compliance with both local legal standards and international obligations.

In the context of Cypriot contract law, particularly under Cap. 149, bonds in customary form serve as valuable tools for facilitating financial transactions and ensuring legal obligations are met. Defined as written promises created between parties, these bonds are signed in the presence of at least two witnesses who are competent to contract, providing a robust legal foundation for enforcing payment agreements.

In the realm of corporate insolvency, the liquidator's role is critical to ensuring the orderly dissolution of a company. According to the Cyprus Companies Law, particularly Article 233, liquidators are vested with a range of general powers designed to facilitate effective asset management and realisation during the liquidation process.

In the realm of corporate finance and insolvency, the appointment of receivers and administrators plays a critical role in managing distressed companies in Cyprus. This legal mechanism allows for the effective oversight and recovery of assets, safeguarding the interests of all stakeholders involved.

Article 202 of the Companies Act provides a legal framework for minority shareholders in Cyprus facing oppressive conduct by majority shareholders. Key provisions include:

In Cyprus, a company may be subject to liquidation by the court under certain conditions as outlined in the Companies Law. This process is significant in ensuring that companies that are unable to meet their obligations are properly dissolved in a manner that protects the interests of creditors and stakeholders.

In Cyprus, lease agreements for real estate that extend beyond 15 years can be registered with the Department of Land and Surveys. Once registered, the agreement grants a real right to the tenant, which is transferable, mortgageable, inheritable, and can be sold at public auction if necessary.

In Cyprus, the legal provisions governing the appointment of receivers and managers are crucial for the proper management of a company's assets amid financial distress. These guidelines set out eligibility requirements, processes, and obligations, ensuring a structured approach to insolvency.

Under the Companies Act in Cyprus, the Ministirial Cabinet or the Court has the authority to appoint one or more inspectors to investigate the affairs of a company upon receiving a request from its members. This process is vital for ensuring transparency and accountability within corporate operations.

Normally, Courts will not issue a freezing injunction against a person who is not a party to the proceedings and against whom there does not exist a serious issue to be tried. The possibility, however, of issuing an interim injunction against a third party who is not a "substantive" or the "principal" Defendant and against whom there is no serious issue to be tried has been recognised in both English and Cypriot case law.

Constantinos Clerides explains the legal framework applied in Cyprus regarding the enforcement of foreign judgments.

In the Appeal Court’s judgment issued recently on 12/07/2024 in the case of"REFERENCE TO THE APPLICATION OF THE APPELLANTS (MINORITY SHAREHOLDERS) and IN RELATION TO Company FAIR CHAMPIONS MERIDIAN LTD, the court clarified some procedural problems that were raised during the first instance judgment.

In the recent judgment of the new Cyprus Court of Appeal dated 09/02/2024, Regarding the Petition of Evelyn Bates v. Regarding the Company M. Moniatis & Sons Ltd, Civil Appeal no. 145/2018, 9/2/2024 the following were decided:

Recent Developments in the Law on Cyprus Injunctions (Court Orders): The new Appeal Court clarifies the relationship and differences between the duty for Full and Frank Disclosure and the Equitable Doctrine of “he who comes to equity must come with clean hands”:

Ο Κωνσταντίνος Κληρίδης, συνέταιρος και Επικεφαλής του Τμήματος Επίλυσης Εμπορικών Διαφορών και Εταιρικού Δικαίου στην Φοίβος, Χρίστος Κληρίδης & Συνεργάτες ΔΕΠΕ εξηγεί ότι η εταιρεία επικεντρώνεται στον κλάδο επίλυσης διαφορών, με κύρια δραστηριότητα και εξειδίκευση στη δικαστηριακή εκπροσώπηση πελατών. Εκτός δικαστηρίων, παρέχει συμβουλές σε σχέση με εταιρικά, εμπορικά και συναφή θέματα. Μεγάλο μέρος των υποθέσεων που χειρίζεται το γραφείο αφορά την επίλυση διαφορών που προκύπτουν στο πλαίσιο εμπορικών και εταιρικών σχέσεων και λαμβάνουν πολλές μορφές, καθότι ο κλάδος του corporate litigation είναι πολυσύνθετος. Από το 2020 και έπειτα η Διοίκηση του γραφείου έχει περιέλθει στους Φοίβη Κληρίδου, Αλέξανδρο Κληρίδη και Κωνσταντίνο Κληρίδη.

