Source: https://en.rlf.com.ua/budharant-private-construction-and-investment-enterprise/
Timestamp: 2019-04-18 19:00:16+00:00

Document:
The Budharant PCIE has been fighting the bureaucracy and artificially generated problems posed by a variety of authorities for more than a decade. Taking into account the information resonance created around the enterprise’s activities, we decided to dispel certain myths and express our position.
This article will not describe the whole history of confrontation of bureaucracy and political populism that the enterprise encountered during its economic activities. Neither will it describe all litigation and hardship with the development of necessary documentation. It describes the part of the events that, in the opinion of Managing Partner of the Rezultat law firm Maxim Polishkevych, is directly related to the decisions of Cherkasy City Council of August 10, 2017, on the enterprise’s rights.
Similarly, the article deliberately misses the political part of the question. You are invited to consider the facts and their legal assessment from the point of view of domestic law and practice of the European Court of Human Rights.
And just for the record: since 2006, the Budharant PCIE has paid to the city budget 1,423,674.80 (one million four hundred twenty-three thousand six hundred seventy-four hryvnias 80 kopecks) of the rent (excluding currency rates and indexation).
December 28, 2005—Cherkasy City Council adopted the decision No. 8-962 On the Provision to the Budharant PCIE a Land Plot for Lease at the Crossroads of Kozatska and Heroes of the Dnieper Streets.
January 31, 2006—Cherkasy City Council adopted the decision No. 9-86 On the Provision to the Budharant PCIE a Land Plot for Lease in Peremoha Residential Area between Houses along 126 Smilianska and 8 30-richchya Peremohy Streets.
February 7, 2006—a land lease agreement was entered into by Cherkasy City Council and the Budharant PCIE. The leased property is a land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets.
February 13, 2006—a land lease agreement was entered into by Cherkasy City Council and the Budharant PCIE. The leased property is a land plot at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets.
February 18, 2006—a land lease agreement of February 7, 2017, was registered with the Cherkasy regional branch of the State Land Cadastre Center under the State Land Committee of Ukraine state enterprise under No. 040677500080. The leased property is a land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets.
February 18, 2006—a land lease agreement of February 13, 2006, was registered with the Cherkasy regional branch of the State Land Cadastre Center under the State Land Committee of Ukraine state enterprise under No. 040677500081. The leased property is a land plot at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets.
April 15, 2014 —the Architecture and Town-Planning Council of Cherkasy City Council considered the issue of providing the town-planning conditions and restrictions on the development of a land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets.
May 14, 2014—the Executive Committee of Cherkasy City Council adopted the decision No. 500 which approved the town-planning conditions and restrictions on the development of a land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets.
August 19, 2014—Cherkasy City Council adopted the decision No. 2-56 which overturned the Executive Committee’s decision No. 500 of May 14, 2014, on the provision of the enterprise with the town-planning conditions and restrictions on the development of a land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets on the grounds (according to the City Council) of their non-compliance with the legislation.
October 13, 2014—the Economic Court of Cherkasy Oblast adopted the decision to accept for hearing the lawsuit of Cherkasy City Council against the Budharant Private Construction and Investment Enterprise for the recovery of arrears under the land lease agreement of February 18, 2006 (case No. 925/1726/14).
November 20, 2014—the Economic Court of Cherkasy Oblast adopted the decision to accept for hearing the lawsuit of the Prosecutor of the city of Cherkasy on behalf of the state represented by Cherkasy City Council against the Budharant PCIE on the land lease agreement cancelation and the obligation to return the land plot at the crossroads of Kozatska and Heroes of the Dnieper Streets (case No. 925/2128/14).
March 19, 2015—the Sosnivskyi District Court of Cherkasy adopted the resolution on case No. 712/17480/14-A which overturned the decision of Cherkasy City Council No. 2-56 of August 19, 2014, to overturn the Cherkasy City Council Executive Committee’s decision No. 500 of May 14, 2014.
