Enforcement of English Judgments in Cyprus
Court of Appeal Upholds Third-Party Litigation Funding and Restricts Public Policy Challenges
10 August 2026
A recent judgment of the Cyprus Court of Appeal provides important guidance on the recognition and enforcement of English court judgments in Cyprus, third-party litigation funding, the doctrines of maintenance and champerty, and the limited circumstances in which recognition may be refused on public policy grounds.
In Civil Appeal No. E.56/2022, decided on 5 March 2026, the Court of Appeal upheld the recognition in Cyprus of two judgments of the High Court of Justice of England and Wales requiring the appellants to pay approximately £8 million in legal costs, together with interest.
The Court rejected all challenges to recognition, including arguments that the litigation-funding arrangement supporting the English proceedings was contrary to Cyprus public policy, that the applicants had failed to make full and frank disclosure when obtaining the initial recognition order, and that the English orders were neither final nor sufficiently quantified.
The judgment is particularly relevant to international judgment creditors, litigation funders, businesses with assets in Cyprus, trustees, beneficiaries and parties involved in cross-border fraud and asset-recovery proceedings.
Background to the English proceedings
The underlying English proceedings began in 2013 and concerned allegations of extensive fraud. On 22 December 2017, the English High Court entered judgment in favour of the claimants for approximately US$298 million against two of the defendants.
The appellants in the subsequent Cyprus proceedings were the wife and mother-in-law of one of those defendants. They were later joined to the English action for costs purposes on the basis that they had funded a substantial part of that defendant’s legal defence.
On 8 October 2019, the English Court ordered the appellants to pay the claimants’ costs. A further order dated 17 October 2019 required them to pay approximately £8 million, plus interest.
The successful parties obtained certificates under Article 54 of Regulation (EC) No. 44/2001 and applied to the District Court of Larnaca for recognition and enforcement of the English judgments in Cyprus.
The recognition order was granted on 29 January 2020. The appellants subsequently applied to have it set aside. That application was dismissed by the District Court, leading to the appeal before the Cyprus Court of Appeal.
Which European recognition regime applied?
One of the principal issues was whether the judgments were governed by:
- Regulation (EC) No. 44/2001, commonly referred to as the Brussels I Regulation, or
- Regulation (EU) No. 1215/2012, commonly referred to as the Brussels I Recast Regulation.
The appellants argued that the relevant proceedings against them began only when they were joined as parties in 2019. On that basis, they contended that Regulation 1215/2012 should apply.
The Court of Appeal rejected this argument. Under Article 66(2) of Regulation 1215/2012, Regulation 44/2001 continues to apply to judgments issued in legal proceedings commenced before 10 January 2015.
The Court held that the decisive date was the date on which the principal English action commenced, namely 2013. The later joinder of the appellants for costs purposes did not create a separate action for the purpose of the transitional provisions.
The English Court had also issued the relevant enforcement certificates under Article 54 of Regulation 44/2001, having itself determined that the dispute fell within that Regulation. This aspect of the judgment must be understood in its particular transitional context. The United Kingdom was an EU Member State at the relevant time, and the underlying proceedings began in 2013. The decision should therefore not be interpreted as establishing that every English judgment issued in current or post-Brexit proceedings is enforceable in Cyprus under the same European regime.
Nevertheless, the Court’s analysis remains important in relation to transitional cases and more generally in explaining the limited role of a Cyprus court when asked to recognise a qualifying foreign judgment.
Recognition is not a reconsideration of the merits
The Court emphasised that the purpose of Regulation 44/2001 was to simplify and facilitate the recognition and enforcement of judgments between EU Member States.
At the initial recognition stage, the Cyprus court examines whether the formal requirements under the Regulation have been satisfied. It cannot review the foreign judgment on its merits.
Article 36 expressly prohibits a substantive reconsideration of the foreign judgment. Similarly, Article 45(2) prevents the court hearing a challenge to recognition from conducting an appeal against the decision of the court of origin.
The available grounds for resisting recognition are therefore narrow and exhaustively defined. They include manifest incompatibility with public policy, failure to serve an originating document in sufficient time in default cases, and incompatibility with certain earlier judgments.
A defendant cannot use recognition proceedings as an indirect appeal or as an opportunity to relitigate factual or legal issues already determined by the foreign court.
Third-party litigation funding and Cyprus public policy
A central feature of the appeal was the involvement of Harbour Fund III LP, which had funded the successful parties’ pursuit of the English fraud proceedings.
The appellants argued that the funding arrangement offended the historic doctrines of maintenance and champerty and was therefore contrary to Cyprus public policy.
