Cap. 4 governs domestic arbitration. An international commercial arbitration is governed by Law 101/1987, which enacts the Model Law and reaches arbitrations seated abroad.
Most writing about arbitration in Cyprus, this firm's included until now, is about the Arbitration Law, Cap. 4. For a domestic dispute that is the right statute. For a contract between parties in different countries it is usually the wrong one, and the difference is not academic: the two regimes give the courts different roles, different grounds of challenge and different timetables.
The other statute is the International Commercial Arbitration Law of 1987, Law 101/1987, which enacts the UNCITRAL Model Law on International Commercial Arbitration adopted on 21 June 1985, as amended from time to time.
Which one applies, and why the question is not optional
Section 3(1) provides that, subject to any bilateral or multilateral inter state agreement in force in the Republic, Law 101/1987 applies exclusively to international commercial arbitrations. Section 3(3) puts the other side of the line: the Law does not affect other laws that make particular disputes non arbitrable, and the Arbitration Law, Cap. 4, continues to govern the arbitration of disputes that fall outside Law 101/1987.
So the regime is decided by the character of the arbitration, not by anything the parties choose to call it, and both defined words have to be satisfied.
International
Section 2(2) treats an arbitration as international if, at the time the arbitration agreement was concluded, the parties had their places of business in different States; or if one of the following lies outside the State in which the parties have their places of business: the place of arbitration, where that is fixed in or under the agreement, or the place where a substantial part of the obligations arising out of the commercial relationship is to be performed, or the place with which the subject matter of the dispute is most closely connected; or if the parties have expressly agreed that the subject matter relates to more than one State.
Section 2(3) deals with the awkward cases. Where a party has more than one place of business, the one with the closest relationship to the arbitration agreement counts; where a party has no place of business, its habitual residence does.
Commercial
Section 2(4) treats an arbitration as commercial if it concerns matters arising out of relationships of a commercial nature, whether contractual or not. Section 2(5) gives a list, expressly indicative rather than exhaustive: commercial transactions for the supply or exchange of goods or services, distribution agreements, commercial representation and agency, leases, construction of works, consulting services, engineering works, licensing, investment, financing, banking and insurance, concession agreements, joint ventures and other forms of industrial or professional cooperation, and the carriage of goods or passengers by air, sea, rail or road.
The four sections that reach an arbitration seated abroad
Section 3(2) confines the Law to arbitrations conducted in the Republic, with an exception that matters more than the rule: sections 8, 9, 35 and 36 are excepted. Those four therefore operate in Cyprus whatever the seat.
Section 8(1) obliges the court before which an action is brought on a matter that is the subject of an arbitration agreement to refer the dispute to arbitration, where a party so requests before submitting its first statement on the substance of the dispute, unless the court finds the agreement null and void, inoperative or incapable of being performed. Section 8(2) provides that bringing the action does not prevent the arbitration from being commenced or continued, or an award from being made, while the matter is pending before the court.
Section 9 gives the Court power, on the application of a party, to order interim measures at any time before the commencement of the arbitral proceedings or during them.
Sections 35 and 36 deal with recognition and enforcement. Under section 35(1) an award is recognised as binding irrespective of the country in which it was made, and the Court, on the written application of a party, issues an order for its enforcement, subject to the grounds of refusal. Under section 35(2) the applicant files a duly authenticated original or a certified copy, and where the award is not in an official language of the Republic the Court may require a translation. Section 36 lists the grounds on which recognition or enforcement may be refused, and they are the only ones.
The practical effect is that a party to an arbitration seated in London, Geneva or Dubai can come to a Cyprus court for interim relief against assets or parties here, and can bring the resulting award here for enforcement, using this Law.
What the court may and may not do
Section 6 states the principle the rest of the Law works out: in matters governed by the Law, the court may intervene only as the Law provides.
Section 5 is the trap for a party that keeps its powder dry. A party that takes part in the arbitral proceedings without reservation, knowing that a non mandatory provision of the Law or a term of the arbitration agreement has been breached, is deemed to have waived its right to object if it does not raise the objection in time, without undue delay or within the period allowed.
Challenging an award
Section 34(1) makes an application to set aside the exclusive recourse against an award. Section 34(2) limits the grounds to six.
Four have to be proved by the applicant: that a party to the arbitration agreement was under an incapacity, or that the agreement is not valid under the law to which the parties subjected it or, failing that, under the law of the Republic; that the applicant was not given proper and timely notice of the appointment of an arbitrator or of the proceedings, or was otherwise unable to present its case; that the award deals with a dispute not contemplated by or falling within the terms of the submission, or contains decisions beyond its scope, in which case only the excess may be set aside where it can be separated; or that the composition of the tribunal or the procedure was contrary to the parties' agreement, unless that agreement conflicts with a mandatory provision of the Law, or, absent agreement, contrary to the Law.
