CYPRUS PROPERTY: ORAMS RULING A SETBACK FOR GREEK

C O N F I D E N T I A L SECTION 01 OF 03 NICOSIA 001505

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/06/2016
TAGS: PGOV PREL PHUM ECON EUN TU CY
SUBJECT: CYPRUS PROPERTY: ORAMS RULING A SETBACK FOR GREEK
CYPRIOTS

REF: A. LIBBY-SILLIMAN EMAIL (09/06/2006)

B. NICOSIA 959 AND PREVIOUS

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Classified By: Ambassador Ronald L. Schlicher, reasons 1.4 (b) and (d).


1. (C) SUMMARY. Greek Cypriot plaintiffs owning land in
north Cyprus have suffered a high-profile legal setback in
the landmark "Orams" property case. On September 6, a UK
judge ruled that an ROC court's cease-and-desist judgment
against a British couple (who had built a home on Greek
Cypriot land acquired under laws of the "TRNC") was not
enforceable in the UK because of the suspension of the EU
acquis in the north. The plaintiffs had claimed that EU
regulations required the UK to honor the Cypriot judgment,
and had asked the court to seize the couple's UK property as
compensation. The plaintiffs can appeal to higher UK and/or
EU courts, so it is unclear whether this tactical victory for
the Orams (and their lawyer Cherie Booth Blair) will evolve
into a strategic victory for the Turkish Cypriots -- who hope
that the ruling will alleviate the dampening effect Greek
Cypriot property lawsuits have had on foreign investment in
their all-important tourism and real estate sectors. The
previously successful Greek Cypriot strategy of using the
courts to seek remedy for losses arising from the 1974
Turkish invasion has backfired at least temporarily --
leading politicians in the south to make uncharacteristically
sheepish statements about the urgent need for a political
solution on Cyprus. Although the Orams ruling is unlikely to
undermine public faith in the Papadopoulos administration in
the short term, it nonetheless highlights the costs of the
ROC's coy approach to settlement talks. Property remains the
Greek Cypriots' one significant pressure point, which the
Turkish Cypriots will continue to exploit -- both by
encouraging more development in the north and by seeking
compensation from an embarrassed GOC for Turkish Cypriot land
in the south. END SUMMARY.

ORAMS-1, APOSTOLIDES-0
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2. (SBU) On September 6, a UK court ruled against Greek
Cypriot plaintiff Meletios Apostolides in the high-profile
"Orams" property case (ref a). In 2004, Apostolides had
brought suit in an ROC court against the British couple,
David and Linda Orams, who had built a house on land
belonging to him in Lapithos (Lapta). Although the Orams had
purchased the land under the laws of the "TRNC," Apostolides
retained the legally recognized, pre-1974 ROC title to the
property.


3. (C) In 2005, the Cypriot court issued a default judgment
ordering the Orams to vacate the property, demolish the house
they had built, and pay compensation. When the Orams refused
to comply with the judgment, which was practically
unenforceable in the "TRNC," Apostolides brought suit in the
UK, claiming the EU regulations required the British court to
enforce the ROC ruling -- and asking that he be awarded the
Orams' property in Sussex as compensation. The Orams, with
moral and financial support from the "TRNC" government and
business community, caused a major political stir when they
retained the services of PM Blair's wife, attorney Cherie
Booth Blair -- a development which infuriated many Greek
Cypriots, who assumed HMG was deliberately poking them in the
eye.


4. (SBU) The UK court, however, found that the ROC's judgment
could not be enforced in the UK. In a 32-page ruling (much
of which dealt with procedural questions of how the summons
against the Orams was served),the British judge noted that
Article 10 of Cyprus's accession treaty stipulated that the
EU acquis would be suspended in the north pending
reunification of the island. He noted in his ruling that
this suspension -- which originally intended to ensure the
ROC would not be held liable for its failure to implement EU
laws in territory outside its effective control (i.e., the
"TRNC") -- could not be selectively ignored for the purpose
of punishing individuals for using property that did not
belong to them. Although the judge acknowledged that
Apostolides was the rightful owner of the property, he noted
previous rulings, including those from the ECHR, which had
held Turkey responsible for the property situation in the
north. His decision indirectly suggested that Apostolides
should more appropriately seek redress from the GOT (and
perhaps even the "TRNC's" new Property Commission).


