After annulment: compensation under Article 146.6 in Cyprus

The Administrative Court has annulled the decision. The refused permit, the tender awarded to a competitor, the promotion that went to a colleague, the licence that was turned down: the court has declared it void and of no effect. It is natural to expect the authority to put things right, and to pay for what the decision cost.

It does not work that way. Annulment removes the decision; it compensates nobody. The authority has to take the matter up again, and Article 146.6 of the Constitution gives a right to just and reasonable compensation only where loss caused by the annulled act remains and the authority has not satisfied the claim. That right is pursued by a separate action in a District Court, on conditions the recourse never tested, some of which are lost by doing nothing. The recourse itself and its 75 days are explained in our article on challenging a government decision, and the wider practice on our public and administrative law page; this article starts where the recourse ends.

Annulment removes the decision, not the loss

The judgment obliges the authority to act, but it does not award money. Article 146.5 makes the annulling judgment binding on every court, organ and authority in the Republic and obliges those concerned to comply with it actively. Section 57 of the General Principles of Administrative Law Law, Law 158(I)/1999, states the consequence: the act disappears, and the administration must restore things to where they stood before it was issued.

Compensation is a separate step. In Frangoulides v. Republic (1982) 1 C.L.R. 462 the Supreme Court held that annulment "does not automatically confer a right to compensation", not even where material damage is plain. The first right of the person who won is to demand the eradication of the act and everything that flows from it; the right under Article 146.6 "primarily ... entitles the injured party to recover damage not remediable by proper administrative action". Article 146.6 then lets the person harmed pursue in court just and reasonable compensation, or other just and reasonable remedy, where the organ, authority or person concerned has not satisfied the claim.

The recourse establishes that the act was unlawful. Whether it cost you anything, and how much, is a different question, decided in a different court.

The authority must decide again, on the facts as they were

After annulment the authority re-examines the matter as it stood when it first decided, not as it stands today. Section 58 of Law 158(I)/1999 requires it to take account of the factual and legal position in force when its decision was issued, save, by way of exception, where later legislation is retrospective or shows that the legislature no longer tolerates the old provisions. Section 59(2) binds it to the operative part of the judgment and to the court's findings on the facts and law on which that rested.

Two Supreme Court judgments show what this means. In Frangoulides a welfare officer passed over for promotion in 1963 won his recourse; the administration then introduced a new scheme of service with qualifications that in substance disqualified him, and appointed others. That decision was annulled too, because the administration had no right to alter the legal or factual background. In Republic v. Androulla Petrou (2016) 3 A.A.D. 273 the Public Service Commission re-examined an annulled appointment on new material that cut the applicant's lead in experience from fifteen years to three, and appointed the same person again. The Supreme Court held that this re-assessed what the court had already decided, in breach of res judicata.

Re-examination must also come within a reasonable time, which section 10 of Law 158(I)/1999 requires of every exercise of competence. In Digicom Ltd v. Cyprus Telecommunications Authority, Civil Appeal 373/2018, decided on 5 November 2025, the Court of Appeal held that a so-called re-examination made about twelve months after the authority lost its appeal, and two months after the bidder had sued, was neither genuine nor made within a reasonable time.

If the authority decides against you again

A second adverse decision is not unlawful merely because it repeats the first. Where a decision fell for want of reasons, the court did not decide the merits, and the authority may reach the same result with proper reasons. In Koinopraxia A.D.T. - Omega A.T.E. and Others v. Republic, Revisional Appeal 42/2015, decided by the Supreme Court on 12 January 2022, a joint venture's bid for the design of the Limassol to Saittas motorway was rejected for want of five years' relevant experience, and the rejection was annulled as unreasoned. By then the contract had been performed. The joint venture claimed 246,141.32 euro; the authority re-examined, rejected the bid again, and the Supreme Court upheld that outcome. Where the former position cannot be restored, it said, compliance may take the form of examining a monetary claim, but the claim could not be answered before re-examination showed whether the bid would have won.

The remedy against a new decision, or against an authority that does nothing, is a new recourse. If the proper administrative action is not taken, Frangoulides says, "the remedy is to go to the administrative court again". The 75 days of Article 146.3 apply as to any decision, and for an omission they run from the day it came to the applicant's knowledge.

