Appeal court confirms state owns Engjanes resource rights
Thursday 22nd October 2026 on 21:45 in
Iceland
Iceland’s Court of Appeal has ruled that the state owns the mining rights and the water and geothermal rights beyond household needs on Engjanes, an abandoned farm in Árneshreppur, mbl.is reported. The court upheld a 2025 ruling by the Westfjords District Court.
The court found that the rights were lawfully excluded when the farm was sold in 1958 and remained protected even though they were not listed on the property certificate when current owner Felix von Longo-Liebenstein bought it in 2006. He was ordered to pay the state 900,000 krónur in legal costs for the appeal. No district court costs were awarded.
The farm was sold to local official Guðjón Guðmundsson under special legislation. The deed expressly excluded the mines and mining rights, as well as water and geothermal rights beyond household needs. It was registered on 12 February 1958.
Von Longo-Liebenstein argued that the minister had no legal authority to exclude the resource rights from the sale. The Court of Appeal rejected that argument, saying the legislation imposed no conditions other than requiring the price to be set by court-appointed appraisers. The minister therefore had discretion to set the terms of the sale, and the court found no evidence that other laws then in force limited that discretion. It also noted that general legislation on the sale of state farms to tenants specifically excluded mining rights and water and geothermal rights beyond household needs.
When von Longo-Liebenstein bought Engjanes, the deed said the property was sold with everything belonging to it, without exception. But the property certificate available at the time did not show that the resource rights had been separated from the farm.
In 2009, he agreed with VesturVerk ehf that the company could investigate the feasibility of diverting the Eyvindarfjarðará river to Hvalá. The agreement also provided for the company to use Engjanes’s water rights if specified conditions were met.
The state asked in 2022 for the property register to be corrected to match the 1958 deed. The district commissioner made the correction, which von Longo-Liebenstein challenged. The state then brought the case in November 2023.