Loizidou v. Turkey (Article 50) (1998) 23 E.H.R.R. CD5 ECHR

Before the European Commission of Human Rights

ECHR

For the facts of this case see the principal judgment, Loizidou v. Turkey, reported at (1997) 23 E.H.R.R. 513.

The Law

19. Article 50 provides as follows:
If the Court finds that a decision or a measure taken by a legal authority or any other authority of a High Contracting Party is completely or partially in conflict with the obligations arising from the ... Convention, and if the internal law of the said Party allows only partial reparation to be made for the consequences of this decision or measure, the decision of the Court shall, if necessary, afford just satisfaction to the injured party.
20. The applicant and the Cypriot Government submitted that an award of compensation should be made in the present case in the light of the Court's finding of a violation of her property rights. In the course of the hearing before the Court the applicant withdrew a claim, which had been made in her memorial for the restoration of her rights.
The Turkish Government, on the other hand, submitted that there was no entitlement to just satisfaction.

I. Entitlement to just satisfaction

21. In the submission of the Turkish Government it cannot be held liable in international law for the acts of the "Turkish Republic of Northern Cyprus". There is no legal basis for holding Turkey liable as it is well settled in international law that the first condition that has to be satisfied for a State to incur liability is that the unlawful act or conduct is attributable to the State on whose behalf the perpetrator of the unlawful act or conduct was acting.
Regard should be had to the fact that the Commission has accepted, even in cases where the allegedly unlawful act resulted directly from the actions of a national authority, that a national authority cannot incur liability where jurisdiction in the relevant sphere has been transferred to an international organization (see M. and Co. v. Germany, D.R. 64, page 139).
Any power that Turkey has in Cyprus is derived from the Zürich and London Agreements of 1959 and the treaties signed in 1960, which remain in force. Subsequent agreements or texts (such as the Geneva Declaration of 30 August 1974, the "ten-point" agreement of 1979 or the Set of Ideas of 1992) have not conferred any new responsibilities on Turkey. The activity complained of, in other words the alleged unlawful act, must result directly from an act attributable to the State, whether it be an administrative act, an act of the military authorities, of the legislature or of the judiciary. There is no case where a third-party State has been held liable for the acts of another State-- whether or not such State is recognized--which exercises effective authority through constitutionally established organs.
It would therefore be incompatible with principles of international law to award compensation against Turkey.
In addition, the Turkish Government stressed that the question of property rights and reciprocal compensation is the very crux of the conflict in Cyprus. These issues can only be settled through negotiations and on the basis of already agreed principles of bi-zonality and bi-communality. Inevitably the principle of bi-zonality will involve an exchange of Turkish Cypriot properties in the south with Greek Cypriot properties in the north and, if need be, the payment of compensation for any difference. An award under Article 50 would undermine the negotiations between the two communities and would spoil the efforts to reach a settlement on the basis of agreed principles and criteria.
In conclusion, it was submitted that compensation was not "necessary" under the terms of Article 50. Moreover the claim should be disallowed on the basis that this provision requires that the "decision" or "measure" involved be that of a "High Contracting Party". For the reasons given above that was not the situation in the present case.
22. The applicant pointed out that the Court's principal judgment on the merits had established that there was a continuous breach of Article 1 of Protocol No. 1 which was imputable to Turkey. In accordance with the principle ubi ius ibi remedium it was necessary to make an award to ensure that the applicant was not left without a remedy.
23. The Cypriot Government emphasized that Article 50 proceedings do not constitute an appeal from the Court's judgments on the preliminary objections and the merits. It was not open to those appearing before the Court to seek to re-litigate issues upon which the Court had already decided. Article 50 was applicable in the present case since no reparation had been made by the Turkish Government in respect of the violation of the applicant's property rights.

24. The Delegate of the Commission also maintained that the applicant should receive just satisfaction. The fact that political efforts were being made to resolve the "Cyprus problem" was not a valid reason for refusing to make an award.