Two are for the Court to find of its own motion: that the subject matter is not capable of settlement by arbitration under the law of the Republic, or that the award conflicts with the public policy of the Republic.
Section 34(3) allows three months from notification of the award, after which the application is inadmissible; where an application under section 33 has been made, the three months run from the day the tribunal decides it. Section 34(4) gives the Court a discretion, on a party's application, to stay the setting aside proceedings for a period it fixes, so that the tribunal can resume the proceedings or take other steps capable of removing the ground relied on.
What this means in practice
Name the right statute in the clause. A clause drafted on the assumption that Cap. 4 applies, in a contract between parties in different States, is a clause drafted against the wrong background. The regime follows the definitions in section 2, not the label.
Object before you plead. Section 8(1) fixes the moment: the request to refer comes before the first statement on the substance. A defendant that answers the merits first has lost the point.
Cyprus is available for interim relief even where the seat is not here. Section 3(2) excepts section 9, so an application to a Cyprus court for interim measures does not depend on the arbitration being seated in Cyprus. Where assets or a counterparty are here, that is worth knowing before the tribunal is even constituted.
Diarise three months from notification. The setting aside application is the only recourse and the period is short. It is the date of notification of the award that starts it, not the date anybody decides to be dissatisfied.
The definition of Court in section 2(1) has also moved. It means the competent District Court or a judge of it and now includes the Admiralty Court and the Commercial Court established under Law 69(I)/2022. Since arbitration matters reach the Commercial Court regardless of the amount in dispute, an application under this Law may belong there: see the Commercial Court, and the case heard in English.
Questions we are asked
Which statute governs my arbitration?
It depends on whether the arbitration is both international and commercial. Section 3(1) of Law 101/1987 says the Law applies exclusively to international commercial arbitrations, and section 3(3) leaves the Arbitration Law, Cap. 4, to govern the arbitration of disputes outside it. The two words are defined: an arbitration is international under section 2(2) where the parties had their places of business in different States when they made the agreement, or where the seat, or the place where a substantial part of the obligations is to be performed, or the place most closely connected with the subject matter, lies outside the State where they have their places of business, or where the parties expressly agreed that the subject matter relates to more than one State.
What counts as commercial?
Section 2(4) says an arbitration is commercial if it concerns matters arising out of relationships of a commercial nature, contractual or not, and section 2(5) gives a list that is expressly not exhaustive: the supply or exchange of goods or services, distribution agreements, commercial representation and agency, leases, construction of works, consulting services, engineering works, licensing, investment, financing, banking and insurance, concession agreements, joint ventures and other forms of industrial or professional cooperation, and the carriage of goods or passengers by air, sea, rail or road.
Can I get an injunction from a Cyprus court if the arbitration is abroad?
Yes, and this is the provision most often missed. Section 3(2) applies the Law only to arbitrations conducted in the Republic, but expressly excepts sections 8, 9, 35 and 36. Section 9 gives the Court power, on the application of a party, to order interim measures at any time before the arbitration begins or during it. Because section 9 is one of the excepted provisions, that power is available in Cyprus even where the seat is elsewhere.
The other side sued instead of arbitrating. What happens?
Section 8(1) requires the court before which the action is brought to refer the dispute to arbitration if a party so requests before submitting its first statement on the substance of the dispute, unless it finds the agreement null and void, inoperative or incapable of being performed. The request has to come before that first statement. Section 8(2) adds that the action does not prevent the arbitration from starting or continuing, or an award from being made, while the matter is pending in court.
How long do I have to challenge an award?
Three months. Section 34(1) makes an application to set aside the exclusive recourse against an award, and section 34(3) requires it within three months of notification of the award, failing which it is inadmissible. Where a section 33 application has been made, the three months run from the day the tribunal decides it. Section 34(4) lets the Court stay the setting aside proceedings to give the tribunal a chance to cure the ground relied on.
Sources
This article is provided for general information purposes only and does not constitute legal advice.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 23 August 2026
Need advice on your own matter?
Send us the documents and a short description at office@kleanthousplatis.com and we will reply within one business day.
Or use the enquiry form, message us on WhatsApp, or call +357 22 680 330.
When Cyprus law changes, hear it from us
One short email when something changes that matters: new legislation, a decision worth knowing, a deadline. Written by the partners, no marketing, unsubscribe with one click.
Your address is used for these updates and nothing else.
More on this: What a Court Case in Cyprus Actually Costs, Bringing a Claim Without a Lawyer in Cyprus, Being sued in Cyprus?, The Civil Procedure Rules 2023: A Practical Guide.