Judgment;Summary — ECLI:EU:C:2024:55
Date: 2024-01-18
Language of the case: Bulgarian
Court formation: Eighth Chamber
Subject matter: General provisions;Right of establishment;Free movement of capital;Anti-discrimination;Non-discrimination on grounds of nationality
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Anonymised version  
Translation C-562/22 – 1 
Case C-562/22 
Request for a preliminary ruling  
Date lodged:  
25 August 2022  
Referring court:  
Rayonen sad Burgas (Bulgaria)  
Date of the decision to refer:  
15 August 2022  
Applicant:  
JD 
Defendant:  
OB 
  
ORDER 
No 4410    15 August 2022    Burgas 
[…] 
[…] [formation of the court, case number] 
The proceedings were instituted by an action brought by JD, a national of the 
Republic of Austria, born on 14 March 1964 […] [details of the applicant and his 
lawyer], having an address for service in Sofia, […], against OB […] [details of 
the defendant], having an address in Burgas, […], on the basis of the fifth 
alternative of Article 26(2) of the Zakon za zadalzheniata i dogovorite (Law on 
obligations and contracts; ‘the ZZD’), in conjunction with Article 17(1) of the 
ZZD, and in the alternative with Articles 60(1) and 61(2) of the ZZD. 
EN 
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The court is requested, in accordance with the fifth alternative of Article 26(2) of 
the ZZD, in conjunction with Article 17(1) thereof, to declare that the following 
contracts: 
1) purchase contract concluded by notarial deed No 175, volume IV, register 
number 4658, procedure No 510/2004, registered at the Sluzhba po vpisvaniata 
(Register Office) […] [registration details], between the seller AB and the buyers 
CD and EF concerning a plot of land consisting of land suitable for cultivation 
with a total area of 4 decares, third category, situated in the locality of ‘Kyusheto’, 
whereby, according to the location plan of the district of Sarafovo, Burgas, that 
plot had cadastral number 018336 and was formed from the former plot having 
cadastral number 018096, with a right of way through plot No 018335; according 
to the cadastral map and the registers of the city of Burgas, municipality of 
Burgas, district of Burgas, approved by Decree RD-18-9/30.01.2009 of the 
Executive Director of the Agentsia po geodezia, kartografia i kadastar (Geodesy, 
Cartography and Cadastre Agency) (‘the Executive Director’), the first-mentioned 
plot is currently the plot having identification number 07079.20.361, situated in 
Burgas, district of Sarafovo, locality of Agala, with an area of 2 998 m² and 
designated as agricultural land of the third category; 2) purchase contract 
concluded by notarial deed No 71, volume V, registration number 5101, procedure 
No 783/2004, registered at the Register Office […] [registration details], between 
the seller GH and the buyers IJ, CD and EF concerning a field with an area of 
3 159 decares, agricultural land of the third category, which, according to the plan 
of the locality of ‘Kyusheto’, was plot No 018164 in Massif 18 in the municipality 
of Sarafovo, and according to the cadastral map and registers of the city of 
Burgas, municipality of Burgas, district of Burgas, approved by Decree RD-18-
9/30.01.2009 of the Executive Director, is currently the plot having identification 
number 07079.20.343, situated in Burgas, municipality of Sarafovo, locality of 
Agala, having a surface area of 2 370 m² and designated as agricultural land of the 
third category; 3) purchase contract concluded by notarial deed No 93, volume II, 
registration number 1676, procedure No 272/2005, registered at the Register 
Office […] [registration details], between the sellers KL and MN and the buyers 
CD, PO and EF concerning a field with an area of 3 decares, which, according to 
the plan of the locality of the ‘Kyusheto’, is plot No 018213 in Massif 18 in the 
municipality of Sarafovo, and, according to the cadastral map and registers of the 
city of Burgas, municipality of Burgas, district of Burgas, approved by Decree 
RD-18-9/30.01.2009 of the Executive Director, is currently the plot having 
identification number 07079.20.393, situated in Burgas, municipality of Sarafovo, 
locality of Agala, with an area of 2 250 m² and designated as agricultural land of 
the third category, 
are null and void as sham transactions, since they concealed the actual buyer and 
acquirer, namely the applicant JD, because the buyer EF had acted as a front. 
In accordance with Article 17(1) of the ZZD, a finding is sought establishing that 
JD is the actual buyer under the abovementioned purchase contracts and, as such, 
is the actual acquirer of the following notional shares in the plots of land at issue: 
JD 
 
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1) In plot No 018336, JD owns 1 333 m² or a notional share of 2/6, whereby the 
plot, following a reduction of its area for regulation purposes, currently bears the 
identification number 07079.20.361 and has an area of 2 998 m²; it should be 
established that JD owns a notional share of 2/6 in that plot, which amounts to 
999.33 m². 2) In plot No 018164, JD owns 526.5 m² or a notional share of [2/12], 
whereby the plot, following a reduction of its area for regulation purposes, 
currently bears the identification number 07079.20.343 and has an area of 
2 370 m²; it should be established that JD owns a notional share of 2/12 in that 
plot, which amounts to 395 m². 