Leaving an omission unchallenged can cost the damages claim itself. In J. N. Christofides Ltd v. Attorney General, Civil Appeal 321/2018, decided by the Court of Appeal on 26 July 2024, the Ministry of Health's tender board cancelled a tender for radiology film and related consumables after its evaluation committee had recommended the company's bid. The cancellation was annulled for want of reasons. The company claimed 350,000 euro, and the Ministry answered that lost profit was not payable. The board never re-examined, and the company never challenged that omission. The Court of Appeal held that it had no cause of action under Article 146.6 and dismissed the appeal with 4,000 euro costs. Whether re-examination is needed, it added, depends on the facts, and above all on the ground on which the act was annulled.

Digicom sits on the other side of that line. The award to a competitor had been annulled, the contract had been fully performed, and the authority's own evaluation report said that the contract should go to Digicom if the competitor did not accept the conditions put to it. Re-examination was impossible in practice, the Court of Appeal accepted that the bid would have been awarded to Digicom, and the action for damages was not premature.

Put the claim to the authority first, in writing

Ask the authority to pay before you sue: Article 146.6 opens the courts only where the claim has not been satisfied. Nikolas v. Republic (2001) 1 A.A.D. 983 and Vnukovo Airlines and Another v. Attorney General (2001) 1 A.A.D. 969 were decided together by the full Supreme Court, and five of its judges held that a claim not first addressed to the administration, and left unsatisfied, gives no cause of action at all. In Koinopraxia A.D.T. the Supreme Court recorded, without disagreeing, the trial court's reminder of that prerequisite.

In Digicom the bidder's lawyers first called on the authority to comply and re-examine under Articles 146.5 and 146.6, then set out the damages item by item, and wrote again when nothing came of it. Those letters became evidence. A letter of that kind costs little and closes off a defence.

What has to be proved: loss caused by the annulled act itself

Damages are owed only for loss the annulled act caused, and the claimant has to prove what would have happened without it. In Eftychia Kyprianou v. Attorney General, Civil Appeals 6/2015 and 7/2015, decided on 13 September 2023, the Supreme Court listed the requirements: the annulment, the administration's refusal to restore legality, and proof of loss. In Nikolas a qualified pilot had a permit for an airline to employ foreign pilots annulled, then sued for the appointment he said he had lost. The majority held that compensation arises only where the loss was caused by the annulled decision or was its direct consequence, and that he had to prove he would have secured the appointment but for the annulled act. He had not.

Vnukovo applies the same test to a licence. An airline was refused an extension of its licence for charter flights from Moscow to Paphos, the refusal was annulled because it came from an organ without competence, and the airline sued for the profit it would have made. It had to prove that the competent organ would have granted the licence, and offered no such proof. The four judges who reasoned differently reached the same result: the airline never had a right to fly, only a right to have its application lawfully examined, and the remedy for that was a new recourse.

The consequences are concrete:

• A public servant passed over must show more than a won recourse. Frangoulides holds that the court may not assume a promotion that depended on the authority's discretion, only one that would have followed automatically by law.
• A bidder must show that the contract would have gone to it. In Digicom the authority's own evaluation report did that work.
• An owner refused a permit, or a business refused a licence, faces the Vnukovo question: would it have been granted?
• Costs thrown away are different. In Frangoulides the officer had paid for postgraduate studies to acquire qualifications the unlawful scheme demanded. That loss survived the re-examination, and the Court held it recoverable.

How just and reasonable compensation is measured

The measure is what is just between the citizen and the administration, a different test from full restoration at common law, although the Court of Appeal said in Digicom that the two may coincide. Frangoulides, following earlier Supreme Court authority, describes the relief as equitable and the damages as "not strictly compensatory", so the court may weigh the conduct of the parties and how far the claimant contributed to the wrongful act. In Kyprianou the Supreme Court repeated that the measure differs from the common law aim of full restoration, and agreed with the trial court that the amount is fixed by reference to parameters, not arbitrarily, although no mathematical formula applies.

Kyprianou shows the method for a landowner. Land expropriated in 1957 for police housing was partly never used for that purpose, and the authority's omission to return it was annulled. The trial court preferred the valuer who assessed rental value from comparable rents and sales. It then raised the rental values, 19,991 and 58,583 euro, to 30,000 and 70,000 euro for the owner's sense of injustice and her years of anxiety, and the Supreme Court upheld the awards.

