The Nicosia District Court, in an interlocutory judgment dated 16 January 2025 examined the procedurally intriguing issue of whether a claimant may file a counterclaim in response to an already-filed counterclaim.
The case arose in the context of a commercial dispute relating to the sale of building materials and a construction contract. The claimant filed an application seeking leave to file further pleadings—specifically, a counterclaim to the defendant’s counterclaim—on the basis that the claims arose from the same contract and transaction.
Procedural Context and Legal Basis: The application was grounded on the Former Civil Procedure Rules, particularly Orders 21 Rule 10 and Rule 14(2), Orders 57 and 64, and the inherent jurisdiction of the Court. The applicant relied on authorities from English law, particularly the Annual Practice (1958) and the cases:
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Toke v. Andrews, (1881) 8 Q.B.D. 428
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Renton Gibbs & Co. Ltd v. Neville & Co., [1900] 2 Q.B. 181
These decisions suggest that a plaintiff may counterclaim against a counterclaim provided the cross-claim arose out of the same transaction and is used merely as a defence.
Court’s Findings: The Court held that:
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No express procedural basis exists within the Cyprus Civil Procedure Rules for a standalone pleading termed “counterclaim to a counterclaim.”
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Even under English jurisprudence, such a cross-claim must be included in the reply and not in a separate pleading. The “natural place for it is in the reply in which it is now found” (Renton Gibbs).
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Timeliness and procedural diligence are critical. The Court noted the claimant had several earlier opportunities to plead their position (e.g., in the Defence to Counterclaim filed in 2019) and had even declared an intent to pursue their claim separately.
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The Court emphasized the need for strict procedural compliance, referring to the Cypriot case Kollatou v. Panayiotou (2003) 1 A.A.D. 895, which reaffirmed that adherence to procedural rules is essential to ensuring fair trial standards.
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It was also noted that the issue of delay had previously been highlighted by the Court of Appeal in Civil Appeal E169/20, which criticised the lack of prompt action in prosecuting the application.
Conclusion: The Court rejected the application to file a counterclaim to a counterclaim, holding that such procedural innovation is not supported by Cyprus legal framework and is not justified solely due to the expiration of limitation periods.
This judgment clarifies the limitations of procedural mechanisms available in civil litigation and underscores the importance of timely and procedurally sound pleadings.
Alexandros Papantoniou and Alexia Mavrikiou of our Dispute Resolution Practice, successfully represented the Defendant in the proceedings.