The Republic of Croatia v The Republic of Serbia

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”).

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:

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:

Article 4(1) provided as follows:

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:

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.

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:

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).

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).

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).

On 5^th August 2008 the Adjudicator gave directions for the determination of preliminary issues, and that hearing took place on 20^th October 2008. There were four preliminary issues, the first three of which were procedural, relating mainly to service, and which were not in the event pursued. The fourth preliminary issue was as follows:

Croatia’s case before the Adjudicator, as reflected in its written Statement of Case dated 25^th February 2008 was, in summary, that it had an interest in the Property, recognised by Articles 3 and 4 of Annex B to the ASI, and because of its status as a successor state to the SFRY, and that the omission of the Property from the list appended to Annex B (relied upon by Serbia’s objection) was of no consequence. This was a sufficient interest for the purposes of the restrictions sought.

The Adjudicator’s negative conclusion on the preliminary issue as to jurisdiction may be summarised (without I hope doing violence to a detailed and closely reasoned written Decision) as follows:

The absence of the Property from the list appended to Annex B to the ASI was fatal to the application (paragraph 38 of the Decision).

Croatia “cannot have acquired on the plane of English domestic law any interest in the Property” either by virtue of the ASI or as successor state to the SFRY. Accordingly, its claim for a restriction was non-justiciable by the English courts (paragraphs 48-50).

Croatia could not therefore demonstrate any sufficient interest in the Property within the meaning of section 43(1)(c) of the LRA, sufficient to confer jurisdiction upon him as Adjudicator to direct the Chief Land Registrar to enter the restrictions sought. Accordingly the discretionary question raised by section 42 of the LRA did not arise (paragraphs 51-2).

Stage (1) of the Adjudicator’s analysis was based upon his construction of the ASI. Stage (2) was based upon his conclusions as to the application of the non-justiciability principle in relation to the transactions of foreign states and unincorporated treaties made between them, and involved a detailed analysis of the AY Bank case, which he regarded as distinguishable. Stage (3) was based upon his conclusion that, although not exhaustive, the list of examples of sufficient interest for the purposes of a restriction provided by Rule 93 of the Land Registration Rules 2003 (“the 2003 Rules”) suggested that nothing short of a private English law right in relation to a registered estate (or claim to such a private right) would be a sufficient interest for the purposes of registering a restriction.

The Adjudicator recorded in passing his understanding that leading counsel for Croatia had conceded at the hearing that there neither was nor could be a claim by Croatia to any form of beneficial entitlement in the Property. Counsel for Serbia on this appeal sought to rely on that supposed concession, and on what they described as the absence of any case to the contrary in Croatia’s Grounds of Appeal. In my judgment, having considered a transcript of the hearing before the Adjudicator, there was no such concession, as eventually Serbia accepted on this appeal. Furthermore, I consider that Croatia’s Grounds of Appeal do sufficiently raise that issue. In any event the issue raises no new issue of fact not deployed before the Adjudicator, and it was not suggested that Serbia would suffer any prejudice if the point was addressed on the appeal.

The provisions of the LRA dealing with restrictions are to be found in sections 40 to 47. Section 40(1) provides that:

Section 41(1) provides that:

Section 42(1) provides as follows:

Section 43(1) provides as follows:

Subject to certain exceptions, section 45(1) requires notice of an application for a restriction under section 43(1) to be given to:

such other persons as rules may provide.”

Section 46(1) gives the court power to require the Registrar to enter a restriction, if it appears that it is necessary or desirable to do so for the purpose of protecting a right or claim in relation to a registered estate or charge.

