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The investment of N.C.H. Capital Inc. in Kassiopi, Corfu and its complications

Iason Skouzos - TaxLaw > Practice Areas  > Real Estate  > The investment of N.C.H. Capital Inc. in Kassiopi, Corfu and its complications

The investment of N.C.H. Capital Inc. in Kassiopi, Corfu and its complications

The full possession and the occupation of the property in question with a surface of appr. 120 acres (489,560 sq. m.) in the area of Kassiopi, Corfu was transferred by an individual to the Greek State without consideration, in order to settle inheritance tax obligations. A little more than half of this property was classified as forest area by means of an act of the Corfu Forest Directorate. The remaining surface of the property was classified as agricultural and grass land. Within the property there is a lake with a surface of appr. 3,5 acres named “Vromolimni”.

Moreover, within the 489,560 sq. m. an area of appr. 3 acres (11,520 sq.m.) is enclosed, which was expropriated by the Greek State in the beginning of 1960’s in order to establish there the Corfu Naval Fort (already named Ag. Stefanos Naval Fort since 2001) by installing there an observatory-building, antennas and radars of the Hellenic Navy. The same area was declared in 2001 a “forbidden zone” by means of a presidential decree; around it and within the total area of the estate, a “surveillance zone” was established in order to ensure the safety of the fort.

By means of decision no. 202/21.2.2012 by the Joint Ministerial Committee for Reorganizations and Privatizations the full ownership, possession and occupation of the abovementioned property was transferred to the Hellenic Republic Asset Development Fund (TAIPED) without consideration. This decision (namely the transfer to TAIPED) was contested by the Region of Ionian Islands in May 2012, by means of filing an application for annulment with the Council of State (CoS), arguing that the decision had been issued in violation of article 24 of the Constitution and other legislation concerning the protection of the natural environment. Especially, that the property belongs to the public property of the Greek State.

By means of judgment no. 1415/2013 the Council of the State rejected the application for annulment as it decided, in brief, that the specific property belongs to the private property of the Greek State and not in the public property thereof (since it had been obtained by the State on the basis of private law provisions) and, therefore, it was lawfully transferred to TAIPED with all the encumbrances and limitations in its use imposed by applicable legislation (limitation of its surface after the demarcation of the shore line, limitations in the use of the part of the property due to its forest character, limitations due to the delimitation of the “surveillance zone” of the Naval Fort, etc.).

In other words, the CoS decided that the property has been lawfully transferred because, on the one hand it belongs to the private property of the Greek State, and on the other hand any applicable limitations in its use (wetland, forest character of part of the building, proximity to the Naval Fort, etc.) only impose some limitations to its exploitation potential without rendering it impossible. On 28.02.13 an extrajudicial notice by 39 SYRIZA MPs was served to the Chairman and the Directors of TAIPED and notified to the company “N.C.H. CAPITAL Ιnc.” The extrajudicial invitation had the subject: “The concession of the Erimitis Ecosystem in Kassiopi, Corfu by TAIPED to the company ‘N.C.H. CAPITAL Inc.’ is illegal, unconstitutional, in breach of International Law, harmful to the national economy and dangerous for the national security”.

Moreover, they have addressed questions to the Minister for National Defense, mainly with regard to the issue of the relocation of the Naval Fort, for which it is alleged that the competent Navy Council has not issued a “recommendation”, which is a required procedural formality.

During the first quarter of 2013 the CoS, by means of a relevant decision, had temporarily “frozen” the relocation of the naval fort, considering that the Supreme Navy Council (SNC) that had made a recommendation in favor of the relocation thereof to a new location, did so without knowing exactly where the new location would be, since it was provided that TAIPED were to subsequently determine it.

Thus, the presidential decree draft was returned to the Ministry of National Defense in order to determine an exact new location for the naval fort, since the Supreme Navy Council in its first recommendation “was not able to determine whether the relocation of the naval fort in the new location would ensure an equivalent result with regard to the national defense and the security of the country”. Subsequently, the Ministry for Defense submitted again the presidential decree draft for legislative drafting by the CoS, along with a new recommendation by the Supreme Navy Council. The Council of the State, finally, approved the Presidential Decree.

Pending cases before the Council of the State

In addition, two applications for annulment are pending before the CoS, which will be heard in May 2014. The first one against the Presidential Decree No. 60/ 8-5-2004 “Amendment of the Agios Stefanos Naval Fort” because the Presidential Decree (P.D.) provides for the relocation of the Ag. Stefanos Naval Fort, which is equipped with radars and is the sole one that covers the needs of surveilling the channel between Corfu and Albania. Whereas the new location of the forbidden zone of the Naval Fort is within the limits of the said property it is inside a ravine and lacks visibility, without a surveillance zone that ensures the safety of military installations (violation of law 376/1936) and therefore, it is argued, it violates article 1 of the Constitution, as it poses risks to the national security and thus harms national sovereignty.

The second application for annulment concerns decision no. 236/20.6.2013 by the Joint Ministerial Committee for Reorganizations and Privatizations (GG 1495/B/20-6-2013) by which the full ownership, possession and occupation of a part of the property that used to be the forbidden zone of the Ag. Stefanos Naval Fort is transferred to TAIPED without consideration in accordance with P.D. No. 398/2001 (GG 279/A/13.12.2001).

On January 2014 a third application for annulment was submitted to the Council of the State by the SYRIZA candidates for the Region of Ionian Islands, the SYRIZA candidates for the Municipality of Corfu, individual citizens and civil society movements against the sale of Kassiopi for the annulment of the P.D. dated 12-11-2013 with the title “Approval of the Special Spatial Development Plan for the public property named ‘Kassiopi, Corfu’”. The reasons for annulment are 15, and mainly concern the protection of otter, a protected species that lives in the Kassiopi ecosystem, and other alleged violations of environmental legislation, as well as because the contested act has not been co-signed by the Minister for Culture, in spite of the fact that, according to the claims, an ancient monument (Mylos) is located within the property.

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