C O N F I D E N T I A L SECTION 01 OF 02 NICOSIA 000045

SIPDIS

E.O. 12958: DECL: 01/26/2020
TAGS: ECON PREL CY
SUBJECT: CYPRUS ORAMS CASE; EU COURTS MUST ENFORCE RULING
OF CYPRIOT COURTS - EU CITIZEN ASSETS FAIR GAME

REF: 09 NICOSIA 315

Classified By: Ambassador Frank Urbancic for reasons 1.5 B and D


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

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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