Identifier | Created | Classification | Origin |
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10NICOSIA45 | 2010-01-26 06:39:00 | CONFIDENTIAL | Embassy Nicosia |
VZCZCXRO7691 OO RUEHAG RUEHROV RUEHSL RUEHSR DE RUEHNC #0045/01 0260639 ZNY CCCCC ZZH O 260639Z JAN 10 FM AMEMBASSY NICOSIA TO RUEHC/SECSTATE WASHDC IMMEDIATE 0449 INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY RUEHAK/AMEMBASSY ANKARA PRIORITY 5576 RUEATRS/DEPT OF TREASURY WASHDC PRIORITY |
C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000045 |
1. (SBU) On January 20, in a major precedent-setting case, the UK Court of Appeals affirmed the decisions of a Republic of Cyprus court and a lower UK court that found a British couple (the "Orams") guilty of trespassing for having built a holiday home in north Cyprus on land owned by a Greek Cypriot. The Orams must now vacate the property, "deliver the property to its rightful owner," pay back rent for the use of the property (about British Pounds 40,000) and legal expenses of the plaintiff (about British Pounds 1.5 million) as well as demolish the house they built. The most significant aspect of the decision is that the Orams' assets in the UK may be seized to satisfy the execution of the court decision. 2. (C) With somewhere between 10,000-15,000 properties in north Cyprus belonging to EU citizens, the vast majority of which are on land that was owned by Greek Cypriots prior to the Turkish actions of 1974, the effect of the UK Court of Appeals in the "Orams" case (reftel) has been a plummeting of the sale values of Greek Cypriot-owned land in north Cyprus. Real estate brokers in the north tell us that they are receiving calls from panicking EU residents seeking to sell their properties. There are some buyers who are prepared to step in, primarily Turkish Cypriots and Turks who have no assets in the EU. Business sector contacts say that the property market will take years to recover (although Turkish Cypriot titled land values will rise) and the already-moribund construction sector will see more bankruptcies as a result of this ruling. The Turkish Cypriot business sector, already experiencing negative growth, will continue to suffer. 3. (C) The decision was hailed by the Greek Cypriot media and political leaders as an important step to reassert the continuing primacy of the rights of Greek Cypriot property holders and an end to the "exploitation" of their land in the Turkish Cypriot part of the island. President Christofias promised the decision would be "properly utilized." The theme of EU citizens (especially Britons) "taking advantage" of the low property prices in the north has been a sore point for years among Greek Cypriots who believe it was foreigners taking advantage of Greek Cypriot misfortune. Lawyers in the RoC have been preparing for months to new file lawsuits similar to the Orams once the court decision was finalized. Among their targets are major hotels, Turkish Cypriots resident in London with holiday homes in north Cyprus ("they are even worse than non-Cypriots because they have exploited the suffering of their compatriots" said one GC lawyer), and the Turkish military whose bases sit on large pieces of prime property. 4. (C) The plaintiff's lawyer has announced that he intends to file suit for trespassing against 60 tourists, EU citizens, who were guests at the Dome Hotel in Kyrenia. While the amount the tourists would have to pay in the event they are found guilty would be small (Euros 100-200) the goal is to attack the Turkish Cypriot economy. The attorney told a press conference that this lawsuit has no political motives and that the Greek Cypriot owner of the hotel is open to a business proposition from the hotel's current TC operator to prevent the case from proceeding. However, our Turkish Cypriot contacts assure us that the TC leaders, and Turkey, would never allow "this sort of blackmail." 5. (C) A key distinction of the Orams case is that it was not a class action suit or a case against Turkey as previous property-related court cases have been. These gave rise to the establishment of the "Property Commission" in the north to provide a Turkish Cypriot recourse to Greek Cypriot property claims (as a means to avoid cases going to the European Court of Human Rights by providing a local remedy.) With the Orams case as precedent, Greek Cypriot plaintiffs can now sue in their own courts and have the subsequent decisions for damages executed anywhere in the EU. Turkish Cypriots bitterly note that they can not expect justice in Greek Cypriot courts and point to the difficulty in getting their cases heard in these courts for restitution of their property in the RoC (the cases typically are settled out of court after years of delays.) A GC lawyer told us that a TC client is suing the GoC for Euros 40 million for land "illegally seized without compensation" and that his client will not settle. Theoretically, all TC-owned land in the south that is being utilized should have rents paid into a trust account. According to a recent auditor general report, however, there are zero funds in this account. 6. (C) Comment: The effect of the Orams ruling on the NICOSIA 00000045 002 OF 002 reunification talks remains to be seen but is viewed by TCs as very negative. Talat's already hard path to re-election in April has been made even more difficult as TC interlocutors emotionally reactto the court decision by calling for Talat to walk out of the talks; one TC businessman (a strong Annan Plan proponent) told us "they think they can force us to our knees? They can go to hell." Talat's TC critics are also pointing to alleged mistakes Talat made in the Orams case to demonstrate that he is a weak negotiator and has made the economic and political situation of Turkish Cypriots worse then it was when he was elected five years ago. 7. (C) Comment continued: While some Greek Cypriot commentators note that this ruling will do nothing to allow Greek Cypriots to actually return to their property in the north, the largely triumphalist tone of the media, the plaintiff's attorney, and most politicians leave Turkish Cypriots feeling that this is another example of the other side claiming they want a settlement but acting in a way that demonstrates otherwise. URBANCIC |