126 EuCML · Issue 3/2018
Country Reports
Soterios Loizou*
Consumer ADR in the Republic of Cyprus
I. Introduction
The Republic of Cyprus was founded on the eve of the
decolonisation period of the 1960 s.1 Located in the south-
eastern corner of Europe, Cyprus is the third largest island in
the Mediterranean, counting a population of approximately
one million. Thanks to its booming economy and close his-
torical ties with Europe, Cyprus joined the European Union
in 2004.2
In a constant balance between its British colonial common
law past and the civil law influence from neighbouring
Greece, Cyprus may be described as a mixed legal order.3
This familiarity of the highly qualified Cypriot Bar with both
the civil law and the common law traditions, together with
the political stability in the country, and the convenient loca-
tion of the island at the cross-roads of three continents, have
contributed to the rise of Cyprus as a key-ADR venue in the
region.4
Specifically, domestic and international commercial arbitra-
tion have prospered under the Arbitration Law of 19445 and
the International Commercial Arbitration Law of 1987,6
which were modelled after the UK Arbitration Act of 1950
and the UNCITRAL Model Law respectively. This pro-arbi-
tration regulatory framework has been complemented by the
ratification of the Convention on the Recognition and Enfor-
cement of Foreign Arbitral Awards (New York, 1958)7 and
the ICSID Convention (Washington, 1965),8 as well as by the
conclusion of nearly 30 Bilateral Investment Treaties (BITs)
with foreign countries.9 In addition to arbitral proceedings,
the Mediation Law of 2010,10 which implemented Direc-
tive 2008/52/EC,11 has created a very progressive environ-
ment for the mediation of domestic and cross-border civil
disputes alike.12
In stark contrast to the aforementioned strong position of
commercial ADR in the country, consumer ADR remained,
until recently, undeveloped. In examining the current status
of consumer ADR in the Republic of Cyprus, this Country
Report comprises three parts: Title I sets out the relevant
regulatory framework before the transposition of Direc-
tive 2013/11/EU into Cypriot law; Titles II–IV delineate
various facets of the consumer ADR regime currently in force
under the Law on the Alternative Dispute Resolution of Con-
sumer Disputes of 2017; lastly, Title V explores the applica-
tion of Regulation No. 524/2013 on Online Dispute Resolu-
tion (ODR) to consumer disputes linked to the Republic of
Cyprus.
II. Consumer ADR in Cyprus before the
implementation of Directive 2013/11/EU
1. The Consumer Arbitration Regime of Law No. 78(I)
2011
For nearly 50 years since the foundation of the Republic,
there had been no structured ADR regime for consumer dis-
putes in Cyprus. Both domestic and cross-border consumer
disputes had to be resolved through either limited mediation/
arbitration13 or classic litigation proceedings—with whatever
costs in time and money such an endeavour would entail to
the parties. As a result, most consumer disputes remained
unsettled to the detriment, of course, of the aggrieved con-
Electronic copy available at: https://ssrn.com/abstract=3241395
Loizou, Consumer ADR in the Republic of Cyprus
sumer. This procedural gap was filled by Law No. 78(I)2011,
which introduced a mechanism for the out-of-court settle-
ment of consumer disputes.14
The statute set up an arbitration regime for claims arising
from either the sale, leasing or renting of goods, or the provi-
sion of services to consumers.15 The regime was available to
consumers for claims up to EUR 3,000, excluding interest
and other claim-related expenses.16 The proceedings would
be conducted under the aegis and supervision of the Ministry
of Commerce, Industry and Tourism.17 In particular, follow-
ing the filing of a claim by the consumer against the trader,18
the Consumer Protection Service of the Ministry would ex-
amine the timeliness and good order of the request for arbi-
tration.19 One of the most important—if not the most impor-
* Soterios Loizou, Teaching Fellow in Commercial Law, King’s College
London, School of Law; LL. M. mult. (UoA, NYU), PhD (Cambridge),
Esq, Email: soterios.loizou@kcl.ac. uk.
