Legal Service: Committee of Experts rejects Hermes Airports request to postpone construction of Phase 2 at Larnaca and Paphos Airports
Ratification of the decision of the Republic of Cyprus to reject a request of Hermes Airports Ltd. to postpone its contractual obligations in relation to the 2nd Development Phase of Larnaca and Paphos Airports, decided a Committee of Experts based in London, in the framework of the Rapid Dispute Resolution Process initiated by Hermes Airports Ltd. against the Republic of Cyprus, under the Concession Agreement for the Development of Larnaca and Paphos Airports.
The appointed Committee of Experts, after a hearing, decided that Hermes Airports Ltd. had no right to defer its contractual obligations in relation to the 2nd Phase of Airport Development. Hermes Airports Ltd., around July 2017, requested the indefinite postponement of its obligation for the construction of the 2nd Phase of the Airports. The Republic, through the Ministry of Transport, Communications and Works, as the competent Ministry, rejected this request, because it was not in accordance with the provisions of the Concession Agreement. In January 2021, Hermes Airports Ltd. initiated the Rapid Dispute Resolution procedure provided for in the Concession Agreement.
The Committee of Experts, chaired by Rt. Hon. Lord Dyson has denied all allegations made by Hermes Airports Ltd. and its claims, and having regard to the fact that Hermes was the losing party in the case and, recognizing that the Republic had acted reasonably, by order of 13 July 2021, ordered the Commission to pay the costs incurred by the Commission.
The Republic of Cyprus won the arbitration with Hermes Airports for a difference of 140 million euros