Rule 93 of the 2003 Rules provides (as contemplated by section 43(2)(c) of the LRA) a lengthy but non-exhaustive list of more than twenty classes of person who are to be regarded as having a sufficient interest to apply for a restriction. They include various classes of persons with beneficial interests or claims thereto in relation to the registered estate, as well as persons who neither have nor claim to have such an interest, such as the applicant for a civil freezing order, persons who have applied for a restraint order under the Terrorism Act 2000 or the Proceeds of Crime Act 2002, and even the International Criminal Court, where it applies for a restriction to give effect to a freezing order under Schedule 6 to the International Criminal Court Act 2001, or to protect an application for a freezing order. It also identifies persons with the benefit of various types of statutory charge, such as the Legal Services Commission and a local authority, pursuant to section 22 of the Health and Social Services and Social Security Adjudications Act 1983.

There is a long-standing principle of English law, inherent in the very nature of the judicial process, that municipal courts do not adjudicate on the transactions of foreign states. Where such issues are raised in private litigation, the court exercises judicial restraint and abstains from deciding the issues raised: see Buttes Gas and Oil Co v. Hammer [1982] AC 888, per Lord Wilberforce at 931 to 933.

There is a closely related principle, namely that the interpretation of treaties to which the United Kingdom is a party, but the terms of which have not either expressly or by reference been incorporated in English domestic law by legislation is not a matter that falls within the interpretative jurisdiction of an English court of law: see British Airways Board v. Laker Airways Ltd [1985] AC 58 at 85-86 per Lord Diplock.

Nonetheless, both principles are subject to exceptions: see generally, Campaign for Nuclear Disarmament v. Prime Minister of the United Kingdom [2002] EWHC 2777 (Admin) at paras 35-6, and JH Rayner (Mincing Lane) Ltd v. DTI [1989] Ch 72 at 163-4 per Kerr LJ; [1990] 2 AC 418 at 510-1 per Lord Oliver. A particular exception is where the transactions of the foreign states in question, or the unincorporated treaty, are relevant to the existence or enforcement of private law rights. Thus, in Republic of Ecuador v. Occidental Exploration and Production Co [2006] QB 432 at 460, Mance LJ giving the judgment of the Court of Appeal said this, at paragraph 37:

The AY Bank case was about the effect of the ASI in resolving disputes between its parties as to their respective private rights in relation to bank balances (that is choses in action) in AY Bank Ltd. Those choses in action were situated in England. Article 5 of Annex C to the ASI determined precisely the respective parties’ interests in such accounts, and at paragraph 50 of his judgment in the AY Bank case (supra), the Chancellor said:

Separately and distinctly, the AY Bank case is authority for a further exception to the non-justiciability principle, to the effect that even where the English courts will not adjudicate upon the merits of a dispute between foreign states, they may nonetheless grant protective measures so as to preserve the status quo pending the outcome of such disputes.

At paragraph 37 the Chancellor recorded the submission of counsel for Serbia and Montenegro in that case, to the effect that an English court would have no alternative to preserving the assets available for distribution in respect of the balance due by the bank to NBY to await the decisions of any relevant distribution committee (prior to the conclusion of the ASI) and the citation in support of that submission of the decision of the Supreme Court of Austria in Republic of Croatia v. GiroCredit Bank AG (1996) 36 ILM 1520 and the French Supreme Court in Federal Republic of Yugoslavia v. Banque Commerciale pour L’Europe du Nord at paragraph 54. He continued:

Customary international law is part of the common law of England if, but only if, it is reflected in a general and consistent practice of states which has come to be recognised as conforming to a legal obligation: see Sepet v. Home Secretary [2003] 1 WLR 856 at 876, per Lord Hoffmann at paragraph 40. For present purposes, the question is whether there is any sufficiently established consistent practice concerning the succession to the property of a dismembered state, sufficient for it to have become part of English common law.

Mr Crawford SC for Croatia drew my attention to Article 18(1)(b) of the Vienna Convention on State Succession in respect of Property Archives and Debts 1983 which, he submitted, reflected customary international law on this point. It is in the following terms:

The Vienna Convention never came into force because, whereas Article 50 provided for it to come into force following ratification by fifteen states, it has yet to be ratified by more than seven states, of which incidentally Croatia is one, having ratified on 11^th April 1994. The SFRY had signed the Convention in October 1983, but never ratified it. I was told that Serbia acceded to the Convention in March 2001 in succession to the SFRY, but never ratified it.