3) In plot No 018213, JD owns 1 500 m² or a notional share of 2/4, whereby the 
plot, following a reduction of its area for regulation purposes, currently bears the 
identification number 07079.20.393 and has an area of 2 250 m²; it should be 
established that JD owns a notional share of 2/4 in that plot, which amounts to 
1 125 m². 
An application has been made under Article 629(1) of the Grazhdansko-
protsesualen kodeks (Code of Civil Procedure; ‘the GPK’). 
The application alleges that the applicants JD and EF (the defendant’s father and 
testator) met in Moscow in 1992/1993. From 1995/1996 to 2018, EF lived 
primarily in Austria and was employed under a permanent contract of 
employment by the Austrian company of which the applicant JD was a person 
with authority to sign in the name of the company, and JD was EF’s superior. 
JD and EF became good friends over the years. 
In 2004, EF proposed to JD that he participate with him in the purchase of 
agricultural land in Bulgaria, in which other colleagues and close acquaintances of 
theirs from Austria would also participate as buyers. EF showed JD sketches and 
other documents relating to the area in which the purchase of the land was 
planned, although the land was not precisely identified by area and boundary at 
that time. After having examined the documents, JD decided to participate in the 
purchase, for which purpose he paid a total of three instalments of EUR 20 000 to 
EF by mid-2005, of which a total of EUR 51 000 was the purchase price and 
EUR 9 000 was for transaction costs. 
Furthermore, EF informed JD that, due to the restriction under Bulgarian law on 
the ability of foreigners to acquire agricultural land in Bulgaria, the notarial deeds 
relating to the purchase of the agricultural land were to state EF’s name as the 
buyer in respect of JD’s notional share, but that JD would be the actual buyer and 
co-owner, and EF would officially transfer it to JD by notarial deed once the 
restriction ceased to apply. 
Subsequently, on 4 October 2004, by notarial deed No 175 […] [repetition of the 
details regarding the notarial deed and its registration] (Annex No 1), a purchase 
contract was concluded between the seller AB and the buyers CD and EF 
concerning the following plot of land: plot of land, consisting of land suitable for 
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cultivation, with a total area of 4 decares […] [repetition of the details regarding 
plot No 018336]. Since the notional shares acquired by each buyer are not 
specified in the notarial deed, it must be assumed that they acquired the plot of 
land in equal shares, that is to say, 2 decares each. 
On 24 November 2004, by notarial deed No 71 […] [repetition of the details 
regarding the notarial deed and its registration] (Annex No 2), a purchase contract 
was concluded between the seller GH and the buyers IJ, CD and EF concerning 
the following plot of land: field with an area of 3 159 decares, […] [repetition of 
the details regarding plot No 018164]. The notional shares of each buyer were 
specified in that notarial deed, namely: IJ is the owner of 1 579.50/3 159 m², CD 
the owner of 789.75/3 159 m² and EF the owner of 789.75/3 159 m². 
On 15 April 2005, by notarial deed No 93 […] [repetition of the details regarding 
the notarial deed and its registration] (Annex No 3), a purchase contract was 
concluded between the sellers KL and MN and the buyers CD, PO and EF 
concerning the following plot of land: field with an area of 3 decares, […] 
[repetition of the details regarding plot No 018213]. Since the notional shares 
acquired by each buyer are not specified in the notarial deed, it must be assumed 
that they acquired the plot of land in equal shares, that is to say, 1 decare each. 
In 2006, EF produced three affidavits concerning the plots of land at issue, 
certified by the same notary before whom two of the abovementioned purchase 
contracts were concluded. 
By notarised affidavit of 20 April 2006, registration number 2241 (Annex No 4), 
EF stated that JD was the owner of a notional share of 1 333 m² in a 4-decare 
field, which, according to the location plan of the locality of ‘Kyusheto’, was plot 
No 018336 in Massif 18 in the municipality of Sarafovo, with boundaries and 
neighbouring plots as detailed in the affidavit, which fully correspond to the 
characteristics of the plot of land acquired by notarial deed No 175 […]. In 
addition, in the annex to that affidavit, EF stated that JD had paid a sum of 
EUR 17 000 for his share of 1 333 m² in the plot of land at issue. 
By notarised affidavit of 20 April 2006, registration number 2242 (Annex No 5), 
EF stated that JD was the owner of a notional share of 526.5 m² in a field of 3 159 
decares, which, according to the location plan of the locality of ‘Kyusheto’, was 
plot No 018164 in Massif 18 in the municipality of Sarafovo, with boundaries and 
neighbouring plots as detailed in the affidavit, which fully correspond to the 
characteristics of the plot of land acquired by notarial deed No 71 […]. In the 
annex to that affidavit, EF stated that JD had paid a sum of EUR 7000 for his 
share of 526.5 m² in the plot of land at issue. 