1 Cyprus Act 1960, c. 52 (Regnal. And 9 Eliz 2), s. 1 (U. K.).
2 See Act concerning the conditions of accession of the Czech Republic,
the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia,
the Republic of Lithuania, the Republic of Hungary, the Republic of
Malta, the Republic of Poland, the Republic of Slovenia and the Slovak
Republic and the adjustments to the Treaties on which the European
Union is founded—Protocol No 10 on Cyprus, OJ L 236/955. See also
U. N. Security Council, ‘Resolution 541’ (18 November 1983) S/RES/
541, available at http://www.un.org/ga/search/view_doc.asp?symbol=S/
RES/541 %281983 %29; UNSC ‘Resolution 550’ (11 May 1984) S/
RES/550, available at http://www.un.org/ga/search/view_doc.asp?sym-
bol=S/RES/550 %281984 %29.
3 See generally Symeon C. Symeonides, ‘The Mixed Legal System of the
Republic of Cyprus’ (2003) 78 Tul.L. Rev. 441. See also Nikitas E.
Hatzimihail, ‘Cyprus as a Mixed Legal System’ (2013) 6 JCLS 37, 38,
“Cyprus presents us with its own kind of a mixed legal system: its
private law is mostly common law, long codified in statutes. Its public
law derives from the continental tradition. Procedural law is purely
common law—a major factor in the mutation of the ‘continental’ ele-
ments of the legal system.”
4 Important mediation and arbitration service providers in Cyprus are:
the Cyprus Chamber of Commerce and Industry (CCCI;
www.ccci.org.cy), the Cyprus Arbitration & Mediation Centre (CAMC;
http://cyprusarbitration.org.cy), the Cyprus Eurasia Dispute Resolution
and Arbitration Centre (CEDRAC; www.cedrac.org), and the Euro-
Mediterranean ADR Centre (www.euromedadr.org).
5 Arbitration Law 1944 (Cap. 4) (as amended).
6 Law on International Commercial Arbitration and Relevant Matters
1987, N. 101/87.
7 Law on the Convention and Enforcement of Foreign Arbitral Awards
(Ratification) 1979, N.84/1979. See also Law on the Recognition, Re-
gistration and Enforcement of Foreign Judgments/Awards 2000, N. 121
(I)2000.
8 Law on the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States (Ratification) 1966, N.
64/1966.
9 For a list of the Bilateral Investment Treaties (BITs) concluded by the
Republic of Cyprus, see http://investmentpolicyhub.unctad.org/IIA/
CountryBits/54#iiaInnerMenu.
10 Law on Certain Aspect of Mediation in Civil Matters 2012, N. 159(I)
2012.
11 Directive 2008/52/EC of the European Parliament and of the Council of
21 May 2008 on certain aspects of mediation in civil and commercial
matters, OJ L 136/3.
12 See generally Achilles C. Emilianides and Natalia Charalampidou, ‘Cy-
prus’ in Carlos Esplugues (ed), Civil and Commercial Mediation in
Europe: Cross-Border Mediation, vol II (Intersentia 2014).
13 See ibid art. 3(2), “This Law shall not apply—(a) to any civil disputes …
concerning rights and obligations that the parties are not free to agree
upon under the applicable law.”
14 Law on the Out-of-Court Settlement of Consumer Claims through
Arbitration, N. 78(I)2011.
15 ibid art. 2.
16 ibid art. 3(1).
17 ibid art. 4.
18 ibid arts. 5, 11.
Loizou, Consumer ADR in the Republic of Cyprus
Country Reports
tant—elements of the request was the provision of evidence
that the trader has agreed in writing to the resolution of the
dispute under the consumer arbitration mechanism, or has
voluntarily registered in a special list of traders that consent
up front to consumer arbitration proceedings.20 Upon review
of the complaint, the Consumer Protection Service would
appoint a sole arbitrator,21 who would set the time and place
of a hearing.22 The parties were required to appear either in
person or through representatives.23 The absence of the tra-
der from the hearing or her refusal to participate in the
arbitration proceedings altogether would not preclude the
arbitrator from rendering an award on the merits of the
dispute.24 Finally, the arbitrator was required to render an
award within 30 days from the scheduled hearing.25
Notwithstanding the significance of Law No. 78(I)2011 for
consumer protection in the country, the low value of consu-
mer transactions together with the comparatively high cost of
triggering the arbitration mechanism prevented consumers
from taking advantage of the regime.26 Presumably, the risk
of being awarded neither the arbitration filing fee nor the
arbitrator’s fees contributed to the sparse use of this dispute
resolution avenue by consumers.27 Importantly, the financial
ceiling of EUR 3,000 precluded hundreds of forex products
consumers from pursuing their claims through the arbitration
mechanism of Law No. 78(I)2011.28
2. The relevance of ADR for the settlement of
consumer disputes
Due to the disproportionate costs of pursuing claims through
litigation or consumer arbitration proceedings and the arbi-
trary financial ceiling imposed by Law No. 78(I)2011, con-
sumers turned to other means of redress, such as the amicable
settlement of disputes facilitated by the Financial Ombuds-
man and the European Consumer Centre of Cyprus.
