“Sydney District” in Karabakh: Do Illegal Settlers Have Property Rights under the European Convention on Human Rights?

“Sydney District” in Karabakh: Do Illegal Settlers Have Property Rights under the European Convention on Human Rights?

[Nurlan Mustafayev is a counsel on international legal affairs at the State Oil Company of the Republic of Azerbaijan, an instructor on public international law, and a pro bono advisor to Azerbaijani refugees on claims before the European Court of Human Rights.]

Azerbaijan’s liberation of its territories from Armenia’s three-decade-long occupation in late 2020 created a new legal situation on the ground. First, according to the trilateral Armistice Agreement, Armenia had to withdraw its army and hand over the previously occupied territories to Azerbaijan; second, together with Armenia’s occupation force, thousands of Armenian settlers had to move out as well. Public attention was recently focused on the handover of the district of Lachin and the Zabukh village and the relocation of illegal settlers. The property right of almost a million ethnic Azerbaijanis and thousands of ethnic Armenians in Azerbaijan’s Karabakh region is one of the central issues in the ongoing Azerbaijan-Armenia inter-state cases before the European Court of Human Rights (ECtHR). The question is whether the ECtHR should apply the same property standards espoused in Chiragov v. Armenia and Sargsyan v. Azerbaijan or chart a new course toward illegal settlers in the formerly Armenia-occupied territories under Protocol No. 1 of the European Convention on Human Rights.

Ethnic Transformation of Occupied Territories 

Following Armenia’s military victory in the 1991-1994 war and the subsequent occupation of Azerbaijan’s Upper Karabakh and adjacent seven districts (Occupied Territories), it started an active settlement policy to settle ethnic Armenians from Armenia proper and the Middle East in the Occupied Territories. During 1994-2004 alone, Armenia had settled tens of thousands of people to substitute for 750,000 Azerbaijanis who were displaced due to the occupation and left behind more than 150,000 homes, extensive civilian infrastructure, and cultural property

In 2001, Armenia formally announced a 10-year Settlement Program, with ‘demographic growth and repopulation’ as a policy goal, which envisaged increasing the settler population up to 300,000 by 2010. It also defined the ‘strategic areas’ for settlements and reorganized the Occupied Territories. Armenian leaders publicly called the Occupied Territories ‘liberated,’ encouraging almost twenty thousand people from Armenia and abroad to settle there in the initial stage. 

According to the International Crisis Group, Armenia actively encouraged “settlement” by ethnic Armenians by offering numerous incentives. It included the measures such as free housing, social infrastructure, inexpensive or free utilities, money, livestock, tax exemptions, newly built houses, plots of land, and advantageous loans. During the initial phases, it envisaged the building of 10,000 apartments, 200 schools, clinics, irrigation canals, and roads worth about $120 million US dollars. Thousands of settlers were brought from Armenia and the Middle East, such as Lebanon and Syria, to Azerbaijan’s Jabrayil, Zengilan, Fuzuli, Gubadli, Lachin, Kalbajar, and Agdam districts under then Armenia’s control. The OSCE Minsk Group Co-Chairs – the international mediator group – even warned in 2005 that settlement by Armenians “could lead to a fait accompli that would seriously complicate the peace process.”

The Role of NGOs and Private Organizations in Illegal Settlement Projects   

According to independent investigative reports, from 1993-2020, numerous Armenian foreign diaspora foundations also played a significant role in the illegal settlement projects, including Hayastan All-Armenian Foundation, Tufenkian Foundation, Armenian General Benevolent Union, Armenian Revolutionary Federation, Artsakh Roots Investment, etc. These foundations spent hundreds of millions of US dollars to support the Settlement Program by building and financing constructions, housing, roads, utilities, etc., for the settlers. For instance, the Hayastan Fund, supervised by senior Armenian officials, claims to spend over $370 million in Armenia and the Occupied Territories to finance settlement projects. Arguably, the existing data suggest that until 2020, Armenia settled about 40,000-50,000 ethnic Armenians in the Occupied Territories,  falling short of reaching a target of 300,000 as set out in its settlement policy. 

An example of this ethnic transformation policy is the so-called ‘Sydney district’ in Azerbaijan’s Kalbajar district, built and financed by Australian-Armenian organizations and the Aghavno settlement in the Zabukh village, settled mainly by Syrian and Lebanese Armenians. Many settlers burned the houses belonging to the previous Azerbaijani residents when they left the district of Kalbajar and Lachin in late 2020. 

