How to Get Security for Costs in Cyprus (order 60 CPR): Grounds, Procedure & Bank Guarantees

If you are a defendant in Cyprus civil proceedings facing a claim from an impecunious or foreign claimant, knowing how to get security for costs can be the difference between recovering your legal expenses and writing them off entirely. Order 60 of the Civil Procedure Rules (CPR) gives Cypriot courts a broad discretionary power to require a claimant to provide security, whether through payment into court, a bank guarantee or an equivalent instrument, before a case proceeds to trial. This guide sets out the legal grounds, the step-by-step application process under the 2026 CPR framework, the evidence the court expects, and the practical mechanics of bank guarantees and other acceptable forms of security for costs in Cyprus.

It is written for in-house counsel, litigation partners and local counsel who need an actionable roadmap they can follow immediately.

Legal Basis: Order 60 CPR (Cyprus) Explained

Text summary of Order 60

Order 60 of the Civil Procedure Rules empowers the court to order a claimant (or, in some cases, a counterclaimant) to give security for the defendant’s costs of the action. The court may make such an order at any stage of the proceedings, and the security may take whatever form the court considers appropriate, most commonly payment of a specified sum into court or provision of a bank guarantee. The rule is framed as a discretionary power, meaning no applicant has an automatic right to an order; the court must be satisfied that specific grounds exist and that the order is just in all the circumstances.

Under the civil procedure rules Cyprus Order 60 framework, the court may also attach conditions to the order, including a direction that proceedings be stayed until the security is provided. This stay mechanism is the principal enforcement lever: if the claimant fails to comply within the timeframe set by the court, the defendant may apply to have the claim struck out. The rule operates in parallel with the court’s general case-management powers, which, following the 2026 CPR reforms, emphasise proportionality and the efficient disposal of interlocutory matters.

Key principles from Cyprus case law

The Supreme Court of Cyprus has developed a well-established balancing test for security for costs applications. The court weighs the defendant’s legitimate interest in protecting a potential costs award against the claimant’s right of access to the courts. Several guiding principles have emerged from reported decisions:

• Foreign claimant presumption. Where a claimant is ordinarily resident outside Cyprus, there is a recognised starting presumption that security may be appropriate, because enforcement of any costs order abroad may be difficult or uncertain.
• No automatic bar. Impecuniosity alone does not entitle a defendant to security; the court must assess whether ordering security would effectively stifle the claim and deny the claimant access to justice.
• Merits assessment, light touch. The court will form a preliminary view of the merits of the claim, but it does not conduct a mini-trial. A plainly strong claim makes a security order less likely; a plainly weak one makes it more so.
• Conduct and delay. An applicant who delays unreasonably in seeking security, for example, waiting until close to trial, may find that the court exercises its discretion against making the order.

These principles are drawn from the Supreme Court’s published guidance and from leading appellate decisions accessible through the Cyprus Legal Information Institute (CYLII). Practitioners should note that the England and Wales CPR Part 25 security-for-costs regime, while similar in concept, differs from Order 60 Cyprus in its enumerated grounds and threshold conditions; the two should not be conflated.

When Courts Will Grant Security for Costs: Grounds and Judicial Test

Typical grounds for an application for security for costs Cyprus

The most commonly relied-upon grounds for a security for costs order Cyprus are set out below. In practice, applications succeed most often when more than one ground applies concurrently.

Factors the court weighs: against individuals versus companies

Can you get security for costs against an individual in Cyprus? Yes, but it is more difficult than against a company. The court is especially reluctant to order security where the effect would be to prevent a natural person from pursuing a genuine claim. The relevant factors include the strength of the claim on its face, whether the individual has any identifiable assets in Cyprus, and whether there are reciprocal enforcement arrangements with the individual’s home jurisdiction. Against a company, the court is generally less concerned about stifling effect, particularly where the company has no assets, has been recently incorporated, or appears to be a litigation vehicle.

Step-by-Step: How to Get Security for Costs Under Order 60

The application process under Order 60 Cyprus follows a defined interlocutory pathway. Below is a practical step-by-step guide.

Timing and interlocutory procedure

1. Identify the grounds early. Review the claim form, the claimant’s address and corporate status as soon as you are served. Delay undermines applications.
2. File a summons (interlocutory application). The application is made by summons supported by an affidavit. File in the District Court where the action is pending (or the Commercial Court, if applicable). Court filing fees are modest and are published by the Cyprus courts.
3. Serve the application and affidavit. Serve the claimant in accordance with the CPR service rules. Allow sufficient time for the claimant to file a responding affidavit, typically at least seven working days, unless the court directs otherwise.
4. Attend the hearing. The hearing is interlocutory and will normally be listed within seven to twenty-one working days of filing, depending on the court’s diary and any urgency the applicant demonstrates.