The Office of the Financial Ombudsman was established in
2010 under Law No. 84(I)2010.29 Upon written request by a
consumer,30 the Financial Ombudsman offers mediation ser-
vices for the settlement of domestic and cross-border claims
up to EUR 170,000 between customers and banks, insurance
companies, investment firms, or other financial institutions.31
The proposals rendered by the office are not binding, unless
the parties agree differently in writing.32 Be that as it may, the
weight of the Ombudsman’s non-binding proposal in court
proceedings cannot be overstated. It should be noted, at this
point, that this ADR mechanism is available not only to
natural persons, but also to legal entities, charity foundations
and trusts that have received financial, investment, insurance
or payment services.33 Although not approved as an ADR
entity yet,34 the Office of the Financial Ombudsman con-
tinues to offer mediation services between customers and
firms established in the country.
Shifting to cross-border consumer disputes,35 the European
Consumer Centre of Cyprus (ECC Cyprus) has offered in-
valuable support to consumers by handling and facilitating
the amicable resolution of approximately 1,600 complaints
in the course of eleven years (2006–2016). It is noteworthy
that approximately 57 % of the complaints have been filed
by consumers residing in Cyprus against traders established
in EU or EEA states. The remaining 43 % of the complaints
have been filed by other EU or EEA consumers against tra-
ders established in Cyprus. Given the remoteness of Cyprus
from mainland Europe and the significant contribution of
inbound tourism to the country’s GDP, it should come as no
surprise that the greater part of consumer complaints pertain
to tourism and travel-related services. In detail, one third of
Electronic copy available at: https://ssrn.com/abstract=3241395
Issue 3/2018 · EuCML 127
all complaints received relate to transport services, followed
by communications, recreation & culture, restaurants, hotels
and accommodation services, and other complaints.
III. Consumer ADR in Cyprus after the
implementation of Directive 2013/11/EU
The promulgation of Directive 2013/11/EU constitutes a
milestone in consumer ADR in the European Union.36 With a
view to implementing the Directive, the Cypriot legislator
enacted Law No. 148(I)2015, which was repealed and sub-
stituted by Law No. 85(I)2017 two years later.
Law No. 148(I)2015 established a “hybrid” legal framework
whereby the “old” Law of 2011 was supplemented with
provisions reflecting the mandates of the European legisla-
tion.37 Although the spirit of building on prior and already-
tested legislation was laudable, the final act was incongruous
with the provisions of the EU Directive. Specifically, the
Law of 2015 preserved the consumer arbitration mechanism
administered by the Consumer Protection Service, but did
not relieve the latter from its duties as supervising author-
ity.38 Hence, the Service was designated as both ADR entity
and supervising authority. The failure of Cyprus to draw this
important distinction and to fully transpose the Directive in a
timely manner has resulted in an EU Pilot investigation, that
is, an informal dialogue between the Commission and the
Republic of Cyprus prior to the launching of a formal infrin-
gement procedure against the latter. In response to this turn
of events, Cyprus enacted a new consumer ADR statute—the
third in seven years—namely Law No. 85(I)2017.39
19 ibid arts. 4, 6, 12.
20 ibid arts. 10(2), 4(4).
21 ibid art. 14(2).
22 ibid art. 16.
23 ibid art. 18.
24 ibid arts. 23(4), 24.
