Cyprus

Agency Law in Cyprus

Implementing legislation

The Regulation of Relations between Commercial Agent and Principal Laws of 1992 and 2000 (Law 51(I)/ 1992 as amended by Law 149(I)/2000). The legislation came into force upon its publication in the Official Gazette of the Republic on 3 July 1992.

Proper notice

• 1 month if less than or equal to 1 year;
• 2 months if more than 1 year and less than or equal to 2 years;
• 3 months if more than 2 years and less than or equal to 3 years;
• 4 months if more than 3 years and less than or equal to 4 years;
• 5 months if more than 4 years and less than or equal to 5 years;
• 6 months if more than 5 years.

Indemnity or compensation or both

Either indemnity or compensation can be claimed on termination.

Calculation of indemnity/compensation

• Indemnity – Capped at a maximum of the average annual commission over last 5 years or, if less than 5 years, over the agency.
• Compensation – The legislation does not set out how compensation is to be calculated.

Pre-termination commission

Yes.

Post-termination commission

Yes.

Back commission

Yes.

Restrictive Covenants

Implementing Legislation

The Regulation of Relations between Commercial Agent and Principal Laws of 1992 and 2000 (Law 51(I)/1992 as amended by Law 149(I)/2000) (“the Law”).

1) Under Cyprian law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?

The Law makes no reference to the issue of restraint of trade during the performance of the agency contract.

2) Under Cyprian law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?

Yes. A clause restricting the business activities of a commercial agent following termination of the agency contract is referred to as a “restraint of trade clause”.

A restraint of trade clause is valid only if and to the extent that:

1. it has been concluded in writing; and
2. it relates to the geographical area or to the group of persons and the geographical area for which the commercial agent is responsible and to the kind of goods covered by his agency under the agency agreement.

A restraint of trade clause is valid for not more than two years after the termination of the agency contract.

agentlaw.co.uk wishes to thank Montanios & Montanios, Advocates and Legal Consultants of Nicosia, for its contribution to this page.