Pursuant to what is applicable in the Republic of Cyprus today, should there any dispute arise between Contracting Authority and Contractor related with the contract or as a result thereof or if any dispute arises from decision, opinion or instruction of the Project Manager (or the Engineer in case of public works), then the Contracting Authority or the Contractor accordingly notify the other party with copy of the notice to the Project Manager (or the Engineer). From the moment of that notice, both parties must make every possible effort in order to settle their dispute amicably within the next 56 days (unless otherwise specified in the contract).
Any dispute for which no amicable settlement has been achieved within 56 days (unless otherwise specified in the contract) from the date of service of the above notice, is resolved conclusively by choosing litigation or arbitration.
In cases where the arbitration is chosen as a method to resolve disputes, pursuant to the provisions of the Arbitration Law (ch. 4), the disputes are settled by two arbitrators, one appointed by each party, and a umpire appointed by the two arbitrators. It is pointed out that the two parties are entitled to agree jointly that the reference to arbitration is conducted by only one arbitrator.
The procedure is conducted before the arbitrators and the umpire acting jointly, at a place and time usually defined by them. During the arbitration process the parties have the same rights and obligations. The principle of equality is observed and the parties are invited to attend the discussions, develop their allegations and produce their evidence. The umpire guides the discussion.
It is pointed out that during the procedure before the arbitrators and the umpire the two parties are not required to limit themselves only to the use of the allegations and arguments that they would be likely to use before the Project Manager. In addition, they may call on witnesses and experts, which may be examined under oath or by confirmation.
The arbitration decision must be drafted in writing and hand signed by the arbitrators and it must state a) the first and last name of the umpire and of the arbitrators, b) the place and time of its issue, c) the first and last names of those who attended the arbitration process, d) the agreement for arbitration on which it was based, e) justification/ rationale and g) the pronouncement. The arbitration decision cannot be contested by judicial means. It is binding and final for the litigants.
The arbitration decision may be annulled in whole or in part by judicial ruling22 [ By the County Court or any judge thereof who has jurisdiction over the issue. ] only for the following reasons 1) if the arbitrator or umpire has demonstrated poor behaviour or mishandled the case, 2) when the arbitration was conducted illegally, 3) when the arbitration decision was issued illegally. The court has also the power by the force of the article 9 of the Arbitration Law to provide remedy when the arbitrator is not impartial or when the dispute being referred raises an issue of malice.
In addition, the arbitrator or umpire may, and are required if the Court so order, refer to the Court by memorandum a) any legal issue that arises in the course of arbitration or b) the arbitration decision or any part thereof, in the form of special case for the court to rule on.
The expenses of the arbitration and arbitration decision are left to the discretion of the arbitrators and the empire, which may order to whom, by whom and in what way they will be paid.
In cases where the Contracting Authorities (if the amicable settlement fails) choose litigation as a dispute resolution method, then those competent to rule on the appeal are the County Courts and as long as one of the litigants is not satisfied by the court ruling, he may refer to the Appellate Court.