25. The Court recalls its finding in paragraph 57 of its principal judgment on the merits in the present case "that the continuous denial of the applicant's access to her property in northern Cyprus and the ensuing loss of all control over the property is a matter which falls within Turkey's "jurisdiction" within the meaning of Article 1 and is thus imputable to Turkey".
The Court also found that the applicant must be regarded to have remained the legal owner of the land for purposes of Article 1 of Protocol No. 1 and that "as a consequence of the fact that [she] has been refused access to the land since 1974, she has effectively lost all control as well as all possibilities to use and enjoy her property" (ibid., paragraph 63). It concluded that the continuous denial of access to her property was an unjustified interference with her property rights in breach of Article 1 of Protocol No. 1 (ibid., paragraph 64).

26. In view of the above the Court is of the opinion that the question of Turkey's responsibility under the Convention in respect of the matters complained of is res judicata. It considers that it should make an award under Article 50. It is not persuaded by the argument that in doing so it would undermine political discussions concerning the Cyprus problem any more than it was by the same argument at the merits stage as regards finding a violation of Article 1 of Protocol No. 1 (paragraphs 59 and 64).
That being the case the Court finds that the applicant is entitled under Article 50 to a measure of just satisfaction by way of compensation for the violation of her property rights.

II. Pecuniary damage

27. The applicant stressed that she did not claim compensation for any purported expropriation of her property. In the light of the Court's finding that she is still the legal owner of the property no issue of expropriation arises. Her claim is thus confined to the loss of use of the land and the consequent lost opportunity to develop or lease it. With reference to a Valuation Report assessing the value of her property and the return that could be expected from it, she claimed 621,900 Cypriot pounds (CYP) by way of pecuniary damage concerning the period between 22 January 1990, the date of the acceptance by Turkey of the compulsory jurisdiction of the Court, and the end of 1997.
The method employed by the Valuation Report involved calculating the market price of the property as at 1974 and increasing it by 12 per cent per year to calculate the value that the property would have had if the northern part of Cyprus had not been occupied by the Turkish army. It was emphasized that the property was situated in an area of Kyrenia, which in 1974 had been undergoing intensive residential and tourist development. The occupation of the properties had deprived the owner of her right to lease and thus resulted in a substantial loss of rent.
The sum claimed by way of pecuniary damage represented the aggregate of ground rents that could have been collected during the period of 1990-97 calculated as 6 per cent of the estimated market value of the property for each of the years in question.
28. The Cypriot Government supported the applicant's claim. In particular it contended that Turkey's continued unlawful occupation of part of the Republic of Cyprus should not be used as a reason to reduce the amount awarded by way of pecuniary damage. To do so would be to permit a wrongdoer to benefit from his wrongdoing since the violation of the Convention found in the present case arose as a consequence of the unlawful invasion and occupation of part of the island by Turkey.
29. The Turkish Government maintained that the claim for damage should not be entertained by the Court for the reasons set out above (see paragraph 21 above). It did not offer any comments on the amount claimed by the applicant under this head.

30. The Delegate of the Commission submitted that the valuer's opinion on the development potential of the land which had been prepared on the applicant's behalf did not provide a realistic basis for the assessment of the pecuniary damage. The historical events in Cyprus affected not only the applicant individually but numerous other people in a similar situation. They could not therefore be completely disregarded. The applicant was entitled to be fully compensated for loss of access to and control of her property but not for the diminished value of that property due to the general political situation. In his view CYP 100,000 would be a more appropriate award.

31. The Court recalls that the applicant is still the legal owner of nine plots of land and one apartment and that its finding of a violation of Article 1 of Protocol No. 1 was based on the fact that, as a consequence of being denied access to her land since 1974, she had effectively lost all control as well as all possibilities to use and enjoy her property (see the principal judgment cited above, paragraphs 60-64). She is therefore entitled to a measure of compensation in respect of losses directly related to this violation of her rights as from the date of Turkey's acceptance of the compulsory jurisdiction of the Court, namely 22 January 1990, until the present time.

