Individual Application

 The Facts

The Ministry of Culture and Tourism (“the Administration”) granted a preliminary permission to the applicant company (“the Company”) for the realisation of a daily-use tourism facility project on the impugned immovable property, which subsequently resulted in the allocation of the property to the Company. Upon the Company’s payment of the first annual fee for the right of construction, a certificate of delivery was issued confirming that the property had been handed over to the Company’s authorised representative to be used during the allocation period and returned to the Administration upon its expiry.

Later, due to the cancellation of the zoning plans, the Land Allocation Commission of the Ministry of Culture and Tourism suspended the running of the final allocation period. When the Commission subsequently decided to resume the running of the period, the Administration requested the submission of an updated letter of undertaking and guarantee. As the Company failed to provide the relevant documents, the Administration cancelled the final allocation made on behalf of the former and recorded the Company’s letter of guarantee as revenue for the Treasury, stating that the Company had breached the allocation conditions by failing to submit the letter of undertaking and guarantee.

The applicant brought an action before the administrative court seeking the annulment of the administrative act cancelling the final allocation process, after which the incumbent court annulled the impugned act. Upon appeal by the Administration, the relevant Chamber of the Council of State (“the Chamber”) quashed the decision and dismissed the case.

The Applicant’s Allegations

The applicant Company claimed that its right to property had been violated due to the cancellation of the final allocation process of the property designated for the construction of a tourism facility.

The Court’s Assessment

In the present case, the Chamber found the cancellation of the final allocation process lawful since the Company had failed to submit the undertaking and guarantee letter within the prescribed period, in contravention of Article 17 § 7 of the Regulation on the Allocation of Public Properties for Tourism Investments (“the Regulation”). Article 8 of the Tourism Encouragement Law no. 2634 forming the legal basis of the Regulation governs the allocation of public properties for tourism purposes. Considering the clarity, accessibility, and foreseeability of the applicable statutory provisions, it has been observed that the interference with the applicant’s right to property had a legal basis.

It is evident that in the present case, the allocation of the immovable property for tourism purposes, the control of the said allocation process, and its cancellation in the event of non-compliance with the necessary conditions served a legitimate public interest.

Furthermore, there is no doubt that the impugned cancellation of the allocation process constituted an appropriate means for contributing to the development of the tourism sector by establishing a tourism facility on the property as soon as possible, thus contributing to the country’s economy.

Therefore, having regard to the grounds for the cancellation of the allocation process conducted for the construction of a tourism facility, namely, the Company’s failure to submit the undertaking required to ensure not only the fulfilment of the investor’s obligations but also the completion of the facility within the prescribed time and standards, as well as the updated guarantee calculated on the current value, and considering the discretionary powers of the public authorities in this regard, the Court has found no reason, in the particular circumstances of the case, to depart from the trial courts’ conclusion that the impugned interference had been necessary.

In assessing the proportionality of the interference in the present case, the key criterion to be applied is the principle of commensurateness. The applicant Company had been requested to update the enjoyment fee and the letter of guarantee due to the suspension of the final allocation period. It has been understood that the purpose of suspending the allocation period is to preserve the contract and the intentions of the parties, as well as to protect their respective rights, in the face of delays arising from force majeure or the practices of public authorities. Indeed, pursuant to Article 17 § 7 of the Regulation, the period elapsing between the date on which the final allocation period is suspended and the date on which it will continue to run shall be added to the allocation period. Thus, after the suspension of the allocation period, the entitled party will be able to enjoy the immovable property during the allocation period, and the premature termination of the allocation period without the proper use of the property will thereby be prevented. In addition, the requirement to update the enjoyment fee and the letter of guarantee upon the suspension of the allocation period may serve the purpose of striking a fair balance between individual interests and the public interest.

In view of the assessments above, the Court has concluded that requiring the applicant to update the guarantee and undertaking following the continuation of the final allocation period, after the suspension of the said period upon the applicant’s request, did not impose an excessive burden on it. Thus, the fair balance between the public interest and the individual interest in protecting the right to property was not upset to the detriment of the applicant.

Consequently, the Court has found no violation of the right to property.