In its ECtHR application, Armenia argues that the property and infrastructure built in the Occupied Territories, including in settlements, by the Armenian government, persons, companies, and diaspora organizations fall under the protection of Protocol No. 1 of the European Convention on Human Rights, which specifically governs property rights. Thus, these inter-State cases raise an important legal question of whether Protocol No. 1 protects the “possessions” acquired, obtained or built in occupied territories of a foreign country in breach of international law. In light of the Russian invasion of Ukraine, it raises significant legal issues regarding the right to property, damages and reparations in post-conflict situations in international law and among the Council of Europe member states.  

Hard Cases Make Bad Law 

Justice Holmes’s famous aphorism that “hard cases make bad law” is very relevant to the Azerbaijan-Armenia cases. The longevity and complexity of this conflict have led the ECtHR to make ‘bad law’ in the past, as exemplified by its landmark judgments in the cases of Chiragov and Others v. Armenia and Sargsyan v. Azerbaijan decided in 2015 (partly discussed herehere, here). While the ECtHR recognized Armenia’s effective control over the Occupied Territories, the remedies and symbolic compensation it awarded to the victims did not match the nature, severity, and scale of human rights violations in the Occupied Territories.  

One of the reasons for this unfair outcome was the ECtHR failure to differentiate between human rights violations under military occupation from civilian conditions.  For instance, the situation where a foreign power militarily occupies the territory of another state by displacing and appropriating the refugees’ properties en masse is entirely different from the legitimate civilian government’s requisitioning of citizens’ or foreigners’ properties. The outright illegality of military occupation and the systematic and massive scale of human rights violations in this case makes such comparison unbearable. Second, the lack of legitimate public purpose in massive property rights violations. Thus, the compensation awarded to the injured persons cannot be the same in these two different scenarios. Mainly due to its doctrinal rigidity and high evidentiary standards, the ECtHR failed to separate these two situations, which resulted in the abdication of its judicial function to provide effective remedies to almost a million refugees. 

Second, in 2017, the ECtHR issued just-satisfaction judgments in the cases of Chiragov and Sargsyan, awarding a symbolic 5,000 euros for ‘certain’ pecuniary losses and moral damage for almost 30 years of continuous violation of the European Convention. As a result of a symbolic compensation, Armenia, as the occupying state that violated the European Convention and jus cogens norms of international law for almost 30 years, escaped responsibility to pay full reparations for massive property rights violations. Treating these two incomparable situations the same, the ECtHR has created a slippery slope from which it has not extracted itself so far. For instance, this bad law also slipped into the Georgia v. Russia (I) case resulting in awarding limited damages to Georgia’s citizens despite Russia’s prolonged occupation of Georgia and massive violation of human rights. Now, the ECtHR is at the crossroads to make ‘good law’ and apply the European Convention in an effective way to deal with the consequences of Armenia’s three-decade-long military occupation.  

Ex Turpi Causa Non Oritur Actio

Does Azerbaijan have positive obligations to protect and compensate for the “loss” of “property rights”of illegal settlers, including private corporations, after liberating the formerly Occupied Territories? Notably, neither Protocol No. 1 nor the ECtHR’s case-law provides adequate guidance. Arguably, the drafters of the European Convention did not envisage a possibility of prolonged military occupation and illegal settlement activities by one Council of Europe country in the territory of the other member. The ECtHR faces this exact question in the pending Azerbaijan-Armenia case

There are two categories of residents in Azerbaijan’s Karabakh region: (i) ethnic Armenian residents who or whose family lived in Karabakh before 1991, (ii) settlers who were transferred by Armenia to the Occupied Territories and (iii) ethnic Azerbaijani former residents who were ethnically cleansed from the areas after the First Karabakh War in 1991-1994. While the property rights of the legitimate residents in Karabakh are protected under the European Convention, the application of the same property standards to settlers appears questionable at best.  

Considering the lack of solid normative basis on settlers’ purported property rights, the norms of international humanitarian law and the laws of armed conflicts can guide the ECtHR in such instances. For instance, Article 49 (6) of the Fourth Geneva Convention defines illegal settlement activity as a ‘war crime’:  

“The Occupying Power shall not deport or transfer parts of its own civilian population into the territory it occupies.”

