The District Court of Nicosia recently issued an interim judgment in a corporate dispute concerning alleged changes to the shareholding, officers and registered office of a Cyprus holding company, which the applicants alleged was connected to overseas high-value assets.
Our law firm acted for one of the defendants in the proceedings and successfully opposed the continuation of the ex parte interim orders, which were ultimately discharged by the Court.
The Court's Reasoning
The judgment focuses on the duty of full and frank disclosure in applications made without notice to the other side.
The Court held that the applicants had not placed before it all material facts at the ex parte stage. In particular, the Court found that the applicants had failed to disclose that, shortly before the application was filed, shares held by the Cyprus company in its overseas subsidiary had been transferred to another company. This was material because the protection of that subsidiary and its assets had been relied upon as a central reason for urgency.
The Court also found that the applicants had not presented a complete picture of the subsidiary's financial position. Although reference was made to the value of its assets, the Court noted that its liabilities were not sufficiently disclosed, despite being relevant to the overall assessment of value.
In addition, the Court considered that the defendants' earlier correspondence and positions on the disputed corporate structure should have been fairly brought to the Court's attention.
Result
The orders were discharged, the application was dismissed, and costs were awarded in favour of the defendants.
Key Takeaway
The judgment is a clear reminder that parties seeking ex parte injunctions in Cyprus must give the Court a balanced and complete account of the facts. This includes matters that may weaken their own case or support the defendants' position.
A failure to do so may lead to the discharge of interim relief, irrespective of the substantive merits of the dispute.
This judgment reflects our firm's experience in complex corporate disputes, interim injunction proceedings, and cases involving allegations of corporate control, asset protection and cross-border structures.