The Report of the International Law Commission on the work of its 33^rd session commenting on the then draft of the Vienna Convention, suggests that what is now Article 18 (then Article 17) represented then current academic opinion. Nonetheless, there is in my judgment insufficient evidence to justify a conclusion that a rule as to succession to the property of a dismembered state (however sensible) has yet become a sufficiently general or consistent practice among states to qualify as customary international law for the purposes of recognition by English common law.

Of greater relevance is the fact that, when the parties to this appeal were before the Chancellor at the hearing of the AY Bank case in April 2006, they stated that it was (to use the words of the Chancellor in paragraph 4 of his judgment):

Mr Margolin hinted at two alternative possibilities as candidates for succession to the SFRY’s interest as registered leasehold owner of the Property, namely the Crown on the basis that the interest became bona vacantia, and the reversioner under the long leasehold interest, on the basis that the leasehold interest determined upon the dismemberment of the SFRY. He addressed those possibilities with no enthusiasm for either of them, and did not adopt either of them as Serbia’s case. Neither of the supposed candidates have ever asserted any such interest.

I remind myself that the question before me is not whether the English court should determine any issue between Croatia and Serbia as to the beneficial ownership of the Property or, for that purpose, construe the ASI. The question is not even whether the English court on an original application should grant protective measures designed to preserve the status quo while those issues are fought out, agreed or determined between the successor states pursuant to the provisions of the ASI. The question is whether Croatia has a sufficient interest in obtaining restrictions substantially in Forms A and II to enable the Registrar if he thinks it necessary or desirable to do so, to enter such restrictions on the registered leasehold title to the Property or, in the event of dispute, to give the Adjudicator jurisdiction to direct him to do so. The issue is therefore ultimately one of the construction of the statutory scheme constituted by the LRA and the 2003 Rules, and its application to a highly unusual fact situation. Put the other way round, the question is whether on the facts, Croatia has a right or claim in relation to the registered leasehold interest in the Property (within the meaning of section 42(1)(c)) the protection of which gives it a sufficient interest in the entry of restrictions of the types sought, within the meaning of section 43(1)(c), so as to give the Adjudicator jurisdiction to decide whether such entries are necessary or desirable.

It is convenient to identify the relevant facts first. For that purpose the court is entitled, without infringing the non-justiciability principle, to have regard to the existence of the ASI as a relevant fact, to the extent of any apparent agreement between the parties as to the consequences of the dismemberment of the SFRY, and to the ambit of any dispute between the parties as to those consequences, for the purposes of establishing whether Croatia has any qualifying claim relating to the registered leasehold interest in the Property.

In my judgment the relevant facts are as follows. First, at the time of the making of the ASI both Croatia and the FRY (of which Serbia formed a constituent part) were in apparent agreement that the only candidates for succession to the property of the former SFRY were the five successor states. Secondly, they joined in the making of the ASI as a means of finally settling all issues as to the succession to (inter alia) the property of the SFRY, including in that agreement guidelines and machinery designed to lead to a final determination of all succession issues between them. Thirdly, Serbia and Croatia remained of the view that the successor states were the only candidates to succeed to the property of the SFRY as late as April 2006, and nothing produced or said to me during this hearing on their behalf suggests that either of them has since departed from that view.

Fourthly, the Property was, by common consent, part of the property of the SFRY at the moment of its dismemberment. Fifthly, there are disputes between Croatia and Serbia as to whether the ASI makes express or implied provision for determination of the ownership of the Property as between the successor states, and if so, which are the relevant provisions of the ASI and what is their effect. It is however common ground that the provisions and machinery put in place by the ASI have yet to give rise to a determination as to the ownership of the Property and that, if any such determination is made, the Property may be directed to be distributed to any one of the successor states, so that either Croatia or Serbia may receive the whole or none of the Property.

