Cyprus is a jurisdiction where a substantial number of businesses from all over the world maintain their assets. As such, it is a place that often becomes relevant when a party succeeds in an arbitration and subsequently seeks to enforce the arbitration award. It not however unusual that the assets are disposed of before they are discovered by the successful party.

The judgment issued in Lakis Georgiou Construction Ltd v. DI.MA.RO. Ltd (‘Lakis Georgiou’), 1 on 28 September 2018, demonstrates that measures are available to successful parties to annul their debtors’ disposal of assets for the purpose of enforcing judgments or arbitration awards. Though this particular case concerned real property, the same principles apply to assets of any kind, including bank deposits and securities.

Background of the case

A contractor succeeded in an arbitration against a hotel owner in relation to a hotel construction contract. The arbitration was rather straightforward, and related to a disagreement over the final account of the project. After extensive delays, the arbitration was concluded, resulting in an award of compensation, interest and costs in favour of the contractor.

The debtor (the hotel owner) applied to set aside the award. All grounds raised by the debtor in its application were dismissed by the first instance Court, except with respect to the interest rate in the award. The first instance Court found that the interest rate applied by the arbitrator was not justified in the circumstances, and reduced it to the default interest rate applicable to Court judgment.2 The first instance decision was approved by the Supreme Court.3

In turn, the creditor successfully applied for the recognition of the award.4 However, the first instance Court stayed the execution of the award pending the debtor’s appeal against the dismissal of the setting-aside application.

Pending the debtor’s appeal, the debtor, transferred the hotel property title to its three directors (and only shareholders). The creditor was therefore left with an award against a company in liquidation and with not assets whatsoever. The creditor’s attempt to enforce the award had thus far failed.

The creditor filed an inquiry with the local land registry seeking information about the transfer of hotel property title. The information provided disclosed that the transfer had been made as a gift – apparently for tax reasons – from the company to its directors, and that it had taken place after the award was issued.

On this basis, the creditor invoked the provisions of articles 91(A) and 91(C) of the Civil Procedure Law,5 and asked a first instance Court to i) annul the transfer, ii) register the title in the name of the debtor again, and iii) attach the hotel to satisfy the judgment debt.

Shortly after filing this application, the creditor also applied successfully for an interim injunction prohibiting any further transfer of title to the hotel. As a result, the directors of the judgment debtor were unable to transfer the hotel, until the main application was finally decided.


According to article 91(A) and 91(C) of the Civil Procedure Law, a court may set aside any disposal of an asset by a judgment debtor, if it was made with the intent of defrauding creditors. Under article 91(A)(2) of the Civil Procedure Law, any disposal is presumed to be fraudulent. Thus, the onus is on the debtor to prove that there was no such intention. Otherwise the disposal may be annulled by the court.

The debtor put forward various and contradictory explanations for the disposal of the asset. The first instance court rejected them and held that the available evidence did not suffice to rebut the presumption against the debtor. On this basis, the court granted the application and issued all three orders applied for by the creditor.

In Lakis Georgiou, on 28 September 2018, the Supreme Court affirmed the first instance court’s decision and noted that, when applied to arbitration, the relevant time for the presumption to arise was the time the award was issued. By finding that the transfer in question took place after the issuance of the award, the Supreme Court decided that the statutory presumption operated in favour of the creditor.

The Supreme Court noted that there was nothing in the evidence produced by the respondents that could rebut the presumption that the transfer was fraudulent. As with the first instance Court, the Supreme Court described the directors’ explanations - that their intention was to unify the particular plot of land with other property registered in their names and not to defraud the judgment creditor - as falling short of giving a reasonable and honest justification for the transfer. It was therefore clear to the Court that the transfer was rightly found to be null and void.


This case is one of the very few in which the provisions of articles 91(A) and 91(C) of the Civil Procedure Law have been invoked successfully by a creditor to annul a disposal of assets by a debtor, and probably the only case in Cyprus involving an arbitration award. Though tracing and identifying dissipated assets may be the real challenge in similar situations, this case demonstrates that enforcement measures are not necessarily exhausted when the debtor appears to have no assets.

Once a creditor discovers that the debtor owned assets in Cyprus, whether movable or immovable, which were subsequently disposed of, it may be worth considering the possibility of making an application to annul the transfers. In the case in question, it seems so far that the application created a substantial likelihood of full recovery for the creditor, where there initially appeared to be none.

The successful invocation of Articles 91 (A) and 91 (C) of the Civil Procedure Law may often depend on the use of other available procedural mechanisms. An interim injunction will frequently be required to prevent any further dissipation of assets. Where the assets are transferred to unknown persons, an order for discovery may be sought. Likewise, where the identity of the final or intermediary transferees is unknown, the creditor may seek to obtain such information by applying for an interim injunction for discovery.

Cyprus’s civil justice system is currently undergoing radical changes, with the drafting of new civil procedure rules, in the spirit of the English 1998 Civil Procedure Rules and the upcoming introduction of a third instance court, as the judiciary in Cyprus if for now based on a two-layer court system, where the Supreme Court is the only appeal instance. Importantly, the mechanisms for the enforcement of judgments and awards are being reviewed and will soon be replaced by, hopefully, more workable and efficient mechanisms. In these circumstances, the judgment in Lakis Georgiou is seen as a welcome move towards better treatment of judgment creditors.

Civil Appeal No.214/12 (

D.C. Paphos Originating Summons No.103/06, Judgment of 17 September 2007.

DI.MA.RO. Ltd v. Lakis Georgiou Construction Ltd [2010] 1 C.L.R. 223 (

D.C. Paphos Original Summons No.209/06, Judgment of 30 April 2012 (

Article 91(Α) provides: ‘(1) Acts of fraud against a judgment creditor constitute, inter alia, the following…: (a) any donation, transfer or surrender to any third party of any assets of the judgment debtor, or (b) any removal, concealment or other disposal of any of the assets of the judgment debtor, provided that they are done with the intention of preventing or delaying the satisfaction of the judgment debt ... (2)The actions referred to in paragraphs (a) and (b)… shall be presumed to have been made, unless proved otherwise, with intention to defraud the judgment creditor’. Article 91(C) provides: ‘(1) Any transfer, charge or other disposal of an asset by a judgment debtor may be annulled by the Court at the request of any judgment creditor ’.