Polly Peck property proceeds probe

Polly Peck is challenging a decision by Mr Justice Rattee to allow four companies to bring proceedings against it, reports Roger Pearson

Judgment is now pending in a Court of Appeal case in which the right of four Greek Cypriot companies to pursue claims against the administrators of Polly Peck International (PPI) in respect of property in the unrecognised Turkish Republic of Northern Cyprus is under challenge.

Marangos Hotel Co, Pharos Estates, Sedigep and Cyprus Ports Authority were given leave in the High Court by Mr Justice Rattee to bring proceedings against PPI together with the administrators of PPI and the supervisors of a Scheme of Arrangement which had previously been approved by the court in relation to PPI under s.425 of the Companies Act 1985.

The claims the latest in a long line of litigation arising from the collapse of Asil Nadir's Polly Peck empire are an attempt to recover part of the proceeds of sale by the administrators of PPI holdings of shares in various subsidiaries.

The applicants claim they owned property in Cyprus now situated in the Turkish Republic of Northern Cyprus and that they were dispossessed in 1974 after the Turkish invasion of the northern part of the island.

They allege that certain PPI companies have occupied and exploited that property. Shares in PPI companies Voyager Mediterranean, Uni-Pac Industries and Spiel Gerate GmbH were sold in March 1995 by PPI and the administrators.

In the proceedings for which Mr Justice Rattee gave leave, the four companies seek declarations that all or part of the proceeds of sale of the shares in the PPI companies should be held on constructive trust and paid to them.

However, in the pending case PPI has been trying to persuade Lords Justices Nourse, Potter and Mummery, that Mr Justice Rattee was wrong to give leave for proceedings to be brought against it.

It maintains that the English courts have no jurisdiction to hear the claim and that Mr Justice Rattee was wrong to conclude that the applicants had a seriously arguable claim.