Cyprus: Electronic Signatures

 

In a digitalised word e-signature is a key tool with enormous power that works as a type of guarantee in people’s hands. Its guarantee feature causes problems of trust and questions around the matter of going from sign to e-sign. Although signatures are not hundred percent failsafe or valid, their use has been around for centuries. The mark tradition dates back from Romans who were using signatures during the supremacy of Valentinian III in 439 A.D. and later on from the State of Frauds Act enacted by the English Parliament in 1677 making the signature today’s formal acclamation of assent, to 2004 when the banking traditional signature method was replaced to the Chip and PIN system which reduced fraudulent use of credit and debit cards by £65m to £439m in 2005¹ and finally to Obama’s Autopen stylus and Atwood’s LongPen signatures.²

United Kingdom

Since the introduction of the Electronic Communications Act of 2000, the e-signature has legally replaced the ink and feather quill signature. The UK followed the European Union’s eIDAS Regulations³ which after Brexit were amended to repeal the provisions relating to e-ID and they slightly amend the provisions relating to trust services for electronic transactions.⁴ And even though there were forty to fifty Statutes that must have been altered so the handwritten signature could go virtual,⁵ UK Courts have always taken a pragmatic yet very flexible approach to the type of signatures that are admissible as evidence in legal proceedings. It is strongly believed that in today’s environment, where proceedings are conducted via electronic communications UK Courts will be even more flexible with the validity of electronic signatures and signing on the dotted line can be terminated if authenticating intention can be proven.⁶

In the past, English Courts recognised as binding signatures a name typed at the bottom of emails and signatures without even using the signatory’s name such as “Servant to Mr Sperling”.⁷ To make things better, in the well-known case of Yuen v Wong⁸ which brought to the table the requirement for individuals to sign deeds “in the presence of a witness who attests the signature”,⁹ the First-Tier Tribunal left hope for witnesses to be able to witness the signature of deeds via Skype video. Of course, today this gives room for writers to suggest that after the Covid-19 pandemic the UK Government must give clear answers to video witnessing all types of documents as part of the emergency legislation measures¹⁰ and follow Jerseys’ path.¹¹ Video witnessing of wills signing was temporarily allowed in the UK¹² which sounds like a very promising approach towards complete signature digitalisation given that it was already extended to 2024.

Provision 7 of the ECA 2000 states that any document with e-signature is sufficient to establish evidence that the document is genuine and undisputed excluding where the opponent can adduce evidence to the contrary and thus challenge its authenticity.¹³ The evidential weight to be given to the electronic signature has been left to the discretion of the Court.

 

Cyprus

In June 2018 Cyprus implemented Law 55(I)/2018,¹⁴ which incorporated Regulation (EU) 910/2014 on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market (eIDAS).

The eIDAS Regulation clarified electronic signatures by splitting them into three broad types:

1. An “electronic signature” is “data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign”;¹⁵
2. An “advanced electronic signature” is “uniquely linked to the signatory, is capable of identifying the signatory, is created by using electronic signature creation data that the signatory can, with a high level of confidence, use under their sole control and is linked to the data therewith in such a way that any subsequent change in the data is detectable”;¹⁶
3. A “qualified electronic signature”, which is an “advanced electronic signature that is (1) generated by a qualified electronic signature creation device and (2) based on a qualified certificate for electronic signatures.”¹⁷

According to Article 9(1) of Law 55(I)/2018,¹⁸ subject to the provisions of the Evidence Law, electronic signatures are admissible in all civil and criminal proceedings before the Cyprus Courts. By virtue of section 25 an electronic signature cannot be denied legal effect and admissibility as evidence in proceedings, only because it was made in electronic format or does not meet the requirements for qualified electronic signature.¹⁹ The EU attempted to shape long term digital trust and confidence and urge more businesses to embrace the digital atmosphere and carry out dealings electronically²⁰ by giving the long-term winning opportunity to the Courts and judges to examine all the cases on their own facts and decide the validity of e-signatures on a case by case basis.

 

The real question is whether Cyprus Courts will embrace the EU’s view. To this time, no court has been called to consider the validity of an electronic signature and as such there is no clear interpretation as to how e-signatures will be treated by the judges and how the legislation will be interpreted. Recent amendments to Cyprus’ Law bring light at the end of the tunnel. In the Evidence Law (CAP 9) article 2, the definition of “document” was revised to comprise e-documents and any document that includes electronic signatures, electronic seals, electronic time stamps etc.²¹ Even more promising, the Companies Law (CAP 113), article 37A(1) states that every document sent or delivered to the Companies’ Registrar for filing or issued by the Companies’ Registrar can be e-signed.²² With such promising Law amendments already being made we are confident enough that Cyprus courts will be flexible in interpreting the law and adapt to digital signatures which are a concept more than the logo of a business given the pandemic we all went through recently.

JCC Payment Systems Ltd acts as the primary trust service provider in Cyprus²³ and the Cyprus Stock Exchange is the Local Registration Authority which facilitates the issuance of qualified certificates for e-signatures for natural persons, associated with legal person and certificates for electronic seals for legal persons.²⁴

Cyprus will quickly strive for excellence. The Cyprus Courts will confidently follow the EU footprints to build trust and urge companies to embrace the unavoidable virtual business world. To remain attractive, relevant and competitive as a business and investment destination, it is vital for Cyprus to commence and develop its transition to digital renovation. The time has come when Cyprus will foster national digital identities and be able to authenticate reliably, sign in digital form, renovate the infrastructure in which digital transactions are administered and accelerate the development of functional digital solutions.²⁵ Digital transformation will create a more flexible legal and business environment, manage administration costs, sustain long-term potential savings²⁶ and enhance environmentally friendly operations therefore forming a catalyst for change in Cyprus business transactions and the entire market.²⁷

 

For a list of sources, please click here.

 

For further information, please contact:

Doros Lycourgos, Partner

Papadopoulos, Lycourgos & Co LLC, Nicosia

e:  d.lycourgos@paplyclaw.com

t:  +357 22 676 126

 

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