The ECJ has recently given its ruling in Case C‑420/07, Meletis Apostolides v David Charles Orams & Linda Elizabeth Orams. The reference for a preliminary ruling was made by the Court of Appeal (England and Wales) (Civil Division) in the course of proceedings between a Cypriot national and a British couple, concerning the recognition and enforcement in the United Kingdom, under Regulation No 44/2001 (Brussels I Regulation) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, of a judgment given by the Nicosia District Court on an action concerning immovable property.
The property at stake is situated at Lapithos, in Northern Cyprus. The land used to belong to Mr Apostolides’ family who were forced to abandon their house during the invasion of Cyprus by the Turkish army in 1974. In 2002, the land was purchased by the Orams in good faith from a third party, who acquired it from the authorities of the Turkish Republic of Northern Cyprus. The Orams built a holiday home on it.
The ECJ was asked to interpret Protocol No 10 on Cyprus accession to the European Union and Council Regulation (EC) No 44/2001. The application of Community law in the northern area of the Republic of Cyprus has been suspended by the abovementioned protocol. Nevertheless, the ECJ ruled that the fact of a judgment given by a court sitting in the southern part of Cyprus concerning land situated in the northern part cannot be enforced where the land is situated does not prevent the courts of another Member State from recognize and enforce it under Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The ECJ has therefore recognized the right of a Greek Cypriot national whose family was forced to leave the north of the island at the time of its partition, to return to his land situated in Northern Cyprus.
This ruling will affect hundreds of British nationals who have bought land in Northern Cyprus. British are at risk of losing their holiday homes.
In 2004, Mr Apostolides brought an action against the Orams at a court sitting in the southern part of Cyprus. The documents instituting the proceedings were served at the property on the land by a process server from that court. The Orams were not informed of the nature of the documents which were written in Greek. The documents stated that in order to prevent a default judgment from being given they were required to enter an appearance before the Court within 10 days of service. However, the Orams’s lawyer did not enter an appearance before the court on the required day but on the following day. Hence, the court gave a default judgment on Mr Apostolides’ claim.
The Nicosia District Court found that Mr Apostolides is the rightful owner of the land. The Orams were ordered by that court to demolish the villa, to deliver to Mr Apostolides possession of the land and to pay him various sums by way of special damages and monthly occupation charges until the judgment was complied with. The Orams appeal to have the judgment given in default of appearance set aside was dismissed.
The ruling from the Nicosia court could not be enforced in Northern Cyprus therefore Mr Apostolides turned to the British courts. In 2005, Mr Apostolides apply, pursuant to Regulation No 44/2001, for the recognition and enforcement of these judgments in England. In 2006, the High Court ruled in favour of the Orams, holding that EU legislation is suspended in the Turkish Republic of Northern Cyprus. Mr Apostolides appealed against that order before the Court of Appeal which, consequently, referred several questions to the Court of Justice for a preliminary ruling.
The ECJ declared that the suspension provided by Protocol No 10 is limited to the application of the acquis communautaire in the northern area. Nevertheless, the judgments were given by a court sitting in the Government-controlled area. The Court has stated that the fact that such judgments concern land situated in the northern area does not invalidate the obligation to apply Regulation No 44/2001 in the Government-controlled area and it does not mean that that regulation must be applied in Northern Cyprus. Consequently, the ECJ ruled that the suspension of Community law in Northern Cyprus provided for by Protocol No 10 annexed to the Act of Accession does not preclude the application of Brussels I Regulation to a judgment given by a Cypriot court sitting in the Government-controlled area but concerns land situated in areas not controlled by the Cypriot Government.
Moreover, the Court held that the provisions of the Brussels I Regulation relate to the international jurisdiction of the courts of the member states and not to their domestic jurisdiction. The Court has stated that “The fact that the land is situated in the northern area may possibly have an effect on the domestic jurisdiction of the Cypriot courts, but cannot have any effect for the purposes of that regulation.” The ECJ has held that the fact that the land is situated in the northern area, where the Cyprus’s Government does not exercise effective control and, consequently, the judgments concerned cannot be enforced where the land is situated does not preclude the recognition and enforcement of those judgments in another Member State. Hence, the Court ruled that under Brussels I Regulation the courts of a Member State are not authorized “(…) to refuse recognition or enforcement of a judgment given by the courts of another Member State concerning land situated in an area of the latter State over which its Government does not exercise effective control.”
Article 34(1) of Regulation No 44/2001 provides that a judgment is not to be recognised if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought. The Court recalled that whereas it is not for the Court to define the content of the public policy of a Member State it is required to review the limits within which the courts of a Member State may have recourse to that concept for the purpose of refusing recognition to a judgment emanating from another Member State. The Court has stressed that the recourse to the public-policy clause can only be accept if the recognition or enforcement of the judgment given in another Member State would infringe a fundamental principle of the State in which enforcement is sought. Consequently, the Court stated the Member State’s court in which enforcement is sought cannot refuse recognition of a judgment from another Member State solely on the ground that it deems that national or Community law was misapplied in that judgment. The Court pointed out that the Court of Appeal has not referred to any fundamental principle within the legal order of the UK which the recognition or enforcement of the judgments in question would be liable to infringe.
The ECJ noted that the fact that Mr Apostolides might meet difficulties in having the judgements enforced cannot deprive them of their enforceability. The Court ruled that “The fact that a judgment given by the courts of a Member State, concerning land situated in an area of that State over which its Government does not exercise effective control, cannot, as a practical matter, be enforced where the land is situated does not constitute a ground for refusal of recognition or enforcement under Article 34(1) of Regulation No 44/2001 and it does not mean that such a judgment is unenforceable for the purposes of Article 38(1) of that regulation.”
Moreover, the Court stressed that Article 34(2) of Regulation No 44/2001 does not require the document which instituted the proceedings to be duly served, but does require that the rights of the defence are effectively respected. The Court pointed out that the Orams commenced proceedings to challenge the default judgment therefore Article 34(2) of Regulation No 44/2001 cannot legitimately be relied upon. Hence, the Court ruled “the recognition or enforcement of a default judgment cannot be refused under Article 34(2) of Regulation No 44/2001 where the defendant was able to commence proceedings to challenge the default judgment and those proceedings enabled him to argue that he had not been served with the document which instituted the proceedings or with the equivalent document in sufficient time and in such a way as to enable him to arrange for his defence.” Accordingly, the recognition and enforcement of the judgments of the Cypriot court cannot be refused in the United Kingdom.
The ECJ judgments are binding on national courts. In order to prevent national courts to interpret differently EU legislation the ECJ main task is to ensure that EU law is interpreted and applied equally by all EU Member States. The ECJ has therefore the last word on EU law matters and no appeal is possible. Hence, the Orams will have to return the land to its original owner, demolish their villa as well as to pay thousands of pounds on damages and unpaid rent for the time during which they used it. If they fail to do it, they could have their UK assets seized.
