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One of the greatest advantages of mediation is the enforceability of a settlement agreement emanating from a successful mediation. The enforceability of such an agreement means that it can be enforced without the need to file a lawsuit.
Mediation in Cyprus for civil disputes is governed by the Law on Certain Matters of Mediation in Civil Disputes 2012 (Law 159(I)/2012) and for family disputes by the Law on Mediation in Family Disputes 2019 (Law 62(I)/2019).
In order for a settlement agreement to be enforceable, two conditions must be met:
- The settlement agreement must be the result of mediation. That is, a structured process, however named or referred to, whereby two or more parties to a dispute attempt by themselves, on a voluntary basis, to reach an agreement on the settlement of their dispute with the assistance of a mediator.
- The settlement agreement must be submitted to the court jointly by the parties or by one of the parties with the explicit consent of the other parties. In the latter case the consent can also be given through the settlement
When does the issue of Enforcement of a Settlement Agreement Arise?
The issue of enforcing a settlement agreement will arise when one of the parties is in breach of the agreement. The agreement can be registered at the Court either before or after the breach.
How is the Settlement Agreement Enforced in Cyprus?
If the abovementioned conditions are met, the next question to ask is the procedure by which such an agreement may be enforced in Cyprus.
Mediation legislation does not refer to the procedure of for registering and enforcing a settlement agreement at the Court. However, given the confidentiality that governs the entire mediation process as well as the settlement agreement, registration and enforcement is a matter which should be dealt with in a specific way.
There are two scenarios where the matter for registering and enforcing the settlement agreement arises. The first is where the mediation results in a settlement agreement whilst a lawsuit is already pending, and the second is where a lawsuit is not already pending.
- Where a Lawsuit is Already Pending
In the case where a lawsuit is already pending, the settlement agreement may be enforced through a Tomlin Order. This Order has been introduced in England by Tomlin J who used it first in the case of Dashwood v Dashwood [1927] WN 276.
Under this type of Order, the application for the enforcement of a Settlement Agreement is filed within the Action. Under this application, the party requesting enforcement, will request the staying of the proceedings in accordance with the terms of the Settlement Agreement which will be annexed to the Order sought.
In the event of breach of the Settlement Agreement, either party may apply to the Court to enforce the terms of the agreement without bringing another action.
- Where no Lawsuit has Been Filed
In the case where no action is pending, there is no case law in Cyprus or England which can provide guidance on the matter, however, the Civil Procedure Rules of England may be used to assist (see Rule 78.24 and related Practice Direction).
Primarily, an Originating Summons may be filed with the court based on the Law on Certain Matters of Mediation in Civil Disputes 2012 (Law 159(I)/2012) or the Law on Mediation in Family Disputes 2019 (Law 62(I)/2019). The Summons should include a request for the registration and enforcement of the settlement agreement between the parties.
The Summons may be accompanied by an affidavit with the settlement agreement attached, together with the proof of consent required for the registration and enforcement of the said agreement.
In case the terms of the settlement agreement are not observed, then the party wishing to enforce the agreement may proceed with a separate application within the Originating Summons application.
Confidentiality of the Settlement Agreement in Cases of Enforcement
To maintain the confidentiality in both types of applications mentioned above, the application should be accompanied with a prayer that the file cannot be accessed by someone not being a party to the settlement agreement without the prior leave of the Court.
Whenever there is explicit consent to register and enforce a Settlement Agreement in the Court, then the application may be filed ex-parte unless a party to the agreement is not a party to the Application. In the latter case, the Application must be made by summons.
This article does not constitute legal advice.
The publication of this article is partly funded by the European Union’s “Consumer Programme (2014-2020)”.
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Evripides Hadjinestoros
Lawyer
Evripides is a lawyer and a mediator. He is the founder of the Cyprus Consumer Center for ADR and a member of the Arbitration and Mediation Committee of the Cyprus Bar Association. He teaches law at the European University of Cyprus and provides mediation training at the Cyprus Consumer Center for ADR. After completing the LLB Law degree at Queen Mary University in London in 2009, he then completed a post-graduate diploma in Company Law LLM, at University College London. He graduated with Distinction. In 2016, Evripides published the book «The Law on the Sale of Goods and Consumer Protection in Cyprus», which was published by Nomiki Vivliothiki. He has also published several legal articles in journals in Cyprus and abroad and he has been quoted in legal textbooks such as Lee Roach, Card & James Business Law (2016, Oxford University Press), Stefan H.C. Lo, In Search of Corporate Accountability: Liabilities of Corporate Participants, (2015, Cambridge Scholars Publishing) and Thomas B. Courtney and Daibhi O’ Leary, The Law of Companies (2016, Bloomsbury Publishing).