August 13, 2015—the Supreme Economic Court of Ukraine adopted the resolution on case No. 925/1726/14 containing a reference to the illegality of debt calculations. Cherkasy City Council prematurely referred part of the disputed land to commercial lands and technical infrastructure. However, as stated in the lease agreement terms, for the period of development which, as established by the courts, is not yet completed, the land plot is referred to recreational lands and other open lands (lands occupied by the current development) and only after its completion, to commercial lands and technical infrastructure.
December 4, 2015—the Economic Court of Cherkasy Oblast adopted the decision on case No. 925/2128/14 concerning the demands of the Prosecutor of the city of Cherkasy of the land lease agreement cancelation and the obligation to return the leased land. The claim was entirely dismissed due to the fact that the Prosecutor unduly applied to the Economic Court against the Budharant PCIE on behalf of the state and did not prove the infringement; neither did Cherkasy City Council support the Prosecutor’s demands.
August 17, 2016—the Cherkasy City Council Executive Committee sent a letter No. 9143-01-25 which denied amending the Cherkasy City Council’s decision No. 8-962 of December 28, 2005, with the aim of correcting the made technical error which consisted in the fact that the land leased by the Cherkasy City Council’s decision No. 8-962 of December 28, 2005, to the Budharant Private Construction and Investment Enterprise with an area of 34,607 square meters at the crossroads of Kozatska and Heroes of the Dnieper Streets for 49 years for siting and further exploitation of the hotel complex, was mistakenly entirely referred to the water fund lands (the shoreline belt).
October 10, 2016—the Sosnivskyi District Court adopted the resolution on case No. 712/10864 /16A, in which the court came to the conclusion that the land plot leased by the Cherkasy City Council’s decision No. 8-962 of December 28, 2005, to the Budharant Private Construction and Investment Enterprise with an area of 34,607 square meters at the crossroads of Kozatska and Heroes of the Dnieper Streets for 49 years for siting and further exploitation of a hotel complex, was mistakenly entirely referred to the water fund lands (the shoreline belt), and therefore there was a need to amend the specified decision as due to the indicated error it was impossible to use the main part of the land plot for the purposes for which it had been provided, namely: for siting and further exploitation of a hotel complex.
November 17, 2016—Cherkasy City Council adopted the decision No. 2-1367 on amendments to its decision No. 8-962 of December 28, 2005, which according to the main target purpose referred the land plots with cadastral numbers 7110136400:01:013:0015 and 7110136400:01:013:0023 to residential and public development lands. According to its main target purpose, the land plot with the cadastral number 7110136400:01:013:0022 was referred to the water fund lands.
December 9, 2016—there was amended the land lease agreement of February 7, 2006, under which the land plots with cadastral numbers 7110136400:01:013:0015 and 7110136400:01:013:0023 were referred according to their main target purpose to residential and public construction lands. According to its main target purpose, the land plot with the cadastral number 7110136400:01:013:0022 was referred to the water fund lands.
December 21, 2016—with the State Architectural and Construction Supervision Authority of Cherkasy City Council, there was registered the declaration of the readiness for operation of the object belonging to the category of complexity І–ІІІ under No. СhK143163562194. The object is located on a leased land at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets.
April 26, 2017—the Architecture and Town-Planning Council confirmed the Budharant PCIE’s pre-project proposals, namely: by cl. 17 of the Architecture and Town-Planning Council’s decision No. 35 of April 26, 2017, it was decided to: provide for the grading of a number of stories of buildings in a multistoried residential building neighborhoods (Shora PE, Budharant), 12, 9, 7, 5 stories with a descend towards the reservoir). The proposals related to the land plot located at the corner of Kozatska and Heroes of the Dnieper Streets.
May 25, 2017—according to the orders of the Director of the Department of Architecture and Town-Planning nos. 145, 146, the Budharant Private Construction and Investment Enterprise was provided with the town-planning conditions and restrictions on the development of a land plot located at the corner of Kozatska and Heroes of the Dnieper Streets.
May 26, 2017—according to the orders of the Director of the Department of Architecture and Town-Planning nos. 149, 150, 151, the Budharant Private Construction and Investment Enterprise was provided with the town-planning conditions and restrictions on the development of a land plot located at the corner of Kozatska and Heroes of the Dnieper Streets.
