Arbitration

ADR Services

WHAT IS ARBITRATION

Arbitration is an alternative to judicial proceedings when a dispute arises between two contracting parties regarding the performance of obligations or exercise of rights in the context of their contractual relationship.

The ability of the contracting parties to resort to arbitration proceedings instead of the Court, is dependent on the existence of the necessary “arbitration clauses” in the terms of the contract between the parties.

Such arbitration clauses will require that that any disputes that arise in the future between the parties in relation to their contractual relationship, will be resolved through arbitration instead of judicial proceedings.

In the event that a party initiates court proceedings in contravention of an arbitration clause, with regards to a dispute covered by such a clause in the terms of the contract, the responding party will be able to argue for the dismissal of the court proceedings.

The arbitration procedure itself, resembles that of court proceedings in the sense that the basic principles of legality, fairness, impartiality and justice still apply but in a more simplified procedural framework with a focus on the essence of the subject matter of the dispute. It is a formal adversarial process where witnesses are called in and subjected to examination and cross-examination.

In arbitration proceedings the parties in the dispute can appear personally or through a legal advisor and much like court proceedings they have an opportunity to present to the arbitrator their version of the events of the dispute and the documents or other evidence in support of their arguments. The parties will also have an opportunity to challenge the validity of the opposing party’s arguments and respond accordingly.

The proceedings are held before an arbitrator or panel of arbitrators, depending on the terms of the arbitration clause. After, being presented with the opposing arguments and evidence the arbitrator will make findings as to the opposing arguments and issue a binding decision as to the subject matter of the dispute. After the dispute is resolved, the arbitrator will issue a decision in writing.

WHAT ARE THE BENEFITS OF ARBITRATION

There are several benefits to arbitration proceedings in comparison to judicial proceedings, such as:

  • the parties can define in the arbitration clause, the procedure for appointment of an arbitrator or arbitrators and the necessary qualifications, the applicable law and location of the arbitration proceedings.
  • the dispute is examined by an arbitrator with expertise in the field related to the subject matter of the dispute or the type of contractual relationship
  • proceedings are faster and enable the successful party to establish its legal rights in a timely manner, which will positively affect its ability to obtain remedies from the other party
  • due to the nature of the proceedings legal costs tend to be significantly lower than the costs of judicial proceedings
  • arbitration proceedings can be confidential depending on the relevant clauses in the terms of the contract which will help parties protect any trade secrets or other confidential information and also avoid negative publicity.
  • arbitration decisions may only be disputed in Court on limited grounds, which provides for finality and certainty of the proceedings.

The Cyprus Consumer Center for Alternative Dispute Resolution provides for specific Arbitration Rules for Consumers and Traders to settle their disputes. Our rules are based on UNCITRAL Conciliation Rules and on the spirit of Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes.

Cyprus Consumer Center Arbitration Rules.

ARBITRATION FEES

Filing Fees

€20 non-refundable filing fee, to file the dispute with the Center.

Arbitration Fees

Amount of Purchased Goods or Services in Euro (€) Consumer Fees in Euro (€) Trader Fees in Euro (€)
500 to 10.000 25 100
10.001 and over 30 120
  1. All the above fees are exclusive of VAT and are payable on a per hour basis.
  2. A deposit of two hours of Arbitration shall be paid immediately with the filing.
  3. The above fees are based on one hour of Arbitration. For every extra hour required for Arbitration there will be:
  • An additional fee of €25 per hour for the Consumer and €100 per hour for the Trader for any disputes between €0 – €10,000.
  • An additional fee of €30 per hour for the Consumer and €120 per hour for the Trader for any disputes over €10,000.
  • The maximum amount payable by the Consumer is €1,000

Other expenses:

The expenses of the trader do not include the cost of using sites owned/leased/licensed by the Center to resolve the dispute. These expenses are chargeable at €100 per day + VAT in case facilities owned/leased/licensed by the Center are used. They are not payable in case the Trader is committed to ADR through an annual subscription to the Center or where the Center decides to exempt the Trader from such expenses.