BULGARIA: FINAL COURT DECISION REJECTS JEWISH

UNCLAS SOFIA 000444

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PREL PHUM KCOR KNAR KIRF BU
SUBJECT: BULGARIA: FINAL COURT DECISION REJECTS JEWISH
PROPERTY CLAIM

REF: (A) SOFIA 68; (B) 05 SOFIA 1318


1. (SBU) SUMMARY: In a decision released March 20,
Bulgaria's highest court ended the Jewish community's 15-
year legal struggle for restitution of the Rila Hotel. The
ruling of the Supreme Court of Cassation denied the Jewish
community's request for an extraordinary appeal of the 2005
court decision that rejected the community's claim. The
court held that a 1991 ruling, which granted a 48.87% share
of the hotel to the Jewish organization Shalom, is not
binding either on the state or the current hotel owners, and
further ruled that the Jewish community was not entitled to
ownership because the 1962 expropriation procedure was
properly executed. The decision is final and precludes any
further legal action in Bulgaria. We have again been
assured by President Purvanov's office that the presidency
will work with the government to fulfill Purvanov's
commitment in Washington to attempt to compensate Shalom if
the judicial process was unsuccessful. END SUMMARY.


2. (SBU) On January 17 a five-judge panel of the Supreme
Court of Cassation heard Shalom's request to reverse the
2005 decision of a three-judge panel of the same court (Ref.
A). Shalom claimed that this ruling contradicted a 1991
ruling of the State Arbitration Board, which granted Shalom
48.87% ownership of the Rila Hotel, built on a valuable
piece of land in downtown Sofia that was nationalized in
1962 (Ref. B). NOTE: In 2000, the State Privatization
Agency sold the state's remaining 51% share in the hotel.
This majority stake is currently controlled by Vasil
Bozhkov, a notorious organized crime figure also known as
"The Skull."


3. (U) In its March 8 ruling on the case, the Supreme
Cassation Court dismissed Shalom's claim and held that the
1991 ruling was not binding either on the state or on its
successor Hotel Rila JSC. Besides ruling that the 2005
decision did not contradict the 1991 arbitration decision,
the court found the 2005 decision accurate on its merits.
The court confirmed that Shalom was the legitimate successor
of the Jewish community, which acquired the property in 1906-
1911; however, it maintained that the expropriation
procedure conducted by authorities in the 1960s was properly
executed. The panel referred to a legal provision (since
repealed) that permitted expropriation without prior
compensation due to a compelling need for construction.
Furthermore, according to the court, after the construction
of the hotel, the real estate no longer existed in the form
in which it was nationalized and therefore was not subject
to restitution to the successor of its previous owner.


4. (SBU) COMMENT: With the March Supreme Court decision
all avenues for reclaiming ownership under Bulgarian law
have been exhausted. Shalom is currently unwilling to take
their case to the European Court of Human Rights, fearing
that Bulgarian society's generally positive attitude toward
the country's small Jewish community could be endangered if
they were to sue the government in a foreign court. The
American Jewish Joint Distribution Committee, which has been
representing Shalom, had suggested this as a possibility.
Instead, Shalom hopes to achieve a political solution to the
problem through quiet diplomacy. In recent months, Shalom
president Emil Kalo has initiated informal discussions with
government officials on possible alternatives to
compensation through the courts. Presidential foreign-
policy advisor Zlatin Trapkov told us today that Prime
Minister Stanishev will sign an order creating a commission
to review all remaining restitution disputes, which will
consider the Rila claim. The commission may be able to
offer alternate property or other restitution to claimants.
Bulgarian media have not picked up the story and the case
outcome has received no publicity to date. END COMMENT.


BEYRLE