Portaria No. 259/MJ/92 on 28 May, 1992. According to the State the physical demarcation of the territory was carried out in 1995. The State reports that in 1996 Decree No. 1.775 was promulgated, which gave the good-faith occupants of the indigenous lands the possibility to challenge the demarcation process and, as a result, 269 challenges were filed by parties interested in the Xucuru indigenous territory. The State argues that those challenges were all simultaneously rejected by Ministerial Decision (Despacho) No. 32 from the Minister of Justice, which was published in the Official Gazette of the Union (hereinafter "DOU") on July 10, 1996. The State adds that on April 30, 2001, through a Presidential Decree published in the DOU on May 2, 2001, the executive branch of Brazil homologated the demarcation of the Xucuru indigenous territory corresponding to an area of 27.055,0583 hectares. According to the State, the next step, consisting of the registration of indigenous territory, was not carried out immediately because the Property Registry official Official of the City of Pesqueira filed the objection motion (Ação de suscitação de dúvidas) No. 2002.83.00.012334-9 (original number 2002.83.00.012334-9) in August 2002. The State warns that such action was dismissed on June 22, 2005 and that it proceeded to register the indigenous territory in November 18, 2005, as property of the Federal Union for permanent "possession" of the Xucuru indigenous people. The State notes that the administrative demarcation process was formally concluded with the registration of the Xucuru indigenous lands on that date. 21. Notwithstanding the foregoing, the State has recognized throughout the processing of this case that the removal of non-indigenous occupants from the Xukuru indigenous territory has not been fully completed. In this regard, the State reports that between 2001 and 2005, FUNAI paid compensation to 296 non-indigenous occupants, while the survey of non-indigenous occupations, completed in 2007, indicated the existence of 624 occupations. The State emphasizes that it continued making efforts to complete the process of restoration of the indigenous territory and that approximately by 2010 more than 90% of non-indigenous occupants were already properly compensated and removed from the area. According to the State, approximately 50 occupants still remain, who have not been compensated or removed as a result of gaps in their documentation or due to legal actions pending a final decision. 22. Regarding the last point, the State reports that there are two legal challenges filed by nonindigenous settlers pending a final decision: (i) a “motion to regain possession”; and (ii) an "ordinary action to annul the administrative demarcation process". On this point the State reiterates the arguments presented in the admissibility stage on the non-exhaustion of domestic remedies. In addition, the State argues that the admissibility report was legally wrong and inconsistent with the jurisprudence of the Inter-American Court of Human Rights (hereinafter "the Inter-American Court" or "Court"), when it determined that the challenges lodged by third parties interested in the indigenous territory, by not being filed by the petitioners or the alleged victims or on their behalf, would not be taken into consideration to determine whether the requirement of exhaustion of domestic remedies was met. The State indicates that in the merits stage the Commission must consider such legal actions as "necessary and integral parts of the demarcation process of the Xucuru indigenous territory". 23. According to the State, the motion to regain possession was promoted by Milton do Rego Barros Didier and another in March, 1992, with regards to the possession of the Hacienda "Caipe", of about 300 hectares, in the city of Pesqueira. It indicates that following a conflict of jurisdiction the motion was decided in the first instance in favor of non-indigenous occupants in July 1998. It points out that the appeal was rejected in second instance by the Federal Regional Court of the 5th Region (hereinafter "TRF"), on April 24, 2003. A special appeal was presented to the STJ in December 2003, which was rejected on November 6, 2007. It further states that a motion of embargo de declaração was filed, which was rejected in November 2009. Finally, it indicates that another motion of embargo de declaração was filed and is currently pending. 24. Also, according to the State, the ordinary action was promoted by Paulo Pessoa Cavalcanti de Petribu and 7 other individuals in February 2002, seeking the annulment of the administrative demarcation process concerning their properties: the Hacienda "Lagoa da Pedra", "Ramalho", “Lago Grande” and the farms “Capim Grosso" and "Pedra da Cobra". According to the account of the State, they also filed, simultaneously and as a complement to the ordinary action, an injunction in December 2002 regarding the anticipated production of evidence on the invasion and destruction of the Hacienda "Lagoa da Pedra". It indicates that on June 1, 2010, the 12th Federal Court of Pernambuco decided in first instance that the ordinary action was 5