Developer Griffin Group has notified the Prime Minister’s Chancellery that it is seeking compensation from the State Treasury for the expropriation of a plot of land located near Łazienki Park in the center of Warsaw.
Earlier this year a district court ordered Griffin to return the plot to the City of Warsaw, but the case is currently awaiting a verdict from an appeals court. At the same time, Griffin has said it will attempt to solve the matter of compensation amicably with the Treasury.
Should that fail however, Griffin has said it is prepared to seek the help of an international arbitration tribunal to mediate a solution. The company is citing international law protecting investments from confiscation by public authorities.
According to the provisions of an agreement between Luxembourg (where Griffin is registered) and Poland, “investments are protected against confiscation and other measures of direct or indirect expropriation,” said Rafał Rapala, the company’s legal representative. If an investment is expropriated, “the investor should be given compensation equal to the real value of the project,” he added.
The plot had previously been owned by Parkview Terrace, a developer who ob-tained a loan from Griffin Group that was secured by a mortgage on the plot. When, in 2012, Parkview Terrace stopped paying installments on the loan, Griffin acquired the right to perpetual usufruct on the property.
Perpetual usufruct gives an investor nearly full rights to a property for an extended period of time, but keeps the actual ownership of the property in someone else’s hands – usually the state’s.
Parkview Terrace had earlier demolished a building previously located on the property. That demolition was surrounded by controversy, as the building was under the protection of the curator of historic buildings.
The district court ruled that Parkview Terrace had removed the building illegally and that it had also failed to complete its investments on time, thereby violating the property deed. As a result, the court ruled that the perpetual usufruct agreement should be terminated, and ownership returned to the City of Warsaw.
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