May 29, 2017—the service cooperative Cherkasybud 17 housing society and the Artproektbud LLC entered into the general contractor agreement for capital development No. 29/05-01 GP. The development site is a land plot at the corner of Kozatska and Heroes of the Dnieper Streets.
June 1, 2017—the declaration on the beginning of construction works (construction of a residential development with a parking lot at the corner of Kozatska and Heroes of the Dnieper Streets in the city of Cherkasy No. ChK083171520442) was registered with the State Architectural and Construction Supervision Authority of Cherkasy City Council.
June 6, 2017—with the State Architectural and Construction Supervision Authority of Cherkasy City Council, there were registered the declarations on the beginning of construction works (construction of a residential development with a parking lot at the corner of Kozatska and Heroes of the Dnieper Streets in the city of Cherkasy Nos. ChK08317153322, ChK083171573350, ChK083171572550, ChK083171572835).
June 8, 2017—with the State Architectural and Construction Supervision Authority of Cherkasy City Council, there was registered the declaration of the readiness for operation of the object belonging to the category of complexity І–ІІІ under No. СhK143163562194 located along 126 Smilianska and 8 30-richchya Peremohy Streets.
June 19, 2017—the service cooperative Cherkasybud 17 housing society and the Rembud Teremky LLC entered into the contractor agreement No. 17/33 for pile deepening. The work area is a land plot at the corner of Kozatska and Heroes of the Dnieper Streets.
July 12, 2017—there was registered on the City Council website the e-petition No. Che/150-EP against the development of the shoreline belt / the Dnieper river embankment in Cherkasy, initiated by Ruban Serhii Leonidovych.
August 5, 2017—the service cooperative Cherkasybud 17 housing society began to attract assessed contributions of the cooperative associate members.
August 10, 2017—Cherkasy city councilors at the thirty-third regular plenary meeting of the second session of Cherkasy City Council adopted the decision No. 2-2313 On Sending the Inquiry of Deputy O. R. Radutskyi.
August 10, 2017—Cherkasy city councilors at the thirty-third regular plenary meeting of the second session of Cherkasy City Council adopted the decision No. 2-2314 On Consideration of the E-petition of July 12, 2017, No. Che/150-EP, against the Development of the Shoreline Belt / the Dnieper River Embankment in Cherkasy.
August 10, 2017—Cherkasy city councilors at the thirty-third regular plenary meeting of the second session of Cherkasy City Council adopted the decision No. 2-2315 On Overturning the Orders on Provision of Town-Planning Conditions and Restrictions 145, 146 of May 25, 2017, and 149, 150, 151 of May 26, 2017.
August 10, 2017—Cherkasy city councilors adopted the decision No. 2-2322 On Agreement on Free Transfer in Ownership of the Territorial Community of the City of Cherkasy of External Engineering Networks to Residential Houses No. 126 along Smilianska and No. 8 along 30-richchya Peremohy Streets which provided for the free transfer in ownership of the city territorial community of external engineering networks for a total amount of UAH 2,366,499.
August 21, 2017—the Budharant PCIE and the Elektro-Bud LLC entered into the contractor agreement No. 75-BR.
The Code of Administrative Legal Proceedings of Ukraine (hereinafter referred to as the CALP of Ukraine) (namely: Part 3 of Article 2) reads that in cases concerning appeals against decisions, actions, or inactivity of the subjects of power, administrative courts shall check whether they have been adopted (committed): on the basis of, within the limits of authority, and in the manner stipulated by the Constitution and laws of Ukraine.
The Cherkasy City Council executive body which issues the town-planning conditions and restrictions on the development of a land plot is the Department of Architecture, Town-Planning, and Inspection.
According to Article 19 of the Constitution of Ukraine, local self-government bodies and their officials are obliged to act only on the basis of, within the limits of authority, and in the manner stipulated by the Constitution and laws of Ukraine.
In the appealed decisions of Cherkasy City Council No. 2-2314 of August 10, 2017, On Consideration of the E-petition No. Che/150-EP of July 12, 2017, against the Development of the Shoreline Belt / the Dnieper River Embankment in Cherkasy and No. 2-2315 On Overturning the Orders on Provision of Town-Planning Conditions and Restrictions 145, 146 of May 25, 2017, and 149, 150, 151 of May 26, 2017, the Respondent refers to Articles 25, 26, 31, 33 of the Law On Local Self-Government, however these norms do not provide for the authority of the local self-government body to overturn town-planning conditions and restrictions.