A director may secure "relief" in the event of a breach of duty by obtaining a shareholders' resolution, or a court order, or even insurance. The duties of a director are of particular interest in cases where the company is unable to meet its obligations.

With reference to the bankruptcy process, it has been decided and it has been characterised that it has a quasi-criminal nature with the aim of protecting and securing the debtor's property so that it can be used as the law defines which is for the satisfaction of the creditors in whole or in part and equally (see London Clubs Ltd v. P. Papadopoulos (2002) 1(C) A.A.D. 1699). Further, in Rashid v. Papori Pol. Appeal No. 198/2012 dated 6/6/2018 the following was mentioned in relation to the bankruptcy procedure: " - The same here, by analogy, bearing in mind that the bankruptcy procedure is a sui generis procedure characterised as quasi-criminal in nature (Williams & Hunter on Bankruptcy, 12th ed. p. 1), where the applicant having no other choice, promoted the bankruptcy of the respondent legally to protect his own interests as well. The fact that a creditor takes the initiative for the bankruptcy of a debtor, which entails some advantage to him, is not considered as equivalent to the use of an unfair purpose or a parallel abusive procedure, (Petrakis v. Kimonos (2006) 1 A.A.D. 1311 ). Fraud or wrongful securing of money for the benefit of the particular creditor needs to be proven in order for a finding that the petition is brought forward on an abusive or unfair basis.

In Re Sherborne Park Residents Co Ltd (1986) 2 B.C.C. 99528 Ch (Companies Ct), Hoffmann J held that an action by a shareholder seeking to set aside an improper issue of shares, as in Howard Smith Ltd v Ampol Petroleum Ltd [1974] A.C. 821 PC, was not a derivative claim at all but a personal claim by the individual shareholder who is aggrieved by it (at 99530– 99531):“Although the alleged breach of fiduciary duty by the board is in theory a breach of its duty to the company, the wrong to the company is not the substance of the complaint.

The rule is that a shareholder, assuming it otherwise has a cause of action as well as the company, cannot recover for loss which is merely reflective of the company’s loss.

Duty in equity to provide shareholders with sufficient information.

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.

Under Article 243(1) of the Cyprus Companies Law the Court may at any time after the issuance of a liquidation order, at the request of either the liquidator or the official receiver (insolvency department) or any creditor or contributory, and after proof to the satisfaction of the Court that any liquidation proceedings should be stayed or terminated, it may issue an order staying or terminating the proceedings, either in completely or for a limited period of time with such terms and conditions as the Court deems appropriate.

Under Article 211 of the Cyprus Company Law (CAP. 113), a company may be liquidated by the Court in the following cases:

Perfection of a Pledge Agreement pursuant to Article 138(1) and 138(2) of the Cyprus Contract Law (Cap. 149):

Norwich Pharmacal order (“NPO”), has its roots in the known UK House of Lords case of Norwich Pharmacal Co ν. Commissioners of Customs and Excise [1974]. It requires a party to disclose certain documents or information to the applicant. NPOs are commonly used to identify the proper defendant to an action or to obtain information to plead a claim.

A Claimant who successfully applies in Court for an injunction freezing the assets of a party places themselves in a very strong position from the outset of a dispute, a position which might bring about an early and successful outcome in that dispute. This arguably makes freezing injunctions, also known as "Mareva" injunctions from the English precedent of Mareva Compania Naviera SA v. International Bulk Carriers SA (1975) , the most important and effective type of court orders.

An injunction is an order of the court that requires a party either to do a specified act (mandatory injunction) or to refrain from doing a specified act (prohibitory injunction - for example, not to trespass on identified land). Technological advances combined with the effects of globalisation allow for rapid transactions and thus create the need for more effective remedies and solutions which can be requested and delivered with haste. The Cypriot Courts recognising this need, especially in cases with an international character, have adapted accordingly and have granted to parties various types of injunctions depending on the circumstances of each case.

By Phoebe Cleridou

Since 1996 Cyprus has gone a long way when it comes to anti-money laundering policies. One of our proud achievements was the Financial Task Force mission in 1997 that classified Cyprus as a priority country in the FATF External Relations program. Later followed national legislation ammendments and further implementation of EU Directives on the subject.
Reports on money laundering adopted by the EU dated from 1998 until today have only emphasized in enthusiasm and laudatory terms about Cyprus' achievements in fighting money laundering.