32. Although the Turkish Government has limited its submissions to contesting the applicant's right to compensation and has thus not sought to challenge the applicant's approach to the calculation of her economic loss, the Court does not for this reason alone accept without question the estimates provided by the applicant.
33. In this regard the Court considers as reasonable the general approach to assessing the loss suffered by the applicant with reference to the annual ground rent, calculated as a percentage of the market value of the property, that could have been earned on the properties during the relevant period.
However, the applicant's valuation inevitably involves a significant degree of speculation due to the absence of real data with which to make a comparison and makes insufficient allowance for the volatility of the property market and its susceptibility to influences both domestic and international. Her method of assessment pre-supposes that property prices in the Kyrenia area would have risen consistently by 12 per cent each year from 1974 until 1997 and that the applicant would have actually sought to or have been able to rent her plots of land at 6 per cent of this enhanced value. Even making allowances for the undoubted development potential of the area in which the land is situated, the presumption that the property market would have continued to flourish with sustained growth over a period of 23 years is open to question. The Court accordingly cannot accept these percentage increases as a realistic basis for calculating the applicant's loss.
34. Taking into account the abovementioned uncertainties, inherent in any attempt to quantify the real losses incurred by the applicant, and making an assessment on an equitable basis the Court decides to award CYP 300,000 under this head.

III. Non-pecuniary damage

35. The applicant also claimed CYP 621,900 in respect of non-pecuniary damage. She contended that various aggravating factors directly concerning her should be taken into account in the Court's assessment. These encompassed distress and feelings of frustration in face of the prolonged deprivation of her rights as well as feelings of helplessness connected to the presence of the Turkish army in northern Cyprus and her unsuccessful efforts to have the property returned to her. It also had to be borne in mind that the applicant had grown up in Kyrenia where her family had lived for generations and was now a displaced person in her own country. The fact that the Turkish Government had not sought to provide any justification for the interference with her property rights was a further aggravating factor to be taken into account.
In the applicant's submission there were also factors related to considerations of the public interest and the public order of Europe. In addition to the obligation to compensate there was in the present situation a need for a large award of non-pecuniary damages to act as an inducement to observe the legal standards set out in the Convention. The slowness and depressing effects of the procedural pathways open to the applicant, the dilatory attitude of the respondent Government and the various unfounded objections raised by it throughout the procedure also had to be taken into account.
A further aggravating factor related to the consistent policy of Turkey and her agents in the occupied area to exercise control over, and to exclude, the Greek Cypriot owners of property on a discriminatory basis. Such policies amounted to racial discrimination, were a source of distress to the applicant and constituted an affront to international standards of human rights.
36. The Cypriot Government supported the applicant's claims under this head. It considered that the sense of helplessness and frustration was deeply felt by the applicant in relation to denial of access and that there was a strong family relationship with regard to the property in question, which forms part of the family heritage. The ethnic discrimination practiced against Greek Cypriots was also a relevant consideration and must have had an impact upon the feelings of the applicant.
37. The Turkish Government offered no observations under this head.
38. The Delegate of the Commission considered that an award should be made but was unable to accept some of the "aggravating circumstances" invoked by the applicant, in particular her arguments that she had been deprived of her home-- the Article 8 complaint having been dismissed by the Court--and that she had been discriminated against as a Greek Cypriot--no complaint under Article 14 having been raised in the original application. He further considered that no punitive element should be imported into the application of Article 50 since the "public policy" considerations adduced by the applicant concerned the global situation of displaced Greek Cypriots and thus went far beyond the perimeters of the individual case. He considered that CYP 20,000 would be an appropriate award.
39. The Court is of the opinion that an award should be made under this head in respect of the anguish and feelings of helplessness and frustration, which the applicant must have experienced over the years in not being able to use her property as she saw fit.
40. However, like the Delegate of the Commission, the Court would stress that the present case concerns an individual complaint related to the applicant's personal circumstances and not the general situation of the property rights of Greek Cypriots in northern Cyprus. In this connection it recalls that in its principal judgment it held that "it need not pronounce itself on the arguments which have been adduced by those appearing before it concerning the alleged lawfulness or unlawfulness under international law of Turkey's military intervention in the island in 1974" (cited above, paragraph 56). It also rejected the applicant's allegations that there had been a violation of the right to respect for her home (ibid., paragraphs 65-66) and made no finding concerning the question of racial discrimination, which had not formed part of the applicant's complaint under the Convention.
Making an equitable assessment, the Court awards CYP 20,000 under this head.

