The Republic of Croatia v The Republic of Serbia

JurisdictionEngland & Wales
JudgeMR JUSTICE BRIGGS,Mr Justice Briggs
Judgment Date02 July 2009
Neutral Citation[2009] EWHC 1559 (Ch)
Docket NumberCase No: CH/2008/PTA/0880
CourtChancery Division
Date02 July 2009

[2009] EWHC 1559 (Ch)


Before: Mr Justice Briggs

Case No: CH/2008/PTA/0880

The Republic Of Croatia
The Republic Of Serbia

Professor James Crawford SC & Mr Simon Olleson (instructed by Ince & Co, International House, 1 St Katharine's Way, London E1W 1AY) for the Appellant

Mr Daniel Margolin & Professor Dan Sarooshi (instructed by Clyde & Co LLP, 51 Eastcheap, London EC3M 1 JP) for the Respondent

Hearing dates: 15 th– 16 th June 2009

Approved Judgment

I direct that pursuant to CPR PD 39A paragraph 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.


Mr Justice Briggs :


This is an appeal (by permission of Warren J given on 13 th January 2009) against the order of the Adjudicator to HM Land Registry (Mr Edward Cousins QC) made on 11 th December 2008, whereby he directed the Chief Land Registrar to cancel an application by the Republic of Croatia dated 8 th February 2007 to enter restrictions on the registered title to the ground floor flat known as 4 Zetland House, Marloes Road, London W8 5LB with title number NGL216972 (“the Property”).

The Background Facts


There is no significant dispute of fact in this case, and the relevant background may therefore be summarised as follows.


The relevant registered interest in the Property is a long leasehold granted on 24 th December 1971 for a term of 84 years and registered on 5 th August 1974 in the name of the “Socialist Federal Republic of Yugoslavia (Ministry of Defence)”. I shall refer to that Republic as “the SFRY”. It ceased to exist as a result of dismemberment (or “dismembratio”), when four of its six constituent republics declared independence. They were the Republic of Croatia (“Croatia”), the Republic of Slovenia, the Republic of Bosnia-Herzegovina and the former Yugoslav Republic of Macedonia.


The remaining two republics of the SFRY, namely Serbia and Montenegro together initially formed the Federal Republic of Yugoslavia (“the FRY”). In 2003 the FRY formed itself into a single state, known as Serbia and Montenegro, but in 2006 Montenegro declared its independence, leading to a division of that unified state into its two constituent parts.


The consequence of the dismemberment of the SFRY was that its original six constituent republics (reduced temporarily to five by the formation of the FRY) became for public international law purposes the successor states of the SFRY. This was originally challenged by the FRY, which claimed to be the sole successor or “continuator” state, but the view that all five became successor states had become common ground, at least between the parties to this appeal, by April 2006, when that was so stated to Morritt C during the hearing of Re AY Bank Ltd (in liquidation) [2006] EWHC 830 (Ch) [2006] 2 All ER (Com) 463.


In mid-2001, after lengthy negotiations, the successor states to the SFRY entered into a written agreement, known as the Agreement on Succession Issues (“the ASI”), designed to resolve, either immediately or by a process of further negotiating and dispute resolution, all issues as to the distribution among them of the rights, obligations, assets and liabilities of the SFRY. The ASI was in due course ratified by all the successor states, and came into force on 2 nd June 2004. On the same date it was registered with the Secretary General of the United Nations.


On 22 nd November 1995 the United Nations Security Council passed Resolution 1022, by paragraph 1 of which sanctions previously in force were suspended. Paragraph 6 provided as follows:

“…the suspension or termination of obligations pursuant to this resolution is without prejudice to claims of successor States to the former Socialist Federal Republic of Yugoslavia with respect to funds and assets; stresses the need for successor States to reach agreement on the distribution of funds and assets and the allocation of liabilities of the former Socialist Federal Republic of Yugoslavia; encourages all States to make provision under their national law for addressing competing claims of States, as well as claims of private parties affecting funds and assets; and further encourages States to take appropriate measures to facilitate the expeditious collection of any funds and assets by the appropriate parties and the resolution of claims related thereto.”