Draft structure: skeleton argument, affidavit and exhibits

The application for security for costs Cyprus should comprise:

• Summons. Identify the relief sought (an order for security in a specified amount; a direction for payment into court or provision of a bank guarantee; a stay of proceedings until security is provided; costs of the application).
• Affidavit in support. Set out the factual basis for each ground relied upon. Exhibit the supporting documents (see the evidence checklist below). Include a costs estimate, typically a schedule showing the defendant’s estimated costs to trial, broken down by stage.
• Skeleton argument. Summarise the legal basis (Order 60 and relevant case law), identify each ground, and address the balancing test. Keep this document concise, courts favour brevity in interlocutory matters.
• Draft order. Provide the court with a draft of the order you seek, including the amount of security, the form (bank guarantee or payment into court), the deadline for compliance, and the consequences of non-compliance (stay and potential strike-out).

Hearing strategy and orders sought

At the hearing, focus on three things the judge will want to address: (1) whether the ground is made out on the evidence, (2) whether the amount of security is reasonable and proportionate, and (3) what form the security should take. Industry observers expect that, under the 2026 CPR reforms, courts will be increasingly willing to set tight deadlines for compliance and to enforce them rigorously in the interests of case management.

The orders most commonly sought are:

• Payment into court of a specified sum;
• Provision of an irrevocable, on-demand bank guarantee from a Cyprus-licensed bank;
• Stay of proceedings until the security is provided;
• Liberty to apply to strike out the claim if the claimant fails to comply.

Evidence Checklist and Drafting Tips for Security for Costs in Cyprus

Financial evidence

The court will expect concrete evidence supporting the assertion that the claimant cannot or may not satisfy a costs order. Key exhibits include:

• Company accounts. The most recent audited or management accounts of the claimant company, showing net assets, turnover and cash position.
• Registrar of Companies search. A current search showing the claimant company’s registered details, filed returns and any charges registered against its assets.
• Insolvency search. Confirmation from the Official Receiver’s office as to whether any winding-up petition or liquidation order has been filed against the claimant.
• Bank statements. If available through disclosure, the claimant’s bank statements for the preceding twelve months.

Evidence of domicile or non-residence

For a foreign claimant security for costs Cyprus application, exhibit:

• Certificate of incorporation (showing foreign jurisdiction of the company);
• Passport or residency documentation (for an individual claimant);
• Expert evidence on enforceability, a brief opinion from a lawyer in the claimant’s home jurisdiction confirming whether a Cyprus costs order would be enforceable there, and the likely cost and time involved.

Evidence of risk of non-enforcement

Where the concern is that a costs order would be unenforceable rather than that the claimant lacks assets, exhibit evidence of the absence of reciprocal enforcement arrangements or practical difficulties. This is particularly relevant for claimants domiciled in jurisdictions outside the EU (where EU Regulation 1215/2012 on recognition and enforcement of judgments does not apply).

Acceptable Forms of Security and Drafting Bank Guarantee Provisions

Payment into court

The simplest form of security is payment of a specified sum directly into the court registry. The amount is held until final determination of costs. This option is straightforward but ties up the claimant’s cash, making it less attractive from the claimant’s perspective and sometimes disproportionate for large sums.

Bank guarantee security for costs

A bank guarantee is the most common alternative. For a bank guarantee to be acceptable to the court, it should be:

• Irrevocable, not capable of cancellation by the issuing bank or the claimant without the defendant’s consent;
• Unconditional and on first demand, payable upon the defendant’s written demand, without the bank needing to verify the underlying costs order;
• Issued by a licensed bank, typically a bank licensed and regulated in Cyprus by the Central Bank of Cyprus;
• In the correct currency, usually euros, matching the currency of the likely costs order;
• Valid for a sufficient period, covering the likely duration of proceedings through to final assessment of costs, plus a reasonable margin.

Sample wording for an on-demand bank guarantee clause (check with bank counsel before use):

“We, [Bank Name], hereby irrevocably and unconditionally undertake to pay to [Defendant Name] on first written demand any sum or sums up to an aggregate amount of EUR [Amount], upon receipt of [Defendant’s] written statement that a costs order has been made in [Defendant’s] favour in Action No. [Case Number] in the District Court of [District], Cyprus, and that the amount demanded is due and payable under that order. This guarantee shall remain in force until [Date] or until released in writing by [Defendant], whichever is earlier.”