IV. The applicant's costs and expenses

41. The applicant, who had submitted detailed bills of costs in connection with the different stages of the proceedings before the Commission and Court, claimed CYP 137,084.83 by way of costs and expenses, inclusive of value added tax. The Cypriot Government supported her claim which was composed of the following items:
(a) CYP 34,571.25 concerning the proceedings before the Commission;
(b) CYP 30,190 concerning the preliminary objections phase before the Court;
(c) CYP 49,112.38 concerning the merits phase before the Court;
(d) CYP 23,211.20 concerning the Article 50 proceedings.
She submitted that in this kind of exceptional case involving many hearings before both the Commission and Court it was justified to have recourse to the services of two Cypriot lawyers as well as Queen's Counsel.
42. The Turkish Government did not comment on the applicant's submissions under this head.
43. The Delegate considered that the costs were excessive since it was not necessary for the applicant to have been represented at most stages of the proceedings by two lawyers and additional advisers. In addition, the applicant had obtained substantial support from the Cypriot Government.
44. The Court considers that, within the context of the applicant's property complaints, the present case raised complex issues of fundamental importance concerning the Convention system as a whole. It also involved several hearings before the Commission and three hearings before the Court. The applicant was thus entitled to avail of the services of two Cypriot lawyers and a specialist Queen's Counsel from the United Kingdom in order to represent her interests.
It concludes that the costs and expenses were actually and necessarily incurred and reasonable as to quantum and should be awarded in full.

V. The Cypriot Government's costs and expenses

45. The Cypriot Government submitted that it also should be reimbursed the costs and expenses in bringing the case before the Court. It claimed CYP 48,315.77 in this respect. It explained that it was seeking to recover expenses only--and not compensation--since significant resources had been allocated to the case, an approach which had been amply justified by the two judgments of the Court.
46. The Turkish Government made no remarks concerning this claim.
47. The Delegate of the Commission, however, opposed it.
48. The Court recalls the general principle that states must bear their own costs in contentious proceedings before international tribunals (see, for example, Article 64 of the Statute of the International Court of Justice and the Advisory Opinion of the Court in "Application for Review of Judgment No. 158 of the United Nations Administrative Tribunal", I.C.J. Reports 1993, page 211, paragraph 96). It considers that this rule has even greater application when, in keeping with the special character of the Convention as an instrument of European public order (ordre public), High Contracting Parties bring cases before the Convention institutions, whether by virtue of Article 24 or of Article 48 (c), as part of the collective enforcement of the rights set out in the Convention or by virtue of Article 48 (b) in order to protect the rights of their nationals. In principle, it is not appropriate, in the Court's view, that states which act, inter alia, in pursuit of the interests of the Convention community as a whole, even where this coincides with their own interests, be reimbursed their costs and expenses for doing so.
Accordingly the Court rejects the Cypriot Government's claim for costs and expenses.

VI. Default interest

49. According to the information available to the Court, the statutory rate of interest applicable in Cyprus at the date of adoption of the present judgment is 8 per cent per annum.
For these reasons, THE COURT
1. Dismisses by 15 votes to 2 the respondent State's claim that the applicant has no entitlement to an award of just satisfaction under Article 50 of the Convention;
2. Holds by 14 votes to 3 that the respondent State is to pay to the applicant, within three months, CYP 300,000 for pecuniary damage;
3. Holds by 15 votes to 2 that the respondent State is to pay to the applicant, within three months, CYP 20,000 for non-pecuniary damage;
4. Holds by 13 votes to 4 that the respondent State is to pay to the applicant, within three months, CYP 137,084 and 83 cents for costs and expenses;
5. Holds by 15 votes to 2 that simple interest at an annual rate of 8 per cent shall be payable on the above amounts from the expiry of the abovementioned three months until settlement;
6. Dismisses unanimously the Cypriot Government's claims for costs and expenses;
7. Dismisses unanimously the remainder of the claim for just satisfaction.
In accordance with Article 51(2) of the Convention and Rule 53(2) of Rules of Court A, the following dissenting opinions are annexed to this judgment:
(a) partly dissenting opinion of Mr Morenilla;
(b) partly dissenting opinion of Mr Mifsud Bonnici;
(c) dissenting opinion of Mr Gölcüklü;
(d) dissenting opinion of Mr Pettiti.