Instead, Part 8 of Article 29 of the Law of Ukraine On Regulation of Town-Planning Activity stipulates that amendments to town-planning conditions and restrictions may be made by the body that has granted them, upon the developer’s application, to execute the instructions of chief inspectors of construction supervision of the central executive body which implements the public policy on the state architectural and construction control and supervision, or upon court decision.
Consequently, legislation provides neither for the authority nor for the order of overturning by the local self-government body’s decision on its own initiative the previously granted town-planning conditions and restrictions for designing the development object. Since Cherkasy City Council is not the appropriate control body and does not have such authority, the appealed decisions of Cherkasy City Council are unlawful and grossly violate the Complainant’s rights and interests, in particular, make it impossible to use the right to develop the territory.
• Clause 4: having analyzed the functions and authority of local self-government bodies, regulated by the Constitution of Ukraine and other laws of Ukraine, the Constitutional Court of Ukraine concluded that when local self-government bodies solve the local issues while representing the common interests of territorial communities of villages, towns, and cities, they take both normative and non-normative acts. Normative acts include those establishing, changing, or terminating the rules of law, having a local character, designed for a wide range of individuals and are applied repeatedly, while non-normative acts provide for specific requirements addressed to an individual entity or a legal entity, are applied once and after implementation their validity expires. This conclusion is consistent with the Constitutional Court of Ukraine’s legal positions, set forth in the decisions No. 20-RP/2001 of December 27, 2001, in the case of decrees of the Presidium of the Verkhovna Rada of Ukraine concerning the Communist Party of Ukraine registered on July 22, 1991 (Paragraph 1 of Clause 6 of the Preamble), No. 2-ZP of June 23, 1997, in the case of acts of organs of the Verkhovna Rada of Ukraine (Paragraph 4 of Clause 1 of the Preamble).
• Paragraph 4 of Clause 4.1: in accordance with the Law of Ukraine On Town-Planning Principles, the village, township, city councils are authorized to approve local rules of development of parts of the settlements and amend them as requested by the specially authorized bodies of town-planning and architecture (Part 2 of Article 12, Part 5 of Article 17). According to the Law of Ukraine On Planning and Development of Territories, the local council approves the town-planning documentation and after agreement with the specially authorized body on issues of town-planning and architecture, amends it by its own decision (Parts 3 and 4 of Article 10).
• Paragraphs 5 and 6 of Clause 5: the Constitutional Court of Ukraine states that the Constitution of Ukraine enshrines the principle according to which human rights and freedoms and their guarantees determine the content and orientation of the activities of the State which is responsible to the citizen for its activities (Article 3). Local self-government bodies are responsible for their activities to legal entities and individuals (Article 74 of the Law). Thus, local self-government bodies may not overturn their previous decisions and amend them if according to the requirements of these decisions there arose any legal relationships associated with the implementation of certain subjective rights and the legally protected interests, and the subjects of these relationships object to their amending or termination. It is “a guarantee of stability of social relations” between the local self-government bodies and citizens, forming the citizens’ confidence that their existing situation will not be affected by adoption of the later decision that is consistent with the legal position laid down in Paragraph 2 of Clause 5 of the Preamble of the Constitutional Court of Ukraine’s Decision No. 1-ZP of May 13, 1997, in the case concerning incompatibility with the deputy’s mandate.
Non-normative legal acts of the local self-government body are acts of one-time application, exhausting their validity by the fact of their implementation, therefore they cannot be overturned or changed by the local self-government body after their implementation.
Thus, in accepting the appealed decisions, the Respondent violated the aforementioned norms set forth in the decision of the Constitutional Court of Ukraine.
The following fact is also evidence that the appealed decisions of Cherkasy City Council are taken in violation of the grounds, limits, and authority stipulated by the Constitution and laws of Ukraine.
On July 12, 2017, Ruban Serhii Leonidovych registered on the City Council website the e-petition No. Che/150-EP against the development of the shoreline belt / the Dnieper river embankment in Cherkasy.
