The ramifications of the Cyprus court ruling against David and Linda Orams continue to exercise the minds of those involved in the sale of properties in the Turkish Republic of Northern Cyprus (TRNC) to residents of the European Community.

Mr Aposolides, the pre-1974 owner of the land in question, has obtained an order from the Greek Cypriot court ordering Mr and Mrs Orams to demolish the house which they have built and to pay compensation.

Mr and Mrs Orams divide their time between their property in Northern Cyprus and England, where the continue to have assets.

It is acknowledged that the order in so far as it relates to the demolition of the property and the delivery up of the land to Mr Aposolides is incapable of enforcement but the importance of the case is that since Cyprus’ accession to the European Union (EU) on 1 May 2004 Mr Aposolides believes that he has the right to use the provisions of European Law to enforce the money judgment which he has obtained.

A Turkish Cypriot legal commentator has referred to the assimilation of the 1968 Brussels and Lugano Conventions into Cyprus law by virtue of its accession to the EU.  Those Conventions have of course now been replaced by a more recent Directive (44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters).

The Directive will require detailed consideration should Mr Aposolides seek to enforce his judgment in England.

The broad aim of the Directive (as with the Conventions which preceded it) is to make a judgment obtained through the Courts in one Member State of the EU enforceable in any other Member State without any re-consideration of the merits of the case.  Generally speaking provided that the form of judgment is seen to be correct the Courts in the enforcing State will give effect to the judgment without further proof.

Ther are a number of points which will have to be considered should the matter come before the English Court.

The Directive sets out in Article 34 the limited number of grounds on which a judgment obtained in one member state may not be recognised in others.

Of particular importance in the Apostolides case is the fact that a judgment will not be recognised where it has been given in default, if the Defandant has not been served with the relevant court papers or has not been given a proper opportunity to defend the case.  It would seem that this will be a defence which Mr and Mrs Orams will be able to raise in any enforcement proceedings brought in England.

Of wider importance, given that circumstances may exist in which proceedings could have been served properly and the judgment obtained other than by default, is the provision in the Directive that a judgment will not be recognised if such recognition “is manifestly contrary to public policy in the member state in which recognition is sought” 

A number of issues of public policy arise.

An English Court may be prepared, on grounds of public policy, to examine whether

The Cyprus court had jurisdiction to hear the claim in the first place.

Article 22 of the Directive provides that where the subject matter of the dispute is real property (e.g. land and buildings) only the Courts in the Member State in which the property is situated will have jurisdiction to hear the claim. 

The non-recognition of the TRNC is a matter of political determination rather than legal reasoning.  The principles of international law would all point to TRNC meetings the requirements for a separate and independent state.  Reference has been made to the European Court decision in Loizidou –v- Turkey.  Writing in Cyprus Today (27 November to 3 December 2004) the Turkish Cypriot legal commentator, Mert Guclu, has also referred to a decision of the English Court of Appeal in Hesperides Hotels –v- Aegean Turkish Holidays.  The writer expresses some surprise at the references to Lord Denning’s comments in the latter case.  It must be borne in mind that the case subsequently went on appeal to the House of Lords where the decision of the Court of Appeal was overturned.   The Court of Appeal felt itself bound by a Certificate issued by the Secretary of State for Foreign Affairs which stated that Her Majesty’s Government did not recognise the TRNC either de jure (as a matter of right) or de facto (as a fact).  It must be questioned, some 25 years on, whether the Foreign Office would deny to a stable, democratic society which clearly gives effect to the desire for self-determination of the Turkish Cypriot community, at least a recognition that it is de facto an separate independent state. Importantly the House of Lords in the Hesperides case were addressed in argument on whether the TRNC ought to be recognised as a legal (if not political) entity.  Although  the House of Lords were able to reach their decision on other grounds and so declined to decide the issue they clearly did not accept the issue of the Certificate as determinative and it must therefore be open for further consideration.   The Loizidou case needs to be considered in the light of the fact that it was decided some considerable time ago.  Indeed one of the findings of the Court was that the TRNC was substantially controlled and operated by the Turkish Government and military, a situation which no longer applies to any degree. 

In practical terms the land in dispute is not situated in a Member State. The English and other courts have often recognised the existence of legal systems, laws and rules even where the entity which has made or introduced them is not recognised.  This line of authority goes back as far as the 1930’s with the unrecognised state of Manchuria and has also been applied to Taiwan.  In the case under review the successful plaintiff has no chance of enforcing his judgment in the jurisdiction in which he has obtained it and his only hope is to look to a foreign court to help him out.  It must be a consideration whether public policy as interpreted by the English Courts will consider whether that is a proper way to proceed.

Here at PI Property International PLC and Medview Homes, with our considerable experience of dealing with UK residents, we have always been aware of the potential for someone in the Southern part of the island to attempt to put off potential buyers.  It is for that reason that we, alone of all the developers in the TRNC, have offered our guarantee and indemnity to protect our buyers against any damaging action.

Mr Apostolides may have his judgment in Cyprus but he has a considerable way to go before that judgment becomes worth more than the paper on which it is written.

Martin Clitheroe LL.B (Hons)

In-House Legal Advisor

PI Property International Plc and Medview Homes

London Office