Partly Dissenting Opinion of Judge Morenilla

I agree with the majority that the applicant should receive just satisfaction for the continuing denial of access to her property in northern Cyprus and the ensuing loss of all control over it which was imputable to Turkey, as stated by the Court in the principal judgment of 18 December 1996. (Reports of Judgments and Decisions 1996-VI, page 2,236, paragraph 57). I disagree, however, with points 2 and 4 of the operative provisions for the following reasons:
As regards point 2, the majority has unrealistically disregarded the general political situation of the region where the applicant has property when examining her claim for pecuniary damage for the loss of use of the land and the consequent loss of opportunity to develop or lease it during the past eight years, and when making an equitable assessment of this (paragraphs 33 and 34 of this judgment). As with the Delegate of the Commission (paragraph 30), I consider that CYP 100,000 would be the appropriate compensation.
As regards point 4, I find excessive the sum of CYP 137,084.83 for costs and expenses awarded to the applicant to be paid by the respondent State. Under Article 50 of the Convention, as interpreted by case law of the Court (see, Pine Valley Developments Ltd v. Ireland (Article 50) (1993) 16 E.H.R.R. 379, paragraph 19), the injured party is entitled to recover costs which were necessarily incurred. But in the present case, I do not consider it necessary for the applicant to have been represented before the Commission and the Court by two Cypriot lawyers and a foreign international law specialist, since, in my view, one lawyer would have sufficed to deal properly with the legal issues involved in this case. I therefore consider that the respondent State should only be held liable to pay one-third of this amount.

Partly Dissenting Opinion of Judge Mifsud Bonnici

1. I could not vote in favor of granting to the applicant the sum of CYP 137,084.83 for the costs and expenses claimed by her. The sum is equivalent to £185,064.52 at the rate of exchange quoted by the applicant of 1 CYP = £ 1.35.
2. Like the Delegate of the Commission in his oral pleadings before the Court and a minority of my brother judges, I find the claim to be excessive and exaggerated.
3. It is of course clear that the case was complicated and difficult, but, nevertheless these qualifications do not justify the hefty bill of costs and expenses which was submitted and which, surprisingly, the majority of the Court accepted. That Government contributed to this result by omitting to make any submissions in the matter. The Turkish Government, likewise, did not make any submissions as to the applicant's approach to the calculation of her economic loss (see paragraph 32 of the judgment) but even so, as the Court rightly observes, it cannot, for this reason alone accept without question the applicant's submissions. In my view the same holds good for the question of costs and expenses.
4. To illustrate my criticism of the applicant's claim under this head, I will limit myself to the following details:
(a) According to the bill of costs dated 26 June 1995 the fees for the two Cypriot lawyers engaged in the research and preparation of submissions, as well as submissions in reply and the conduct of the oral hearing on the merits, amounted to £18,900 (CYP 14,000) while those relating to the services of specialist Counsel and advocate for research work, a visit to Cyprus for consultations, preparation of submissions in reply and conduct of oral hearing on the merits amounted to £35,888 (CYP 29,416), i.e. a total of £ 54,788.
(b) For that part of the case which dealt with the preliminary objections, on the same description--the Cypriot lawyers charged £12,150 (CYP 9,000) while the specialist Counsel and advocate billed £24,000 (CYP 17,760)--a total of £36,150.
(c) Lastly, for the third and last stage--that concerning Article 50--for the preparation of the applicant's memorial and the oral hearing, the bills amounted to £9.045 (CYP 6,700) and £18,795 (CYP 15,406) a total of £27,840 respectively.
The memorial in question consisted of 22 double-spaced pages, a third of which are devoted to quotations mostly from judgments of the Court.
A grand total of £118,778 in lawyers' fees is in my opinion excessive and unjustified.
(d) Finally, to illustrate further why I did not vote in favor of awarding the costs and expenses, in full and "en bloc" I noticed that, in connection with her claims under Article 50, the applicant commissioned a Valuation Report of her property in Cyprus, by a firm of Cypriot valuers. The total cost amounted to CYP 1,734. Their approach set out in this report was not accepted by the Court as it involved a significant degree of speculation and did not make any allowance for the volatility of the property market and its susceptibility to domestic and international influences (paragraph 33). In spite of this, the cost was allowed.