By notarised affidavit of 20 April 2006, registration number 2240 (Annex No 6), 
EF stated that JD was the owner of a notional share of 1 500 m² in a field of 3 
decares, which, according to the location plan of the locality of ‘Kyusheto’, was 
plot No 018213 in Massif 18 in the municipality of Sarafovo, with boundaries and 
JD 
 
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neighbouring plots as detailed in the affidavit, which fully correspond to the 
characteristics of the plot of land acquired by notarial deed No 93 […]. In the 
annex to that affidavit, EF stated that JD had paid a sum of EUR 27 000 for his 
share of 1 500 m² in the plot of land at issue. 
Due to the regulation of the plots of land, which is relevant to the precise 
determination of the notional shares of each co-owner, they currently have the 
following characteristics: 
following regulation, plot No 018336, with an area of 4 decares, became regulated 
plot (ureguliran pozemlen imot, UPI) H1-1277 in district 20, sub-district of 
Sarafovo, locality of ‘Agala’ (formerly ‘Kyusheto’), currently having sketch 
identification number 07079.20.361 and an area of 2 998 m²; 
following regulation, plot No 018164, with an area of 3 159 decares, became 
regulated plot (UPI) HH-1275 in district 19, sub-district of Sarafovo, locality of 
‘Agala’ (formerly ‘Kyusheto’), currently having sketch identification number 
07079.20.343 and an area of 2 370 m²; 
following regulation, plot No 018213, with an area of 3 decares, became regulated 
plot (UPI) SH-1291 in district 22, sub-district of Sarafovo, locality of ‘Agala’ 
(formerly ‘Kyusheto’), currently having sketch identification number 
07079.20.393 and an area of 2 250 m²; 
EF died in Burgas on 3 April 2021. According to the certificate of inheritance, his 
son OB is his sole heir. 
The defendant filed a statement of defence within the statutory time limit, 
opposing the application on the ground that it is unfounded. He disputes the ability 
of the submitted declarations to serve as counter declarations (contre lettre) and 
asserts that they do not demonstrate that someone had acted as a front man, as 
alleged by the applicant. 
According to the defendant, the declarations submitted did not contain any express 
statements revealing that someone had acted as a front man. The declarations 
submitted did not bear the signatures of both contracting parties (the applicant and 
the defendant’s testator). 
Emphasis is placed on the discrepancy between the purchase prices stated in the 
notarial deeds and those resulting from the declarations. The date on which the 
affidavits in question were filed is also contested. All three affidavits were signed 
on the same day, namely on 20 April 2006 and thus approximately two years after 
the sales in question were made in 2004 and 2005. 
It is submitted that 18 years had elapsed between the conclusion of the contracts at 
issue in 2004 and the bringing of the action in the present case in 2022, for 14 
years of which Bulgaria was already a Member State of the European Union and, 
therefore, the applicant’s acquisition of the plots of land was not prohibited. 
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The authenticity of the annexes to the affidavits submitted with the application 
initiating proceedings is contested and it is argued that they were not signed by the 
person specified as their author in their text (the defendant’s father). It is conceded 
that the original version of Article 22 of the Konstitutsia na Republika Bulgaria 
(Constitution of the Republic of Bulgaria) applied at the time of conclusion of the 
transactions at issue, and expressly prohibited foreign natural and legal persons 
from acquiring ownership of land in Bulgaria. That constitutional provision was 
amended, and it was only after 1 January 2007 that the constitution permitted 
foreigners – that is to say, only nationals of Member States of the European 
Union – to acquire ownership of land. 
It is asserted that more than five years – the general limitation period – elapsed 
between the date on which the transactions were concluded and the date on which 
the action was brought in the present case. The defence of limitation has been 
raised. 
Furthermore, a plea of adverse possession is also raised in relation to the plots of 
land at issue. 
It is argued that the request for a preliminary ruling under Article 629(1) of the 
GPK (Code of Civil Procedure) is unfounded since EU law is not applicable and 
not relevant to the correct resolution of the dispute. 
The panel seised of the present case finds that the conditions for a request for a 
preliminary ruling from the Court of Justice of the European Union are met. 
With regard to the possibility for EU citizens to acquire ownership of agricultural 
land in the Republic of Bulgaria and the general rule provided for in Article 3c(1) 
of the Zakon za sobstvenostta i polzvaneto na zemedelskite zemi (Law on the 
ownership and use of agricultural land; ‘the ZSPZZ’), which provides that only 
natural and legal persons who have been resident or established in Bulgaria for 
more than five years may acquire ownership of Bulgarian agricultural land, the 
present case raises the question as to the interpretation of that provision and its 
compatibility with certain provisions of EU law and as to the relationship between 
those provisions of EU law and the national law applicable in the present 
proceedings. 