25 ibid art. 23(1), 25.
26 The consumer was required to pay both the complaint filing fee and the
arbitrator’s fee under art. 11 and Annex II, and art. 7(7) respectively.
Complaint filing fee: EUR 5 for claims up to EUR 427; EUR 9 for claims
up to EUR 854; EUR 13 for claims up to EUR 1,700; EUR 17 for claims
above EUR 1,700, but up to the ceiling of EUR 3,000. Arbitrator’s fee:
EUR 85 for claims up to EUR 1,000; EUR 170 for claims above EUR
1,000, but up to the ceiling of EUR 3,000.
27 ibid art. 23(3)(b). See also art. 23(4).
28 This issue was not resolved under Law No. 148(I)2015 either, albeit the
financial ceiling was raised to EUR 5,000 by virtue of art. 3(1)(a).
29 Law Relating to the Establishment and Operation of a Single Agency for
the Out-of-Court Settlement of Disputes of Financial Nature of 2010 to
2015, N 84(I)2010 (as amended).
30 ibid arts. 2, 9(1), 11–12. Pursuant to art. 15(2)(a), the filing fee of EUR
20 must be paid by the consumer.
31 ibid art. 4(1).
32 ibid art. 14. The Ombudsman’s proposal may award damages to the
consumer up to the amount of EUR 50,000, including any interest
accrued.
33 ibid arts. 2, 10.
34 N. 85(I)2017, art. 19.
35 For the purposes of this analysis, “cross-border” consumer disputes
should be understood as disputes whereby one of the contracting parties
was located in Cyprus, while the other maintained her place of business
or habitual residence in another EU Member State or EEA state, at the
time of the conclusion of the contract.
36 Directive 2013/11/EU of the European Parliament and of the Council
of 21 May 2013 on alternative dispute resolution for consumer disputes
and amending Regulation (EC) No 2006/2004 and Directive 2009/22/
EC (Directive on consumer ADR), OJ L 165/63.
37 Law on the Out-of-Court Settlement of Consumer Claims through
Arbitration 2015, N. 148(I)2015.
38 See Directive 2013/11/EU, arts. 18–20. Cf N. 85(I)2017, art. 20.
39 The new law was enacted on 7 June 2017, almost two years after the
implementation deadline of Directive 2013/11/EU, i.e., 5 July 2015
(art. 25(1)).
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Country Reports
IV. Consumer ADR under Law No. 85(I)2017
40
Law No. 85(I)2017 consists of five parts and 26 articles. As
one would expect, the erroneous transposition of the Direc-
tive under Law No. 148(I)2015, together with the infrequent
adjudication of consumer disputes in the country, limited
legislative creativity and experimentation in the new regime.
Thus, Law No. 85(I)2017 follows closely—in a near word-
to-word translation—the text of the EU Directive.
1. The consumer ADR procedure
The new law expands consumer ADR beyond the confines of
the binding arbitration regime of Law No. 148(I)2015.
Although the Consumer Protection Service remains the key-
point of reference for the out-of-court resolution of consumer
disputes,41 under the Law of 2017, the Service operates as
supervising state authority, rather than as exclusive adminis-
trator of consumer arbitration proceedings. Consumer ADR
may now be administered by special entities—either private
entities or public institutions—that have passed through rig-
orous assessment by the state. In order to be listed by the EU
Commission and receive the EU “trustmark,” each respective
ADR entity needs to conform to a number of quality prere-
quisites delineated in the implementing legislation.42 The
ADR entities, however, are free to determine both the sub-
ject-matter of the consumer disputes that they resolve and the
type of ADR services that they offer, i.e. binding arbitration
or non-binding mediation/conciliation proceedings.43
As regards the procedure, in the event of a dispute arising
from the sale of goods or the provision of services between a
consumer and a trader that is established in Cyprus,44 the
former needs to file a complaint with an ADR entity against
the latter. This request for ADR may be made either online
or offline,45 and, depending on the entity selected, at no or
nominal only cost to the consumer.46 If the consumer is
residing in a Member State other than Cyprus,47 the consu-
mer may make use of the ECC Cyprus in order to file her
request with the selected ADR entity.48 A complete applica-
tion with a certified ADR entity initiates the proceedings and
suspends any relevant prescription or limitation periods.49
Upon the filing of the consumer’s application, the ADR entity
decides whether to reject the request at the outset or to
proceed with a review of the merits of the dispute.50 Should
the ADR entity accept the application, it administers the
entire process until the issuance of a binding award or non-
binding proposal to the parties, typically, within 90 days
from the receipt of the consumer’s request.51
2. The consumer ADR entities
Due to the delay incurred from the erroneous transposition
of the Directive, only one entity has been approved so far in
the Republic of Cyprus, namely the Office of the Commis-
sioner of Electronic Communications and Postal Regulation
(OCECPR).52 It should be expected, nonetheless, that more
ADR entities—including a general or residual competence
entity—will be assessed and approved in the foreseeable
future.
