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Cyprus

State must pay company €9m in damages in expropriation case, ECHR rules

By Angelos Anastasiou

A Cypriot company has been awarded almost €9 million in damages by the European Court of Human Rights over a land expropriation case in which the Cyprus government notified the owners of the expropriation in 1972 but paid them for it in 1995 – at 1972 prices.

According to the court’s ruling, the seafront property had been worth CYP2,150,000 in 1995, but the government paid the owners less than CYP300,000 – which corresponded to the 1972 price – because, according to the law, the basis of prices payable on expropriated land was the ‘date of notification’.

In addition, the court ruled that nine years – 1995 to 2004 – for a final ruling by domestic courts on this case was an excessive period, due to which the plaintiff was entitled to “non-pecuniary damages”.

It added that the government’s assertion that most of the fault for the delay lay with the plaintiff was irrelevant to the case.

While the 1995 expropriation had been lawful, the court assessed, the value paid was “not reasonably related” to the value of the property at that time.

In determining the amount of damages to award, the ECHR considered five steps: determining the full market value of the property at the time of the compulsory acquisition; considering whether any legitimate objectives of public interest called for less than reimbursement of the full market value of the property; deducting the amount of compensation already paid; adjusting the sum to inflation; and awarding interest on the sum payable.

After employing these five steps, the court awarded the plaintiff damages of €8,750,000.

For the protracted length of domestic proceedings, the court awarded an additional €6,400.

Lastly, the ECHR awarded the plaintiff €23,445 for legal costs and expenses.

According to the ruling, the Cyprus government must pay the applicant company the above sums “within three months from the date the judgement becomes final”, but if the three-month period expires without settlement, “interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points”.

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