250 Million Euro Project on Hvar in Question

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Norwegian investors have given millions for land they never received, and a court has banned the return of money.

A few days ago, the Commercial Court in Split adopted a first-instance decision to dismiss a lawsuit by “P.P.K. Nekretnine” from Zagreb (“Prima Property Kroatia Real Estate”, founded by investors from Norway who have been trying to develop a project of luxurious summer resort “St. George’s Bay” on Hvar), which asked the court to confirm the termination of a contract with the Municipality of Sućuraj, and to return to the Norwegians more than 7.2 million kuna plus interest from 2011, reports Slobodna Dalmacija on March 25, 2017.

In April 2015, the Norwegian investors sued the Municipality, claiming that on 22 March 2012 they entered into an agreement to purchase 14,500 square metres of forest and just under 14,000 square metres of vineyards on the basis of a public competition. At the time when the competition was announced, which was in December 2011, the ownership of the land was registered in by Local People’s Committee of Sućuraj.

The lawsuit states that the Municipality sought the registration of property rights in January 2012, claiming that it was a property which, on the day of the entry into force of the Law on Agricultural Land (24 July 1991) and the Law on Forests (16 October 1990), was part of the construction area of ​​the Municipality of Sućuraj and represented a construction plot, and that the property, on the basis of the decision made by the government on 11 December 1996, became the property of the Municipality. The state appealed the decision of the Municipal Court in Stari Grad, and the County Court in Split rejected as unfounded the request of the Municipality to register the land as its property.

Norwegians argued that, because of that decision, it had become evident that the Municipality would not be able to register the ownership of the land, and thus will not be able to transfer ownership rights to them. Therefore, on 20 February 2015 the Norwegian investors sent to the Municipality a letter of termination of agreement and demanded the return of more than seven million kuna, which they paid for the land.

The Municipality of Sućuraj replied that what the parties had agreed was still standing and that the Municipality was complying with all its contractual obligations and continued with the process of registration of the real estate with extraordinary legal remedies. “So, if and when the Constitutional Court decides that the Municipality does not have the right of ownership, only then would we refund the money, and not before, because the parties have agreed so. The sale of the real estate was executed at the request of the plaintiff who sent a written offer to the defendant”, responded the Municipality of Sućuraj.

Judge Ivana Madunić ruled that the termination of the contract was groundless and that the Norwegians did not have the right to terminate the agreement, among other things because the purchase agreement states that, in case of such a situation, the buyer is not allowed to terminate the entire contract, but just has the right to a proportionate reduction in the total purchase price. Since the Court considers that the Municipality meets all its contractual obligations, it rejected the Norwegian request for a refund. The court dismissed as unnecessary all evidence proposed by the P.P.K. Nekretnine’s lawyers.

The current Mayor of Sućuraj Ivan Slavić explained what the verdict means for the Municipality and the future of the 250 million euro project. “I do not want to comment on this first-instance verdict. I can only say that our lawyer did an excellent job. Regardless of this, I want to emphasize that we are still open to cooperation with the investor and that we still want to develop this project. I am more interested to know what happened with the 7.2 million kuna? The vast majority of it was spent on forest paths and spatial plans which we have more than Zagreb. Not a single kuna has been invested in infrastructure projects and it is sad that so much money has ‘disappeared’”, said Slavić.

“Court itself did not enter into the essence of the dispute, but has concluded that not all legal remedies had been exhausted. We had to start the legal proceedings because we could not acquire ownership of the land which is the subject of the contract nor allow the funds paid to the covered by the statute of limitations, which would prevent us from seeking reimbursement through the courts in the future. We will use all legal possibilities in the coming period in order to protect the property and interests of our company. This is just one of many plots of land which are part of the future project. For most other plots, there are proceedings underway to determine ownership between the state, municipality and individual owners, and we hope that they will soon be brought to the end, which would enable the realization of the project”, said P.P.K. Nekretnine in a statement.


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