Just wait until an admin decides their fates. Our opinions don't count.
I see that this is a two sided situation. It was a PVP area, and that is definatly not illegal to fight in there. If someone decides not to give stuff back, they aren't forced to. But if both parties agreed to giving items back, there might be a problem.
This is exactly why I don't fight any more with valuables anymore. If I want to fight in the tourney arena, I just use unarmed with no armour.