The Rome Statute of the International Criminal Court reflects the same position as its Article 8 (2) (b) (viii) expressly declares such illicit settlement activities as a war crime. These provisions  prohibit “direct” and “indirect” settlement activities in occupied territories, which are binding on Armenia, as the occupying state, under international customary. However, integrating these principles into Protocol No. 1 is not an easy task as it involves determining competing claims to property, the lack of property ownership documents, application of various laws, etc. 

Under Article 1 of Protocol No. 1, the concept of “possessions” is an autonomous one, covering “existing possessions” (immovable and movable property and other proprietary interests) over which a victim has a “legitimate expectation (p.7). Thus, these various elements, including the prohibitions of international law on illegal settlements, will be crucial in interpreting Protocol No. 1 regarding illegal settlers in the context of the ongoing Azerbaijan-Armenia cases. 

First, the illegal nature of settlements under international law calls into question any claims about settlers’ ‘property rights’ by definition. In fact, Armenia, as the occupying State, had a negative obligation not to move a part of its citizens and people to the Occupied Territories and a positive obligation to prevent such activities. Evidently, Armenia failed on both accounts. Settling one’s population in occupied territories  to change the local demographic, ethnic, and cultural make-up amounts to war crimes and ‘transformative occupation,’ as per definition of the International Red Cross.   The ECtHR should integrate the prohibitions of custormary international law on illegal settlements as exceptions from Article 1 of Protocol No. 1. in the ongoing Azerbaijan-Armenia case. 

Second, Armenia must identify and establish the “precise nature and entitlement” of illegal settlers’ purported property rights under the national legal system of Azerbaijan (Dobrowolski and Others v. Poland, § 28). It will be a notable legal development considering that Armenia tends to deny Karabakh and surrounding regions to be the sovereign parts of Azerbaijan, calling the formerly Occupied Territories as “Artsakh Republic” or “Nagorno-Karabakh Republic.” .

It will be challenging at several levels under the European Convention and the ECtHR’s ‘precedents.’ The reality is that illegal Armenian settlers were moved to the areas in Karabakh previously inhabited by ethnic Azerbaijanis who were displaced en masse, leaving their lands and houses behind in the early 1990s. The Armenian authorities in the occupied territories enacted numerous “laws” that purported to divest Azerbaijanis of their titles to land and allocate their property in favor of the settlers. In the Chiragov case, for example, Armenia stated, the applicants’ alleged property had been allocated to other individuals [settlers], with their names recorded on the land register in accordance with the laws. (§§ 79-80). Azerbaijan’s law, in particular, the Housing Code and the Civil Code do not recognize any legal title to illegally acquired housing. In this context, the “entitlement” of illegal settlers to their “existing possessions” would be materially questionable in fact and law under the European Convention. 

Third, many purported infrastructures in the Occupied Territories, such as dams, power stations, roads, etc., were undertaken to keep the whole illegal settlement enterprises sustainable and were carried out without the consent of Azerbaijan.   

Fourth, the ECtHR’s interpretation of “legitimate expectations” in the context of illegal settlement is another area of contention. Could illegal settlers have  “legitimate expectations” that the Azerbaijani government would recognize their “property rights” after liberating the Occupied Territories? For an “expectation” to be “legitimate,” it must be of a nature more concrete than a “mere hope” and be based on a legal provision or a legal act, such as a judicial decision, bearing on the property interest in question (Kopecký v. Slovakia, §§ 49-50). Thus, interpreting “legitimate expectations” in this case broadly would be challenging in the face of Azerbaijan consistent and public protests against Armenia’s illegal settlement policies in the past. It was historically in the public knowledge that a million Azerbaijani IDPs would be returned to the formerly Armenia-occupied territories in any final peace deal..   


Claims for recognition of illegal settlers’ “property rights” should also be assessed in light of the equitable principles of law and the European public order. Occupying state that committed international war crimes, for example, by implementing illegal settlements, should not benefit from the same legal protections (‘ex turpi causa non oritur action’) accorded to legitimate property holders. As a matter of European public order, recognition of settlers’ property rights would be not only ineffective but also counter-productive. There is no reasonable basis to believe that the drafters of the European Convention and the signatory states intended to extend the protections of Protocol No. 1 to illegal settlement projects under military occupation. Any recognition and enforcement of illegal settlers’ property rights would allow a wrongdoing state to avoid legal consequences and defeat the object and purpose of the European Convention. Thus, to be effective, the interpretation of Article 1 of Protocol No. 1 in the context of military occupation should incorporate the principles of international law, international humanitarian law and the laws of war. 

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