The Office of the Commissioner of Electronic Communica-
tions and Postal Regulation (OCECPR) is a public ADR
entity linked to the Ministry of Transport, Communications
and Works.53 Serving as a special competence entity in Cy-
prus, the OCECPR may be used for the arbitration of con-
sumer disputes arising from postal services and electronic
communications against traders established in the country.
The procedure initiates with the filing of an application—free
of charge—by the consumer. The proceedings encompass
Electronic copy available at: https://ssrn.com/abstract=3241395
Loizou, Consumer ADR in the Republic of Cyprus
both written and oral elements, are conducted in either Greek
or English, and do not require the physical presence of the
parties or their representatives. The average length of the
process is 30 days from the filing of the application. The
OCECPR retains the right to refuse rendering an award, if
the consumer has failed to contact the trader in an attempt to
resolve the matter bilaterally. Set up and operating already
before the enactment of Law No. 85(I)2017, the OCECPR
has received approximately 250 complaints and has success-
fully resolved or closed 200 of them since January 2017.
V. The principles of consumer ADR under Law No. 85
(I)2017
As already noted, the failure of the Republic of Cyprus to
fully implement the mandates of Directive 2013/11/EU under
Law No. 148(I)2015 has led to the near word-to-word trans-
lation and integration of the latter into the national legal
system. For the consumer ADR principles delineated in Law
No. 85(I)2017 barely differ from those in the EU instrument,
they need not be reiterated here. Nonetheless, concerns may
be raised with regard to the attainment of the Directive’s
accessibility and transparency standards in the country.54
Specifically, notwithstanding the existence of relevant web-
sites, where consumers can submit complaints to the respec-
tive ADR entities—approved and non-approved bodies alike
—and attach any supporting documents, the maze-like struc-
ture of these webpages renders navigation very difficult and
potentially confusing to consumers. Furthermore, there is
hardly any information on the rules governing the ADR
proceedings, the formation of the arbitral tribunals or media-
tion panels, the roster of the available experts, or any perti-
nent statistical information on ADR practices. Important as
the above may be, the growing number of ADR proceedings
initiated by aggrieved consumers evidences that the mechan-
isms devised in Cyprus are both trustworthy and effectively
communicated to the public. In any case, full compliance
with the law could be achieved by merely amending the
websites of the respective ADR entities.
40 Law on the Alternative Dispute Resolution of Consumer Disputes 2017,
N. 85(I)2017.
41 ibid art. 2(1).
42 ibid arts. 4(3), 6(3)(b). See Directive 2013/11/EU, arts. 5–12; N. 85(I)
2017, arts. 6–13. See also Commission Recommendation of 30 March
1998 on the principles applicable to the bodies responsible for out-of-
court settlement of consumer disputes (98/257/EC), OJ L 115/31; Com-
mission Recommendation of 4 April 2001 on the principles for out-of-
court bodies involved in the consensual resolution of consumer disputes
(2001/310/EC), OJ L 109/56.
43 ibid art. 4.
44 ibid art. 4(1).
45 ibid arts. 6(2)(c), 9(a).
46 ibid art. 9(c).
47 ibid art. 2(1). It is noteworthy that neither the Directive nor the imple-
menting legislation extend the application of the instrument to consu-
mers residing in EEA states.
48 ibid art. 15.
49 ibid Art. 13(2).
50 ibid arts. 6(4), 6(5).