Indeed, agricultural land in Bulgaria enjoys special protection by the State and 
society. According to Article 3c of the ZSPZZ, natural persons who have not 
resided in Bulgaria for at least the last five years may not acquire ownership of 
Bulgarian agricultural land by any type of transaction. The Court should concisely 
establish whether the provision of Article 3c of the ZSPZZ is contrary to EU law. 
In fact, in the context of its accession to the European Union, Bulgaria signed a 
treaty according to which it undertook to comply with the founding Treaties (EU 
Treaty and FEU Treaty). The time limit laid down in the Treaty of Accession of 
the Republic of Bulgaria to the European Union, which prevented nationals and 
legal entities from Member States of the EU and Contracting States to the EEA 
JD 
 
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Agreement from acquiring ownership of agricultural land in Bulgaria, expired on 
1 January 2014 (Article 3(5) and (6) of the ZSPZZ). 
On 18 October 2017, the [European] Commission published an ‘Interpretative 
Communication on the Acquisition of Farmland and European Union Law’ (OJ 
2017, C 350, p. 5). In it, the Commission explains the benefits and challenges of 
foreign investment in agricultural land, the applicable EU law and the relevant 
case-law of the Court. 
According to the communication, the right to acquire, use and dispose of 
agricultural land falls under Article 63 TFEU, which concerns the free movement 
of capital. 
Are the conditions for the acquisition of agricultural land which are laid down in 
Article 3c of the ZSPZZ compatible with the values enshrined in the Bulgarian 
Constitution and EU law, having regard to the acts and legal instruments of the 
Bulgarian authorities and the Commission? The Commission instituted 
infringement proceedings against Bulgaria, INFR (2015)2018, on the ground that 
Article 3c of the ZSPZZ is contrary to Articles 49 and 63 TFEU. 
The Commission considers that, by introducing the provisions of the ZSPZZ, the 
Republic of Bulgaria has infringed the abovementioned provisions of the TFEU, 
which prohibit restrictions on the freedom of establishment of nationals of a 
Member State in the territory of another Member State and restrictions on the free 
movement of capital between Member States and between Member States and 
third countries. 
On 26 March 2015, an official letter of formal notice under Article 258 TFEU was 
sent, with a deadline of two months within which to respond. On 26 May 2016, 
the Commission sent a reasoned opinion, C(2016) 3061 final, to the Republic of 
Bulgaria, warning that if the national legislation is not brought into line with EU 
law within a fresh time limit of two months, the procedure will proceed to the 
judicial phase before the Court, in which case the Court’s decision will be binding 
on the Bulgarian State. 
In the light of the foregoing, does Article 3c of the ZSPZZ constitute a restriction 
on the freedom of establishment and the free movement of capital within the 
meaning of Articles 49 and 63 TFEU? Article 49 TFEU prohibits restrictions on 
the free establishment of nationals of Member States and any discrimination on 
grounds of nationality. According to settled case-law, Article 63 TFEU generally 
prohibits restrictions on movements of capital between Member States (judgment 
of 22 November 2013, Essent and Others, C-105/12 to C-107/12, 
EU:C:2013:677). 
The panel seised of the present case considers that the request for a preliminary 
ruling is relevant to the proper resolution of the case, not only for the reasons set 
out above, but also because of the requirement in Bulgarian law that, in the event 
of a judgment finding in favour of the applicant in proceedings involving any kind 
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of deception, the legal instrument which is the subject of the deception must be 
permissible under national law. 
In the light of the foregoing, and pursuant to Article 628 et seq. of the GPK (Code 
of Civil Procedure), the Rayonen sad Burgas (District Court, Burgas) has 
ORDERED: 
The following questions are REFERRED to the Court of Justice of the European 
Union for a PRELIMINARY RULING: 
On the basis of Article 19(3)(b) TEU and point (b) of the first paragraph and the 
third paragraph of Article 267 TFEU: Does the legislation of the Republic of 
Bulgaria, as a Member State, at issue in the main proceedings, under which the 
acquisition of ownership of agricultural land in Bulgaria is subject to the condition 
of five years’ residence in the territory of that Member State, constitute a 
restriction which infringes Articles 18, 49, 63 and 345 TFEU? 
More specifically, does that condition for the acquisition of ownership constitute a 
disproportionate measure which fundamentally infringes the prohibition of 
discrimination under Article 18 TFEU and the principles of free movement of 
capital and freedom of establishment within the Union which are enshrined in 
Articles 49 and 63 TFEU and Article 45 of the Charter of Fundamental Rights of 
the European Union? 
[…] [stay of proceedings] 
[…] 
[…] [other formalities]