Recent case law on search orders (Anton Piller orders) in aid of winding up petitions of Cyprus companies
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In a recent judgment of the Cyprus Supreme Court in Centaur Trust Group Ltd and xxx Papaprodromou, Civil Application No. 109/2021, the Court affirmed the jurisdiction of the Cyprus Courts to issue search orders (Anton Piller orders) in aid of winding up petitions of Cyprus companies based on oppression on the minority or on just and equitable grounds.
The facts
A search order (Anton Piller order) was issued in the course of a winding up petition asserting oppression on the minority and/or just and equitable grounds for winding up of a Cyprus company. The relevant petition was based on allegations of unjust and unlawful conduct by the majority shareholder of a Cyprus company, which allegedly rendered the operations of the company to be tantamount to oppression to the minority, depletion of the financial assets of the company, unlawful embezzlement of funds and, in general, an administration demonstrating lack of probity and fair dealing which undermined the trust of the shareholders amongst themselves.
What was decided
The Supreme Court decided that the issuance without notice of a search order (Anton Piller order) in aid of the winding up petition did not violate any rule of natural justice and there was no requirement of the Court requesting the position of the respondent before issuing the order. In this respect, the Supreme Court reiterated previous case law noting that search orders are characterised by the element of surprise and not the element of urgency and, therefore, urgency is not a necessary requirement for the exercise of the relevant jurisdiction in proper cases.
Further, the Supreme Court held that the fact that, at a prior stage of the proceedings, the applicants had obtained a freezing injunction in aid of the winding up petition, which was pending for hearing, did not per se constitute a bar to an application for a search order (Anton Piller) order.
Lastly, the Supreme Court observed that there was sufficient evidence before the District Court for the jurisdiction to be triggered, such as allegations of strong probability of destruction of evidence, and it was up to the District Court to decide finally on the issue, if and provided that the respondents file an application to set aside the order and explain the reasons that they believe that this is justifiable.
Conclusion
The case reiterates the readiness of Cyprus Courts in appropriate circumstances to issue robust injunctions in aid of existing proceedings, including search orders where there are allegations putting forward a strong probability of destruction of evidence.
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