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 Center for Alternative Dispute Resolution provides for specific Arbitration Rules for any type of claim. Our rules are based on UNCITRAL Arbitration Rules.

ARBITRATION CLAUSE OF THE CENTER

Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Cyprus Center for Alternative Dispute Resolution Rules (A.D.R. Cyprus Center Ltd) which Rules are deemed to be incorporated by reference into this clause. The seat, or legal place, of arbitration shall be the Republic of Cyprus. The governing law of the contract shall be the substantive law of the Republic of Cyprus.

ARBITRATION FEES

i) FOR ARBITRATION IN CIVIL AND COMMERCIAL DISPUTES

Filing Fees

€400 non-refundable filing fee, to file the dispute with the Center.

Minimum Arbitration Hourly Fees for Each Arbitrator

Amount of Purchased Goods or Services in Euro (€)	Fees in Euro (€)
500 to 10.000	150
10.001 and over	250

• The fees are agreed with the arbitrators. The above fees are indicative of the minimum arbitration fees to be charged by Arbitrators of the Center.
• All the above fees are exclusive of VAT and are payable on a per hour basis.
• A deposit of four hours of Arbitration shall be paid with the commencement of the proceedings (article 3(2) of the Rules)

ii) FOR ARBITRATION IN CONSUMER DISPUTES

Filing Fees

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

Arbitration Hourly 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

• All the above fees are exclusive of VAT and are payable on a per hour basis.
• A deposit of two hours of Arbitration shall be paid with the commencement of the proceedings (article 3(2) of the Rules)
• The maximum amount payable by the Consumer is €1000