5. (SBU) The UK judge ordered Apostolides to pay 75 percent
of the Orams' legal fees (some $1.4 million),but conceded
his ruling was subject to appeal -- presumably to a higher UK
court and/or the European Court of Justice in Luxembourg.

GREEK CYPRIOTS POUR ON THE SPIN

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6. (C) The outcome of the Orams case (in which Greek Cypriot
commentators were confidently predicting victory earlier this
week) has been met with shock and disappointment in the
south. Achilleas Demetriades, the super-star property lawyer
who argued the Arestis and Loizidou cases (ref b),
accentuated the positive elements of the ruling, stressing
the court's recognition that Apostolides was indeed the owner
of the land (this was never in doubt and not contested by the
other side). AG Petros Clerides noted that the decision
reinforced the policy of non-recognition of the
"pseudo-state." He disputed the court's interpretation of
Article 10 and the suspension of the acquis, and suggested
that the ECJ would have to be the final arbiter in the case.


7. (C) Andros Kyprianou, spokesman of President
Papadopoulos's coalition partner AKEL, sheepishly said that
the ruling was proof that the Cyprus problem could only be
solved through a political process, and not through legal
procedures. The irony of this remark (which echoed a
statement made on the same day by Turkish Cypriot leader
Talat) was not lost on many observers -- who remember AKEL's
counterproductive waffling during Annan Plan negotiations in
2004, and point to the party's strong endorsement of the
heretofore successful strategy of suing Turkey and the
Turkish Cypriots for property restitution and compensation.

TURKISH CYPRIOTS SKIP WITH GLEE
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8. (SBU) While "President" Talat and "Prime Minister" Soyer
issued (comparatively) measured statements welcoming the
decision, the Turkish Cypriot press and the Orams' local
barrister trumpeted the outcome as a victory. Several
commentators expressed hope that the ruling would help blunt
the threat of future lawsuits, which has reportedly had a
dampening effect on the north's economy and spooked
foreigners who were considering investing in the important
real estate and tourism sectors.


9. (C) In a private meeting with us, Turkish Cypriot lawyer
Emine Erk (the legal eagle in Talat's kitchen cabinet and an
advisor to the Orams legal team) expressed hope that the
ruling would wrong-foot the Papadopoulos administration and
perhaps even undermine political support for his hard-line
negotiating stance on the Cyprus problem. She noted that
property was the one element of the Cyprus dispute that had a
direct and personal impact on a large constituency of Greek
Cypriot voters. Papadopoulos, she said, had to manage the
property question carefully lest he be blamed for policies
that lead to the permanent loss of Greek Cypriot property in
the north.


10. (C) As a result, Erk claimed, the Presidential Palace was
funding and directing the Apostolides legal team (Talat's
office had also provided financial support to the Orams, she
admitted). In Erk's opinion, the Greek Cypriots now faced an
unpalatable choice between letting the ruling stand and
taking the risk that the ECJ would issue an unappealable
verdict in the Orams favor. She was "not sure what
Papadopoulos would do," but expressed confidence that Orams
-- and the Turkish Cypriot side -- stood a good chance of
winning any appeal.


11. (C) Meanwhile, she noted, Turkish Cypriot claims against
the ROC would continue apace, including an ECHR case she had
just helped file the week before involving a Turkish Cypriot
whose land in the south had been seized, without
compensation, for use as a military base. Cases such as
this, she said would throw into sharp relief the
contradiction between Greek Cypriot demands that the Turkish
side live up to European norms, and the ROC's failure to do
so at home.

COMMENT
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12. (C) Erk is probably overestimating Papadopoulos's
vulnerability, but there nonetheless could be a political
cost to pay if his administration's policy of vigorously
pursuing every legal option to the fullest and playing coy in
settlement talks continues to backfire. An ECHR ruling on
the "TRNC's" new property restitution scheme could come
within the next year, and a ruling in favor of the Turkish
side would be an even bigger setback for the Greek Cypriots.
Cognizant of the fact that property is their community's
biggest trump card in an otherwise weak hand, the "TRNC
government" is likely to continue promoting further
development of Greek Cypriot land -- and supporting Turkish
Cypriot parties in property law suits north and south. END

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COMMENT.












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