Dissenting Opinion of Judge Gölcüklü

I regret that I am unable to agree with the opinion of the majority of the Court concerning "just satisfaction".
My opinion on the application of Article 50 not only extends and reiterates my dissent regarding the judgments on "preliminary objections" of 23 March 1995 (1995) 20 E.H.R.R. 99 and on the "merits" of 18 December 1996, but is also based on substantive issues inherent in the concept of just satisfaction as provided for in Article 50 of the Convention.
1. According to the words of that provision, the Court's case law and the unanimous opinion of legal writers, Article 50 does not necessarily create an absolute obligation for the Court to award compensation.
The discretionary nature of the Court's powers regarding just satisfaction is derived both from its power to determine if necessary to award compensation and from the fact that such a decision by the Court does not concern a matter of ordre public. There is therefore no requirement under the Convention, nor any subsequent practice of the Court obliging it to award any particular sum to the applicant.
The Court itself, even in strictly individual cases having no bearing on inter-national politics, has very often--and in connection with certain Articles of the Convention systematically--chosen not to award just satisfaction, taking the view that the finding of a violation already constituted sufficient satisfaction.
As President Bernhardt also pointed out in his dissenting opinion attached to the principal judgment, the Loizidou case concerns the possessions of a large number of people, a question which forms an inseparable part of the solution to the Cypriot problem. The proposals of the directly interested parties appear in the "Set of ideas on an overall framework agreement on Cyprus" .
Ignoring the complexity and political difficulties of an international problem that has already lasted 35 years and confining it to an individual dimension will surely not help to bring about a rapid solution.
2. I am of the opinion that in this case "just satisfaction" should not be awarded, nor should costs be reimbursed.
3. This Loizidou case is not an isolated case concerning the applicant alone (the intervention of the Greek Cypriot administration is manifest proof of that); it concerns on the contrary all the inhabitants of the island, whether of Turkish or Greek origin, who were displaced following the events of 1974, a fact which should cause no surprise.
At the heart of the Loizidou v. Turkey case lies the future political status of a State that has unfortunately disappeared, a question to which all the international political bodies (the United Nations, the European Union, the Council of Europe, etc.) are now seeking an answer. A question of such importance can never be reduced purely and simply to the concept of the right of property and thus settled by application of a Convention provision which was never intended to solve problems on this scale.
I agree entirely with Judge Morenilla's statement in his dissenting opinion that "the majority has unrealistically disregarded the general political situation of the region where the applicant has property when examining her claim for pecuniary damage for the loss of use of the land and the consequent loss of opportunity to develop or lease it during the past eight years, and when making an equitable assessment of this (paragraphs 33 and 34 of this judgment)."
4. Lastly, as I observed above, by intervening in this case, that is by bringing it before the Court, the Greek Cypriot administration has completely altered the nature of the case for Convention purposes. It has become an interstate case. In spite of its deceptive appearance, the judicial and legal stage in this case is occupied by the representatives of the Greek Cypriot administration. As the Court has itself accepted in interstate cases, the parties must themselves bear the costs and expenses they incur in such proceedings. The applicant should not therefore be awarded costs. In the alternative, I would say, in agreement with Judge Morenilla in his dissenting opinion, that in the present case it was not necessary "for the applicant to have been represented before the Commission and the Court by two Cypriot lawyers and a foreign international law specialist, since ... one lawyer would have sufficed to deal properly with the legal issues involved in this case".

Dissenting Opinion of Judge Pettiti

I voted with the minority against the decisions set out in point 1 of the operative provisions (the principle) and in points 2 to 5 awarding various sums to Mrs. Loizidou.
This was necessary so that I could remain consistent with my votes and dissenting opinions in the first two Loizidou judgments, particularly as the present judgment again refers, as regards international law, to the first judgment. My votes in the first two judgments were prompted by the political situation in Cyprus and my interpretation of international law. The fact that an international force controls the "green line" and prohibits the free movement of persons from one zone to the other and access to property in another zone should in my opinion have been taken into account by the Court. Current political developments show that the problem of Cyprus unfortunately goes well beyond the dimensions of a mere lawsuit.

(c) Sweet & Maxwell Limited

(1998) 26 E.H.R.R. CD5

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