Imminent Reform Needed in Arbitration Law

The delays in Cyprus’s judiciary system form an issue highlighted in recent years not only by the public but also by lawyers and judges themselves. Understaffing because of austerity measures and civil procedures that allow for a manipulation of the judiciary system are the main reasons behind these delays. The promising increasing use of arbitration, the main alternative method for dispute resolution, is ambushed by Cyprus arbitration law itself, the Cyprus Domestic Arbitration Law, also known as CAP.4. CAP.4 was enacted in 1944 and established a legal framework similar to that of the UK Arbitration Act 1950. This paper examines the weaknesses of this outdated law, and it furthermore investigates the options that are available for its improvement by comparing the existing CAP.4 with (1) the Cyprus International Commercial Arbitration Law 101/1987 (Law No. 101/87) also known as ICA, which is based on the UNCITRAL Model Law (1985), (2) the UK Arbitration Act 1979, and (3) the UK Arbitration Act 1996.

“Justice delayed is justice denied” is the legal maxim that describes the criticality of the time taken for resolution of an issue to the justice experience of the person seeking justice. In Cyprus, delays are experienced not only in court proceedings, but also in arbitration. The introduction of arbitration, as an alternative dispute resolution method, is not as successful as it could be because instead of being a therapy to the problem of delay in dispute resolution, it likewise suffers from delays. The main problem for this is the primitive arbitration act CAP.4 still in use for domestic arbitrations in Cyprus. It allows for court interventions throughout the procedure, leaving the parties and the arbitral tribunal vulnerable to procedural actions, doomed to delays and cash flow problems. Even if an award is issued after a longer time than it should, its enforcement faces difficulties and delays since the legislation allows for appeals for minor procedural issues, thus delaying the successful parties receiving the justice they sought. Unfortunately, the recalcitrant parties manipulate the applicable procedures and primitive system to delay the outcome and the enforcement of an award. This article presents the problems of the Cyprus domestic arbitration act, investigates the options that are available for its improvement by comparing the existing law, and suggests specific solutions.