Insurance and litigation funding as substitutes

In some cases, claimants offer after-the-event (ATE) insurance or a letter of undertaking from a litigation funder as an alternative to a bank guarantee. The likely practical effect will be that courts will scrutinise such arrangements closely to ensure they are genuinely enforceable. Early indications suggest that courts prefer bank guarantees or payment into court as more reliable instruments, but they retain discretion to accept alternative forms where the defendant’s position is adequately protected.

Consequences: Stay of Proceedings, Enforcement and Costs

If security is ordered: stay of proceedings Cyprus

Where the court orders security for costs, it will typically direct a stay of proceedings until the claimant complies. If the claimant fails to provide the required security within the deadline, usually seven to twenty-one working days, the defendant may apply for the claim to be struck out. The stay operates as a powerful incentive for compliance.

Enforcement of costs orders if defendant wins

If the defendant ultimately succeeds at trial and is awarded costs, the security (whether held as cash in court or as a bank guarantee) is available to satisfy the costs order. The defendant applies to the court for release of the funds or for the bank guarantee to be called. For a detailed guide on the enforcement process, see How to enforce a judgment in Cyprus.

Partial securities and variation

Courts sometimes order security in stages, for example, security for costs up to the close of pleadings, with liberty to apply for further security before trial. This staged approach is consistent with the proportionality principle emphasised by the 2026 CPR reforms. Either party may apply to vary the amount or form of security if circumstances change materially.

Special Situations: Foreign Claimants, Insolvency and Companies

Foreign claimant: presumption versus rebuttal

The starting presumption in favour of ordering security against a foreign claimant is rebuttable. The claimant may resist by showing, for example, that it holds substantial assets within Cyprus, that a reciprocal enforcement regime (such as EU Regulation 1215/2012) applies to its home jurisdiction, or that the claim is of sufficient strength that denying access to the courts would be unjust. Cross-border practitioners should refer to the CCBE practical guide for additional context on service and establishment requirements.

Nominal companies and transparent assets

Where a claimant company is a shell entity with no genuine assets, the court may order security even if the company is incorporated in Cyprus. The key question is whether there is a real risk that a costs order will be unenforceable. Corporate structure charts and beneficial ownership extracts from the UBO register are essential evidence in these cases.

Insolvency and administrators

Where a claimant is in liquidation or administration, the court will typically require security unless the claim is being pursued for the benefit of the general body of creditors and the administrator can demonstrate that the estate has sufficient funds to meet an adverse costs order.

Challenging a Security for Costs Order: Appeals and Variations

Grounds to resist or vary

A claimant who wishes to resist a security for costs order, or to vary one already made, may argue:

• Special circumstances, for example, that the defendant’s own conduct caused the claimant’s impecuniosity;
• Strength of the claim, that the claim is so strong on its face that ordering security would be unjust;
• Proportionality, that the amount of security sought is excessive relative to the likely costs;
• Change in circumstances, that the claimant’s financial position has improved since the order was made.

Appellate routes and urgent relief

An appeal against an interlocutory order for security lies to the Supreme Court (or, under the 2026 reforms, to the Court of Appeal where applicable). The appellant must obtain leave to appeal and demonstrate that the first-instance judge erred in the exercise of discretion, a high threshold. In urgent cases, the claimant may seek a stay of the interlocutory order pending appeal.

Practical Timeline and Sample Court Orders

The table below sets out a typical timeline for an application for security for costs Cyprus, from filing to compliance.

Conclusion and Next Steps

Obtaining security for costs in Cyprus under Order 60 CPR is a powerful tactical tool for defendants, but it demands careful preparation, timely action and well-evidenced applications. The 2026 CPR reforms reinforce the court’s case-management approach, making it more important than ever to file early, present clear financial evidence, and propose a realistic form and amount of security. To explore how to get security for costs in your specific dispute, or to commission a bank guarantee template and application drafting, find a specialist Cyprus litigation lawyer through our directory. For broader context on litigation in Cyprus, consult our practice-area guides.

Sources

1. CYLII, Civil Procedure Rules: Order 60: Security for Costs
2. Supreme Court of Cyprus, CPR Guiding Drafts
3. Cyprus Bar Association, Court Fees and Lawyer Charges
4. Ministry of Justice and Public Order, Legislation Portal
5. CCBE, Practical Guide for Cross-Border Practitioners (Cyprus)