On August 10, 2017, Cherkasy city councilors at the thirty-third regular plenary meeting of the second session of Cherkasy City Council voted to support the e-petition.
To stop the split-up of OUR land and comply with the UKRAINIAN LAW.
To overturn the Cherkasy City Council’s decision №8-962 of December 28, 2005.
To cancel the land lease agreement of February 7, 2006, between Cherkasy City Council and the BUDHARANT Private Construction and Investment Enterprise.
To overturn the town-planning conditions and restrictions Nos. 145; 146; 149; 150; 151 of May 25, 26, 2017.
To appeal to law enforcement agencies to investigate the violatio of the law of Ukraine and the corruption actions of officials involved in this UNLAWFUL ACT.
Moreover, Article 23-1 of the Law of Ukraine On Citizens’ Appeals provides that support or non-support of an e-petition is publicly announced on the official website by the head of the respective local council regarding the e-petition, addressed to the local self-government body.
The response to the e-petition no later than the next working day after the end of its consideration is published on the official website of the authority to which it was addressed, and will be also sent in writing to the author (initiator) of the e-petition and the corresponding public association, which carried out collecting signatures in support of the respective e-petition. If considered appropriate, the proposals contained in the e-petition may be implemented by the body to which it was addressed by adopting a relevant decision on matters within its competence.
The response to the e-petition must contain the results of consideration of issues raised in it with the appropriate justification.
According to the results of consideration of the petition, the Respondent adopted the appealed decision of Cherkasy City Council No. 2-2314 of August 10, 2017, On Consideration of the E-petition No. Che/150-EP of July 12, 2017, against the Development of the Shoreline Belt / the Dnieper River Embankment in Cherkasy which was published on the official website, as a response to the petition, however the indicated decision contained no justification, except for the links to Articles 26, 31, 33 of the Law of Ukraine On Local Self-Government in Ukraine, which do not provide for the authority to overturn town-planning conditions and restrictions.
In accordance with Part 3 of Article 2 of the CALP of Ukraine, in cases concerning appeals against decisions, actions, or inactivity of the subjects of power, administrative courts shall check whether they have been adopted (committed): reasonably, that is, taking into account all the circumstances relevant for the decision-making (commission of action).
Adoption of the appealed decisions was made unreasonably, without taking into account all the relevant circumstances. In particular, the Budharant Private Construction and Investment Enterprise, according to the land lease agreement registered with the Cherkasy regional branch of the State Land Cadastre Center state enterprise under No. 040677500080 of February 18, 2006, uses the land plot with the area of 34607 sq.m located at the corner of Kozatska and Heroes of the Dnieper Streets in the city of Cherkasy.
The land plot lessee’s right to farm on the plot on his/her own and develop residential, industrial, and other buildings and structures is secured by Clauses a, g of Part 1 of Article 95 of the Land Code of Ukraine, as well as clause 9.3 of the land lease agreement.
In accordance with paragraph 4 of Article 26 of the Law of Ukraine On Regulation of Town-Planning Documentation, the right to development of the land plot is implemented by its owner or user provided the land is used according to the requirements of town-planning documentation.
According to Clause 2 of Article 29 of the Law of Ukraine On Regulation of Town-Planning Activity, the Budharant Private Construction and Investment Enterprise filed a statement of intention to construct a residential development with a parking lot. The orders of the Director of the Department of Architecture and Town-Planning nos. 145, 146 of May 25, 2017, and nos. 149, 150, 151 of May 26, 2017, the Budharant Private Construction and Investment Enterprise was provided with the town-planning conditions and restrictions on the development of a land plot located at the corner of Kozatska and Heroes of the Dnieper Streets.
Part 5 of Article 29 of the Law of Ukraine On Regulation of Town-Planning Activity (as amended, applicable at the time of the issuance of orders) provides the only basis for the decision to refuse to provide town-planning conditions and restrictions: in case of inconsistency between the intentions to develop the land plot and the requirements of town-planning documentation at the local level.
The intentions to develop the land plot meet the requirements of town-planning documentation on the basis of the following.