I consider that it follows inevitably from those facts that Croatia (and also Serbia for that matter) have two types of claim in relation to the Property. The first is a claim, pending any determination as to the distribution of the Property in specie pursuant to the ASI, to a beneficial share in the Property arising from their common understanding that the only candidates for ownership of the property of the SFRY upon its dismemberment are the successor States. The second is a claim to full beneficial ownership of the Property, capable of being pursued by each of them pursuant to the ASI, which may or may not succeed. In my judgment it involves no breach of the non-justiciability principle for me to conclude that both those claims satisfy the threshold test of reasonableness, or arguability, such that they ought not to be regarded as fanciful.

In reaching those conclusions I have not ignored Serbia’s submission (advanced successfully before the Adjudicator) that the omission of the Property from the list appended to Annex B to the ASI is fatal to any claim under the ASI by Croatia. In my judgment it was wrong, and a breach of the non-justiciability principle, for the Adjudicator to resolve that question of construction of the ASI in Serbia’s favour. It is sufficient for me to conclude, as I do, that the contrary is reasonably arguable, both because of the obligation of the Joint Committee under Article 5(a) of Annex B to verify and if necessary amend the List, and because of the arguably catch-all provisions of Annex F, read in conjunction with Article 7 of, and the recitals to, the main Agreement.

Nor have I ignored Serbia’s submission, advanced for the first time on this appeal, that the Property fell outside the ASI because it was a military property within the meaning of Article 5 of Annex A to the ASI, or property of the former Yugoslav National Army used for civilian purposes within the meaning of Article 4(2) of Annex A. Again, these are arguments which may or may not ultimately prevail, but they come nowhere near depriving Croatia’s claims of the quality of being reasonably arguable in themselves. They are matters to be decided pursuant to the provisions of the ASI and are therefore non-justiciable in this court.

I turn therefore to the question of construction of the LRA and the 1993 Rules, namely whether, having those two arguable claims in relation to the Property, Croatia has a sufficient interest in obtaining entry of the restrictions which it seeks, or either of them.

Although the LRA contains no express definition of “sufficient interest” for the purposes of section 43(1)(c), it was common ground before me that recourse could properly be had to the purposes for which restrictions could be entered, as set out in section 42(1)(a) to (c), and to the examples of sufficient interest set out in Rule 93 of the 2003 Rules, as contemplated by the rule making power set out in section 43(2)(c). It was also common ground that the question whether any postulated interest was a “sufficient interest” was not to be considered in the abstract, but rather by reference to the specific restrictions sought.

Section 42(1)(c) identifies as a relevant purpose for the entry of restrictions:

Study of Rule 93 yields the following further illumination. First, Rule 93 clearly demonstrates that a person may have a sufficient interest in obtaining the entry of a restriction without having, or even claiming, a proprietary interest in the registered estate. Persons falling with classes (d) to (i), (l), (m), (r), (s), (u) and (v) would not need to demonstrate any proprietary interest in the registered estate.

Secondly, some of the classes included within Rule 93 suggest a very tenuous connection between the applicant’s interest and the registered estate, of a type much less direct or immediate than that claimed by Croatia. For example, an applicant for a freezing order under class (i) need have nothing more than a purely monetary claim against the registered proprietor, having nothing whatever to do with the registered estate.

Thirdly, although most of the classes in Rule 93 which confer a sufficient interest on a person with a claim relate to claims capable of being adjudicated by the English courts, they do not all do so. Class (r) reflects provisions in the International Criminal Court Act 2001 whereby the Secretary of State may appoint a person to seek a freezing order on behalf of the International Criminal Court. Nonetheless the merits of the underlying dispute (namely whether the defendant has committed the alleged crime, and whether he has possession of proceeds of that crime which ought to be forfeited) fall within the exclusive competence of the International Criminal Court itself.

