The Republic of Croatia v The Republic of Serbia

For the purposes of an application for a restriction, a claimant need not establish a proprietary interest in the registered estate. A sufficient interest may arise from an arguable right or claim in relation to the estate, together with an interest in preserving an agreed process for determining ownership. The English court may recognise the existence and arguability of rights arising from an unincorporated international agreement without adjudicating upon the merits of disputes between foreign states. Non-justiciability does not prevent protective measures designed to preserve the status quo. Whether a restriction is necessary or desirable is a separate discretionary question from whether the applicant has a sufficient interest.

Croatia appealed against the Adjudicator to HM Land Registry’s order directing cancellation of its application for restrictions over a registered leasehold property formerly owned by the Socialist Federal Republic of Yugoslavia. Croatia relied on its status as a successor state and on the Agreement on Succession Issues, which established machinery for distributing the former state’s property among the successor states.

The Adjudicator held that the property’s omission from an annex to the agreement was fatal, that Croatia could acquire no interest recognised by English domestic law, and that Croatia therefore lacked a sufficient interest under the Land Registration Act 2002. The central issue was whether Croatia had an arguable right or claim in relation to the registered estate sufficient to confer jurisdiction to consider restrictions.

1. Appeal allowed. The Adjudicator had jurisdiction to consider Croatia’s application. The question was not whether the English court could determine beneficial ownership or construe the Agreement on Succession Issues on the merits, but whether Croatia had a sufficient interest under sections 42 and 43 of the Land Registration Act 2002.
2. The non-justiciability principle prevents municipal courts from adjudicating upon transactions of foreign states. The related rule concerning unincorporated treaties also applies. Those principles have exceptions where the transactions or treaty are relevant to private-law rights, or where protective measures are sought to preserve the status quo without determining the merits.
3. Croatia had two reasonably arguable claims: a pending claim to a beneficial share in the property arising from the successor states’ common understanding that they were collectively entitled to succeed to the former state’s property, and a claim to full beneficial ownership through the agreement’s distribution machinery. Resolving whether the property fell within particular annexes or provisions of the agreement was non-justiciable, but recognising the arguability of those claims was not.
4. “Sufficient interest” under section 43(1)(c) is not confined to a proprietary interest. Section 42(1)(c) refers to protecting a right or claim “in relation to” a registered estate. Rule 93 of the Land Registration Rules 2003 confirms that persons with no proprietary claim, and persons whose underlying disputes are for determination elsewhere, may nevertheless have a sufficient interest.
5. Croatia’s claims, its status as a party to the agreement, and its interest in preserving the agreement’s machinery together gave it a sufficient interest in restrictions in Form A or Form II. The question whether entry was necessary or desirable under section 42(1) was remitted to the Adjudicator for reconsideration.

• High Court (Chancery Division): appeal from the Adjudicator to HM Land Registry allowed. The question whether the restrictions were necessary or desirable was remitted for reconsideration.