Lost profit can be recovered, but only with proof. In Digicom the Court of Appeal held that lost profit, proved with the strictness the case law requires, can form part of just and reasonable compensation. Yet the bidder recovered only 9,736 euro: the cost of buying and studying the tender documents, preparing the bid, the guarantee, and legal fees for advice beyond the court proceedings. Its claim for 851,499 euro of lost profit failed, because the supply agreement said in terms that the authority was not bound to order the quantities specified.

Interest follows the general rule: section 33(2) of the Courts of Justice Law, Law 14/1960, makes a judgment carry interest from the date the action is filed, and the Supreme Court applied that date in Kyprianou.

Which court, against whom, and when

The claim is a civil action in a District Court, never part of the recourse. Frangoulides held that a recourse and an action for damages from the same act cannot run at the same time, and that annulment is a prerequisite of the action. The defendant is the Republic, through the Attorney General, where the act was that of a ministry or department, as in Christofides and Kyprianou, and the public body itself where the act was its own, as in Digicom.

Public procurement has a route of its own. Where the Tender Review Authority annuls a contracting authority's act, section 33 of Law 104(I)/2010 gives an interested party who has suffered loss a right to claim damages from the contracting authority by action in the court, which section 2 defines as the Nicosia District Court. Our article on the Tender Review Authority explains that route.

On time, the judgments discussed here do not settle which limitation period applies to a claim under Article 146.6, or when it starts. Treat the claim as one that delay can lose.

What this means in practice

1. Read the ground of annulment first. If the act fell for want of reasons, the authority may decide again, even the same way, and the damages claim waits on that re-examination, as Koinopraxia A.D.T. and Christofides show. If re-examination has become impossible and the file shows you would have won, Digicom points the other way.
2. Write to the authority. Ask it to comply and re-examine, and set out the loss claimed, with figures and documents.
3. Watch the re-examination, and the clock. A new decision, or the failure to make one, is challenged by a new recourse within 75 days. Leaving it unchallenged cost the company in Christofides its claim.
4. Keep the evidence of loss from the start. The evaluation report, ranking or scheme of service showing you would have succeeded; invoices for costs thrown away; the accounts and contract terms behind any lost profit; for land, valuations built on comparable rents and sales.
5. Then sue in the District Court, against the Republic or the public body whose act was annulled, once the claim is refused or ignored.

Questions we are asked

Sources

• Constitution of the Republic of Cyprus, Article 146, paragraphs 3, 5 and 6, consolidated text, CyLaw
• General Principles of Administrative Law Law of 1999, Law 158(I)/1999, consolidated text, sections 10, 57, 58 and 59, CyLaw
• Review Procedures in the Field of Public Contracts Law of 2010, Law 104(I)/2010, consolidated text, sections 2 and 33, CyLaw
• Courts of Justice Law of 1960, Law 14/1960, consolidated text, section 33(2), CyLaw
• Charilaos Frangoulides v. Republic (1982) 1 C.L.R. 462, Civil Appeal 6321, Supreme Court of Cyprus, 31 August 1982
• Charalambos Nikolas v. Republic (2001) 1 A.A.D. 983, Civil Appeal 10301, Supreme Court of Cyprus, 29 June 2001
• Vnukovo Airlines (V.A.) and Another v. Attorney General (2001) 1 A.A.D. 969, Civil Appeal 10311, Supreme Court of Cyprus, 29 June 2001
• Republic v. Androulla Petrou (2016) 3 A.A.D. 273, Revisional Appeal 107/2011, Supreme Court of Cyprus, 30 June 2016
• Koinopraxia A.D.T. - Omega A.T.E. and Others v. Republic, Revisional Appeal 42/2015, Supreme Court of Cyprus, 12 January 2022
• Eftychia Kyprianou v. Attorney General, Civil Appeals 6/2015 and 7/2015, Supreme Court of Cyprus, 13 September 2023
• J. N. Christofides Ltd v. Attorney General, Civil Appeal 321/2018, Court of Appeal of Cyprus, 26 July 2024
• Digicom Ltd v. Cyprus Telecommunications Authority, Civil Appeal 373/2018, Court of Appeal of Cyprus, 5 November 2025

This article is provided for general information purposes only and does not constitute legal advice.

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