Finally, class (d) is of particular assistance. It identifies as a person with a sufficient interest:

Class (d) shows that where a person is interested in the outcome of a process of administration of the assets of a deceased person, regardless whether that interest relates directly to the registered estate, he has a sufficient interest to obtain the entry of a restriction designed to ensure that the administration of those assets is carried out in accordance with any relevant restrictions (for that purpose a restriction of the type referred to in section 8 of the Act of 1996, which relates to the need for trustees or personal representatives to obtain consent to the exercise of particular powers). Class (d) therefore affords a loose parallel or analogy with Croatia’s interest (shared with the other successor States) in having the processes of the ASI duly carried into effect. Those processes at least arguably include an obligation under Article 2 (reinforced by Article 7 of Annex B) upon successor States with the power to do so, to take necessary measures to prevent loss, damage or destruction to the property and assets of the SFRY in which, in accordance with the provisions of the ASI, one or more of the successor States have an interest. That obligation would at least arguably require a state such as Serbia in de facto possession of immovable property of the former SFRY, such as the Property in the present case, to do nothing to bring about an alienation of that property otherwise than in accordance with the principles and machinery of the ASI.

In my judgment, the claims which I have identified that Croatia has in relation to the Property, together with its status as a party to the ASI, give it a sufficient interest in the entry of a restriction in either or both of Form A and Form II, for the purpose of affording jurisdiction to the Registrar to enter such restrictions, if thought necessary or desirable pursuant to section 42(1) of the LRA, and therefore to afford jurisdiction to the Adjudicator, in the event of a dispute, to direct him to do so.

I consider that Croatia has a claim to a present interest in the Property, a claim to have the Property distributed to it in specie pursuant to the ASI, and an interest in having the principles and machinery of the ASI carried into effect. The combination of those claims and interest gives rise to a sufficient interest in the making of the entry or entries requested for the purposes of section 43(1)(c). My reasons for that conclusion will largely be apparent from the foregoing analysis, but I would emphasise the following points.

First, it is a weighty consideration against the conclusion which I have reached that the claims of Croatia in relation to the Property which I have identified are probably not justiciable by the English court, arising as they do out of the transactions of sovereign states and from an unincorporated treaty to which the United Kingdom is not even a party. I say “probably” because it is unnecessary for me finally to conclude to that effect, and Croatia wishes to keep the position open, in case the ASI procedures ultimately fail to lead to a resolution of the present impasse. I proceed therefore on the assumption that the claims are non-justiciable in England.

Nonetheless the claims relate to an interest in or ownership of land situated in England, title to which is identified and guaranteed by the statutory system of land registration, which includes a system of limited protection by restriction designed to assist persons seeking to protect rights or claims in relation to registered estates. This is an equally powerful factor suggesting that arguable (i.e. non-fanciful) claims in relation to the Property ought in principle to be capable of being protected by restriction, even if they have to be determined elsewhere than in the English courts.

I invited submissions, by way of analogy, in relation to a claim by a spouse in a French divorce to have an English matrimonial home (registered in the other spouse’s sole name) transferred to her by way of property adjustment order, and to a claim to an interest in English registered land being pursued in a foreign arbitration. In neither example was any cogent submission made that preservation of the status quo by entry of an appropriate restriction would be unavailable.

Secondly, I find it unreal to suppose (as submitted by Serbia) that if for example the workings of the ASI led to a distribution of the Property to Croatia or, for that matter, to any other successor State including Serbia itself, the Land Registry would decline to accede to an application to register the successful claimant as proprietor of the Property in succession to the SFRY, merely on the ground that the distribution had occurred pursuant to the workings of an unincorporated treaty made between sovereign states. It is noteworthy in that context that Bosnia and Herzegovina (a single successor state) was allocated the London Embassy of the former SFRY by Article 1 of Annex B to the ASI, and was in fact registered as the freehold proprietor of it, on 11^th February 2004, albeit subject to a restriction which prohibits the registration of a disposition otherwise than by an order of the Registrar.