Maintenance traditionally refers to the improper support of litigation by a third party with no legitimate interest in the dispute. Champerty is an aggravated form of maintenance in which the third-party funder receives a share of the proceeds recovered through the litigation.
Historically, these doctrines sought to prevent powerful third parties from promoting speculative claims, manipulating proceedings, influencing witnesses or otherwise interfering with the administration of justice.
The Court of Appeal, however, recognised that the law has evolved substantially. Maintenance and champerty were abolished as crimes and torts in England by the Criminal Law Act 1967, although a residual public-policy jurisdiction remained capable of invalidating funding arrangements that threatened the proper administration of justice.
Modern courts do not treat litigation funding as inherently unlawful. Instead, they examine whether the particular arrangement:
- promotes dishonest, frivolous or unnecessary litigation
- permits the funder to exercise excessive control over the proceedings
- creates an incentive to suppress evidence or influence witnesses
- encourages an improper or abusive settlement
- produces an extortionate or unconscionable return, or
- otherwise undermines the integrity of the judicial process.
The Court referred to the modern English approach, including authorities emphasising that properly structured funding may facilitate access to justice rather than obstruct it.
Significantly, the Court noted that it had identified no previous Cyprus appellate authority directly addressing litigation-funding agreements.
It therefore considered the earlier Cyprus decision in Chariton Xenophondos v Valentini Anastassiadou, in which the District Court examined maintenance and champerty in the context of an agreement by a third party to cover potential liability arising from litigation.
That decision established that a transaction should be examined according to its substance. The relevant question is whether it is a bona fide arrangement supporting legitimate litigation or an improper transaction intended to encourage unjust claims or gamble on the outcome of legal proceedings.
A third party’s entitlement to receive part of the proceeds does not, by itself, render the arrangement unlawful.
The Harbour funding arrangement was not improper
Applying those principles, the Court of Appeal of Cyprus found no evidence that the agreement with Harbour Fund III LP was illegal, improper, extortionate or contrary to the administration of justice.
The funding had enabled the respondents to pursue the English fraud proceedings. It was known to the English Court and had not been successfully challenged during the English proceedings.
There was no evidence that Harbour had encouraged unnecessary litigation or promoted a claim it did not genuinely believe to be valid or exercised improper control or interfered with witnesses or evidence or otherwise corrupted the litigation process.
The Court characterised the arrangement as a bona fide funding arrangement intended to enable the commencement and continuation of the English proceedings. Accordingly, it did not violate the doctrines of maintenance or champerty, did not offend Cyprus public policy and could not provide a basis for refusing recognition under Article 34(1) of Regulation 44/2001.
The judgment does not establish that every litigation-funding agreement will necessarily be valid in Cyprus. It confirms instead that funding is not inherently objectionable and that the substance, purpose, degree of control and commercial effect of the arrangement must be examined.
Public policy is an exceptional defence
The Court reaffirmed that the public-policy defence must be interpreted restrictively. Recognition may be refused only where it would result in a manifest breach of a rule regarded as essential within the Cyprus legal order or of a fundamental right recognised by that legal order.
It is not enough to allege that the foreign court made an error of law, adopted a different procedural approach or reached a conclusion that a Cyprus court might not have reached. Relying on established Court of Justice of the European Union authority, including Krombach v Bamberski, Renault v Maxicar and Apostolides v Orams, the Court stressed that public policy cannot operate as a “disguised appeal”.
Mutual trust between the courts of Member States requires foreign decisions to be recognised unless one of the strictly defined and exceptional grounds for refusal is established.
No equivalent duty of full and frank disclosure
The appellants also argued that the respondents had failed to make full and frank disclosure when applying ex parte for the recognition order in Cyprus.
In particular, they complained that the respondents had not disclosed allegations relating to the appellants’ assets and to whether the Wycombe Settlement, a trust against which enforcement might later be pursued, was a sham.
The Court rejected this argument. It distinguished an initial application to recognise a foreign judgment from an ex parte application for an interim injunction.
An ex parte freezing order or other interim remedy may have immediate and substantial effects on a defendant before the defendant has an opportunity to be heard. The strict duty of full and frank disclosure exists to protect against the risk that the court may be misled when making an immediately operative order in the absence of the affected party.
By contrast, an initial recognition order under Regulation 44/2001 does not ordinarily permit immediate enforcement.
The order must first be served. The judgment debtor is then given an opportunity to challenge it. Where a challenge is filed, enforcement cannot proceed until that challenge has been determined.
The initial application is therefore principally formal in nature. The applicant must satisfy the documentary and procedural requirements of the Regulation, but is not subject to precisely the same disclosure obligations applicable to an ex parte interim injunction.
