Expropri­ation in Green­land

Airport expansions in Greenland are an important expansion of the infrastructure that will provide a direct airport link between Nuuk and Copenhagen. The new runway in Nuuk will be built parallel to the existing runway, and in this connection a number of areas have been expropriated for the project.

Not the same right of private property as in Denmark

As opposed to Denmark, there is no right of private property with respect to plots of land in Greenland. All areas are for common use, and no area may be exempted from common use and used without permission from the area authority. It is thus possible to apply for land allotment for specific use, e.g. the erection of a building. A land allotment is generally of indefinite duration and contains a number of terms, including e.g. a requirement for use, compliance with local pans, etc. A land allotment cannot be made subject to acquisition and sale or mortgage. However, a land allotment may be transferred with the area authority’s permission in connection with the sale of a building in the area.

Legal framework of expropriation in Greenland

The Greenland law on expropriation is relatively brief. The Act lays down that the Government of Greenland may make decisions on expropriation within areas under the Government of Greenland, if required to serve the public interest.

Before making a decision on expropriation, the area authority must try to make a voluntary agreement. If this is not possible, the Government of Greenland may decide on expropriation. In this connection, the Government of Greenland will set up an expropriation committee consisting of members appointed by the Government of Greenland, the municipality in question and the parties to the case. First, the expropriation committee will consider the proportionality of the decision to expropriate, and the committee has authority to demand adjustments of the expropriation project.

The committee will also fix compensation. As there are no detailed rules on the fixing of compensation, this is based on the requirement for full compensation under the Act of the Constitution, see section 73(1) of the Act of the Constitution. The legal framework of the fixing of compensation is therefore the same as for expropriations in Denmark.

Greenland case law has previously established that the special circumstance that you cannot own the actual area is not the same as the expropriated area not having an economic value, see UfR1977.1057Ø. In that case, compensation was fixed based on the market value of the buildings which also included a location value.

Expropriation for airport expansion

In connection with the expansion of the airport in Nuuk, it was necessary to expropriate two major business areas used for rental of containers and storage of boats. The areas were not subject to a duty of construction.

The area authority claimed that compensation for one of the areas should be fixed at DKK 0 referring to the fact that there were no buildings in the area to transfer, and the area therefore had no market value as the area, viewed separately, was not transferable under the Area Act. As regards the second area, the area authority claimed that compensation was not to be fixed at more than the value of a small building in the area.

The owner claimed that compensation was to be fixed at an amount equivalent to the loss of the current rent income based on the use at the time of expropriation. At the same time, that principle addressed the problem of one area not having any buildings and therefore not being transferable under the Area Act.

The owner’s view on compensation was supported by the case law of the Danish authorities which contains examples of compensation having been fixed based on a capitalisation of the current rent income.

The committee chose to fix compensation based on a capitalisation of the rent income; and despite the fact that it would not be possible to transfer the areas. The decision shows that you may be entitled to compensation even if the area, viewed separately, is not transferable. The decision also shows that the principles on compensation laid down by the Danish authorities may also be applied in connection with expropriation in Greenland.

Horten is represented in Greenland by its associated cooperation partner in Nuuk, Nuna Law Firm, which was established in Nuuk more than 50 years ago and is the leading law firm in Greenland.

Nuna Law Firm and Horten advise on all conditions prevailing in Greenland based on many years’ local experience and presence in Nuuk combined with highly specialised legal expertise in Copenhagen.