I have already referred to the AY Bank case in which, at paragraphs 50 and 54, the Chancellor said, in relation to a provision of the ASI which had by the time of the hearing before him determined what were to be the respective interests of the successor States in relevant foreign bank accounts, that the ASI both resolved those matters in a manner capable of being recognised by English law, and formed an essential element in a successor state’s proof of title to such property. The same analysis would apply, a fortiori, to any decision reached pursuant to the principles and machinery of the ASI in relation to the distribution in specie of the Property to Croatia, or to any other successor state. That decision would form a part of the successful state’s title, or rather, a part of its evidence in seeking to be registered in succession to the SFRY as proprietor of the registered leasehold.

For as long as there is a reasonable prospect that the principles and machinery of the ASI may lead to a determination that the Property ought to be distributed to Croatia, I see no reason why Croatia’s claim to that effect should not be protected by a restriction. In the meantime, for as long as Croatia and Serbia continue to be of the common view (as reflected in the ASI and as stated to the Chancellor in the AY Bank case) that the successor states are, between them, entitled to succeed to the property of the former SFRY, I see no reason why Croatia’s claim to be, therefore, a joint beneficial owner of the Property, pending any determination to the contrary under the ASI, should not also be a claim meriting protection by a restriction, so that Croatia has a sufficient interest in the entry of a suitable restriction for that purpose.

Finally, while I recognise that a strict application of the non-justiciability principle, and of the rule that an unincorporated treaty has no consequence in English law, would support Serbia’s submissions and the Adjudicator’s conclusions, it seems to me that English law would fly in the face of reality if it refused to recognise an agreement between successor states as to the devolution among them of property of their dismembered predecessor merely because that agreement was contained in an international treaty, and because the parties to it were sovereign states. Speaking generally, English law readily takes note of any agreement between co-owners of real property as to the amount or proportion of their respective beneficial interest in that property. To apply the non-justiciability principle in a way which would preclude English law from recognising or taking account of such an agreement, whether stated in the ASI or determined as a result of the agreed principles and machinery of the ASI, would in my judgment amount to a slavish application of the rule without regard either to its proper purpose, or to the exceptions to it which have been identified, both in the Republic of Ecuador case and in the AY Bank case, as I have described.

The contrary view formed a main plank in the reasoning of the Adjudicator which led him to direct the cancellation of Croatia’s application. For the reasons which I have given his decision that he had no jurisdiction to direct the Registrar to enter the restrictions requested was in my judgment therefore wrong, and this appeal is therefore allowed.

I should add that in paragraphs 52 and 53 of his Decision, the Adjudicator addressed what he had earlier described as the second stage of the analysis, namely whether if Croatia had a sufficient interest in the making of the application he should as a matter of discretion (applying the ‘necessary or desirable’ test in section 42(1)) direct the Registrar to enter the restriction. In this respect, as was common ground before me, the Adjudicator went beyond determination of the preliminary issues which he had identified as the subject matter of the hearing before him. Furthermore, his reason for a negative conclusion on that discretionary question was, again, his view that Croatia’s claims were not capable of being recognised in the private domestic law of England and Wales, so far as the Property was concerned. It will be apparent from the foregoing that I consider that the Adjudicator’s opinion to that effect was, although understandable, wrong. It follows that the question whether (on the assumption that the matter remains in dispute) the Registrar ought to be directed to enter one or more of the restrictions sought should be remitted to the Adjudicator for reconsideration, after any necessary directions for evidence in relation to the question of necessity or desirability, and in accordance with the legal analysis to be found in this judgment.

If the parties had both consented to my dealing with that question without further expenditure of time and expense I would have done so, but the requisite consent was not forthcoming from Serbia.