The Court also found that the allegations regarding the trust and the appellants’ assets were irrelevant to the formal question of whether the English judgments qualified for recognition.
Recognition and enforcement against assets are distinct stages
This part of the judgment highlights an important distinction in cross-border asset-recovery proceedings.
The recognition stage asks whether the foreign judgment may be treated as enforceable in Cyprus. The subsequent enforcement stage asks how the judgment creditor may recover against particular assets, including:
- bank accounts
- shares in Cyprus companies
- receivables
- immovable property
- assets held by nominees
- trust-related interests, and
- property allegedly transferred to avoid enforcement.
Questions such as whether a trust is genuine, whether assets are beneficially owned by the judgment debtor, or whether a transfer is fraudulent may become central during execution, tracing or separate trust litigation.
They do not ordinarily determine whether the underlying foreign judgment should first be recognised.
Finality and quantification of the English orders
The appellants further contended that the English decisions were not final or enforceable because additional legal costs remained to be assessed.
The Court rejected that argument. The order of 17 October 2019 identified specific sums payable by the appellants, including approximately £8 million plus interest. The fact that other costs might later require assessment did not prevent recognition of the amounts already conclusively ordered.
The Cyprus court also had uncontradicted evidence from English lawyers confirming that the judgments were final, immediately enforceable in England and had not been appealed.
The Court therefore upheld the finding that the judgments concerned sufficiently quantified amounts and were capable of recognition and enforcement in Cyprus.
The litigation funder’s appointment did not transfer the judgment
A further issue concerned an English order appointing Harbour Fund III LP to act in the name and on behalf of the successful parties in negotiations and proceedings connected with the English judgments.
The appellants argued that only Harbour could seek recognition in Cyprus.
The Court disagreed. The appointment authorised Harbour to act as attorney for the judgment creditors. It did not transfer ownership of the judgments or replace the original parties as the persons legally entitled to their benefit.
The relevant English judgments had been entered in favour of the respondents, not Harbour. The respondents therefore remained the proper parties to seek recognition and enforcement in Cyprus.
Practical implications
The decision has several important consequences for parties involved in cross-border litigation.
- For judgment creditors: A Cyprus court will not reconsider the merits of a qualifying foreign judgment. Once the formal requirements are satisfied, the grounds for resisting recognition are limited. However, early planning remains essential. Recognition should be coordinated with asset tracing, preservation measures and an enforcement strategy addressing the nature and location of the debtor’s Cyprus-connected assets.
- For litigation funders and funded parties: Third-party funding is not inherently contrary to Cyprus public policy. Funding arrangements should nevertheless be carefully structured to avoid disproportionate returns, excessive control over legal strategy, interference with settlement decisions or any provision capable of undermining the integrity of the proceedings.
- For defendants resisting enforcement: Public policy is not a general fairness jurisdiction. The defendant must identify a manifest violation of a fundamental principle rather than merely criticise the foreign court’s reasoning. Challenges should focus on the specific statutory grounds available, including service, finality, irreconcilable judgments and any genuine violation of fundamental procedural rights.
- For trustees and beneficiaries: The recognition of a foreign judgment does not, by itself, establish that property held within a trust belongs beneficially to the judgment debtor. Questions concerning sham trusts, beneficial ownership, fraudulent transfers, tracing and enforcement against trust-related assets generally require separate evidence and legal analysis at the enforcement stage.
How AGPLAW can assist
AGPLAW regularly advises international businesses, financial institutions, investors, trustees and private clients on complex cross-border disputes and asset-recovery matters involving Cyprus.
Our Dispute Resolution team can assist with:
- recognition and enforcement of foreign court judgments in Cyprus;
- recognition and enforcement of international arbitral awards;
- freezing injunctions and asset-preservation measures;
- disclosure, tracing and Norwich Pharmacal-type relief;
- enforcement against shares, bank accounts, receivables and immovable property;
- trust, nominee and beneficial-ownership disputes;
- challenges based on jurisdiction, service, natural justice and public policy;
- litigation-funding structures and related enforcement considerations; and
- coordination with English and other international counsel in multi-jurisdictional proceedings.
The Court of Appeal’s judgment demonstrates that effective cross-border recovery requires more than obtaining a successful judgment abroad. Recognition, asset preservation, tracing and execution must form part of a coordinated enforcement strategy from the outset.
Disclaimer: This publication is provided for general information purposes only and does not constitute legal advice. The applicable procedure for recognising and enforcing an English or other foreign judgment in Cyprus depends on the date, jurisdiction, subject matter and procedural history of the particular judgment.