Article 3 of, and Annex B to, the ASI established a self-contained procedure for resolving disputes as to the distribution to the successor states of the diplomatic and consular properties owned around the world by the former SFRY. Article 1 of Annex B provided for an interim partial distribution to successor states of certain key properties, including the distribution of the London embassy to Bosnia-Herzegovina. Article 2(1) provided that:

“SFRY diplomatic and consular properties shall be distributed in kind (i.e. as properties) rather than by way of monetary payments.”

Article 3 provided a distribution guideline pursuant to which the successor states were each to obtain stated percentages by value of the diplomatic and consular properties, by way of distribution in kind. Pursuant to Article 3, Croatia was to receive 23.5% and the FRY was to receive 39.5%.


Article 4(1) provided as follows:

“SFRY diplomatic and consular properties are set out in the list appended to the Annex. That list groups properties according to their geographical regions. Each successor State shall, within each geographical region, be entitled to its proportionate share as set out in Article 3.”

The remainder of Article 4 set out a procedure for agreement of the distributions to be made to each successor state, and Article 5 established a Joint Committee composed of an equal number of representatives from each state to ensure the effective implementation of Articles 3 and 4. The functions of the Joint Committee were stated to include:

“verifying and as necessary amending the List referred to in Article 4(1)


Pending resolution of issues as to distribution, Article 2 of the ASI and Article 7 of Annex B acknowledged the principle that each successor state with the practical ability to preserve relevant diplomatic and consular properties should do so. Article 2 provided as follows:

“Each successor State acknowledges the principle that it must at all times take the necessary measures to prevent loss, damage or destruction to State archives, State property and assets of the SFRY in which, in accordance with the provisions of this Agreement, one or more of the other successor States have an interest.”


The list of diplomatic properties appended to Annex B identified, as items 66 and 67, the London embassy and residence of the former SFRY, but the Property (the subject matter of this litigation) was not included. Nonetheless Article 7 of the ASI provided that its provisions were finally to settle the mutual rights and obligations of the successor states in respect of succession issues covered by the agreement.


Article 3 of, and Annex F to, the ASI made separate provision for the determination of the sharing among the successor states of other rights, interests and liabilities of the SFRY not specifically dealt with elsewhere in the Agreement. In short, all such claims were to be considered by the Standing Joint Committee established under Article 4 of the ASI, which was a different committee from the bespoke Joint Committee established by virtue of Article 5 of Annex B. Neither that Joint Committee nor the main Standing Joint Committee have made any determination as to the succession to the Property, nor does the evidence suggest that there is any timetable whereby any such determination is in the process of being addressed, although Croatia has requested it.


In the meantime, the Property continues to be registered in the name of a state (the SFRY) which has not existed since, at the latest, 1992, and is now occupied by a person serving at the Serbian Embassy.

The Procedural History of this Application and Appeal


Croatia made its application for restrictions by Form RX1 on 6 th February 2007, seeking restrictions in Form N or, alternatively, restrictions in Form A and Form II, pursuant to the provisions of section 42 of the Land Registration Act 2002 (“the LRA”). The restrictions sought were in the following terms:

i) No disposition of the registered estate by the proprietor is to be registered without a written consent signed on behalf of the Republic of Croatia by its conveyancer, Ince & Co, International House, 1 St Katharine's Way, London E1W 1AY. (Form N).

ii) No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court. (Form A).

iii) No disposition of the registered estate is to be registered without a certificate signed by the applicant for registration or his conveyancer that written notice of the disposition was given to the Republic of Croatia at Ince & Co, International House, 1 St Katharine's Way, London E1W 1AY” (Form II).

Restrictions (ii) and (iii) were sought as a combined alternative to restriction (i). Croatia's application followed an earlier application dated 19 th January 2007, to enter a unilateral notice, which the Chief Land Registrar in due course rejected in March 2007, and cancelled in September 2007. In the meantime the Chief Land Registrar informed Croatia that its alternative application (i.e. for restrictions (ii) and (iii)) would be entered subject to service of notice. After being notified, Lieutenant Colonel Randeljovic, then in occupation of the Property, objected on behalf of Serbia to the entry of...

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