51 ibid art. 9(e).
52 As of the day of this Country Report, the Consumer Protection Service
has been listed as an ADR entity in the relevant registry maintained by
the EU Commission. Be that as it may, the Consumer Protection Service,
as the supervising authority in the Republic of Cyprus, cannot adminis-
ter ADR proceedings altogether. It should be expected that this entry
will be removed from the Commission’s registry soon.
53 See generally http://www.ocecpr.org.cy/.
54 See Directive 2013/11/EU, arts. 5, 7; N. 85(I)2017, arts. 6, 8.
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VI. Regulation No. 524/2013 on ODR and consumer surprising, the above figures reflect, firstly, the strength of the
disputes in Cyprus consumer protection movement in Germany, secondly, the
prominence of the UK as business, travel and education
Regulation No. 524/2013 has taken consumer ADR to new
destination for Cypriots, and, thirdly, the selection of Cyprus
heights.55 It does not create an alternative dispute resolution
as preferred travel destination by more than 3.5 million EU
system per se. Rather, it provides for the creation of an online
and EEA consumers each year.60
platform,56 which would serve as the single point of entry for
the filing of complaints arising from online sale or service
contracts.57 Succinctly, the platform facilitates the submis-
VII. Conclusion
sion, processing and transmission of complaints to the re-
spondent party and the consumer ADR entity that has been The accession of Cyprus to the EU has truly transformed the
selected by the parties for the resolution of the dispute en- consumer ADR scene in the country. The regulatory and
sued.58 With more than 62,500 complaints filed in approxi- institutional vacuum has been replaced by a windfall of legal
mately two years of operation,59 the EU complaints platform instruments and entities that empowered consumers by mate-
has already proven very successful. rializing the theoretical only coercive power of consumer
protection law. Hence, the growing number of complaints
Focusing on consumer ODR cases linked to Cyprus, 125 com-
filed by consumers residing in Cyprus or against traders
plaints have been filed by consumers residing in the country.
established in the country amplifies the awareness by consu-
The greater part of these complaints were made against tra-
mers and the effectiveness of the consumer ADR regime
ders established in the UK (25), Germany (23), and Hungary
currently in force, as well as the trust bestowed upon the
(21), with traders established in Cyprus (14) coming fourth
consumer ADR bodies available to the public. Importantly,
in place. Conversely, 149 complaints have been received
the experience of consumer ADR in Cyprus illustrates that
against traders established in Cyprus. More than half of these
consumer protection provisions, if paired with low-cost, sim-
complaints were filed by consumers residing in five of the
ple and quick redress mechanisms, cease to be dead letter,
largest Member States, namely Germany (20), Italy (17),
thus fostering consumer confidence and contributing to the
France (16), UK (16) and Poland (15) in that order, followed
functioning of the internal market. &
at the sixth place by consumers in Cyprus (14). Far from

55 Regulation (EU) No 524/2013 of the European Parliament and of the

Council of 21 May 2013 on online dispute resolution for consumer
disputes and amending Regulation (EC) No 2006/2004 and Directive
2009/22/EC (Regulation on consumer ODR) [2013] OJ L 165/1.
56 The platform may be accessed at https://ec.europa.eu/consumers/odr/
main/?event=main.home.show.
57 ibid art. 4(1)(e), “‘Online sales or service contract’ means a sales or
service contract where the trader, or the trader’s intermediary, has
offered goods or services on a website or by other electronic means and
the consumer has ordered such goods or services on that website or by
other electronic means.”
58 ibid art. 9.
59 For figures and statistics on the use of ODR platform, see https://
ec.europa.eu/consumers/odr/main/?event=main.statistics.show. See also
Report from the Commission to the European Parliament and the
Council on the functioning of the European Online Dispute Resolution
platform established under Regulation (EU) No 524/2013 on online
dispute resolution for consumer disputes, COM/2017/0744.
60 For figures and statistics on inbound and outbound tourism in Cyprus,
see http://www.mof.gov.cy/mof/cystat/statistics.nsf/services_71main_en/
services_71main_en?OpenForm&sub=1&sel=2.

Electronic copy available at: https://ssrn.com/abstract=3241395