IN JULY 2012 Cyprus introduced a new limitation law “The Limitations Law (66(1) 2012)”, which imposed time limits on which a party must bring a claim or give notice of a claim to the other party.
In May this year MPs decided that the transition period should be extended by six months and a further announcement has been made extending the transition period by a further 12 months until 31st December 2014.
Limitation periods impose time limits on which a party must bring a claim or give notice of a claim to the other party. Once the limitation period has expired, a party is prohibited from starting a claim against another party.
The 2012 law provides for different limitation periods depending of the nature of the actionable right. For example:
|Breach of contract||Six years|
|Damages for nuisance, negligence or breach of Statutory Duties||Six years|
|Defamation or malicious falsehood||One year|
|Tort Actions||Three years|
|Action for remuneration of self-employed persons (e.g. lawyers, doctors, architects, etc.)||Three years|
|Bills of exchange, Bonds in customary forms, cheques, promissory notes||Six years|
Among those set to benefit from the latest one year extension to the law are those who bought property in Cyprus with loans denominated in a foreign currency (most notably Swiss Francs). As many of these loans were arranged in 2006, time was running out for them to decide whether to bring a claim against the bank for mis-selling. This latest (final?) one-year extension gives them further time to ponder.
(When MPs debated the earlier extension in May, they were unwilling to extend it beyond December 2013. Previous limitation laws had been continually extended and postponed by a succession of laws since the 1974 invasion and MPs considered that a further extension beyond the end of 2013 would make the new law pointless).
To avoid possible confusion, the law does not seek to prevent claims being made in actions which had not been started before the law was passed.
Furthermore, the time period runs from the date the cause of action arose, which is not necessarily the date the contract was entered in many cases.