In 2014, the Budharant Private Construction and Investment Enterprise intended to develop the land plot: the issue of provision of town-planning conditions and restrictions was the subject of consideration by the Architecture and Town-Planning Council, the authority of which was defined by Article 20 of the Law of Ukraine On Regulation of Town-Planning Activity and the Order of the Ministry of Regional Development, Construction, and Housing and Communal Services of Ukraine No. 108 of July 7, 2011, On Approval of Model Regulations on Architecture and Town Planning Councils.
– residential buildings should not be five storeys high.
Taking into account the proposals presented by the Architecture and Town-Planning Council, the Planning and Architecture Office prepared town-planning conditions and restrictions on the development of a land plot which were later approved by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014.
Cherkasy City Council had already tried to overturn the town-planning conditions: thus, on August 19, 2014, the City Council adopted the decision No. 2-56, which overturned the Executive Committee’s decision on provision of town-planning conditions to the enterprise due to (according to the City Council) their incompatibility with the law. That decision became the subject of consideration in case No. 712/17480/14-A, which was in the proceedings of the Sosnivskyi District Court of Cherkasy. The court provided a legal assessment of the City Council’s decision No. 2-56 of August 19, 2014, and, accordingly, investigated the question of legality of the provision of town-planning conditions and restrictions on the development of a land plot approved by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014.
By the ruling of the Sosnivskyi District Court of Cherkasy of March 19, 2015, in case No. 712/17480/14-A, an administrative lawsuit of the Budharant Private Construction and Investment Enterprise against Cherkasy City Council, the third person was the Department of Architecture, Town-Planning, and Inspection of Cherkasy City Council, was satisfied, there was overturned the Cherkasy City Council’s decision No. 2-56 of August 19, 2014, on the overturning by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014.
Moreover, the Architecture and Town-Planning Council, the meeting of which was held on April 26, 2017, while considering the issue of a detailed plan for the Dnieper River Embankment’s territory in Cherkasy, confirmed its conclusion regarding the pre-project proposals of the Budharant Private Construction and Investment Enterprise, namely: by clause 17 of the Architecture and Town-Planning Council’s decision No. 35 of April 26, 2017, it was decided to: provide for the grading of a number of stories of buildings in a multistoried residential building neighborhoods (Shora PE, Budharant), 12, 9, 7, 5 stories with a descend towards the reservoir).
According to the General Plan of the city of Cherkasy, approved by the Cherkasy City Council’s decision No. 3-505 of December 29, 2011, the land plot belongs to the territory of low-rise residential development and multilevel garages. According to the Zoning Plan of Cherkasy territory, approved by the Cherkasy City Council’s decision No. 2-513 of December 4, 2014, the land plot belongs to the blocked low-rise residential development zone.
Among the permissible uses of the territory (according to the explanatory note to the Zoning Plan of Cherkasy territory, approved by the Cherkasy City Council’s decision No. 2-513 of December 4, 2014), separate apartment buildings are provided (only on condition of availability of town-planning calculations or a detailed plan of the territory).
According to section 1 of General Provisions of the explanatory note to the Zoning Plan of Cherkasy territory, approved by the Cherkasy City Council’s decision No. 2-513 of December 4, 2014, the permissible use of the territory (the land plot)—is the use that does not match the list of preferential and secondary uses for a given territorial zone but may be allowed subject to a special agreement.
In accordance with Section 5.2 entitled Special Zonal Agreements of the explanatory note to the Zoning Plan of Cherkasy territory, approved by the Cherkasy City Council’s decision No. 2-513 of December 4, 2014, there was established the procedure for obtaining the special zonal agreement involving the Architecture and Town-Planning Council and the public.
Given the availability of town-planning calculations and the fact that the issue of the land plot development has been repeatedly addressed by the Architecture and Town-Planning Council, particularly in the case of a comprehensive review, together with the detailed plan of development of the river embankment in Cherkasy and the further conduct of public discussion, the positive decisions of the Architecture and Town-Planning Council were taken into account by the Department as special zonal agreements.
Regarding the issues covered in the inquiry of deputy O. R. Radutskyi, they were already the subject of consideration in case No. 925/2128/14 on the lawsuit of the Prosecutor of the city of Cherkasy on behalf of the state represented by Cherkasy City Council against the Budharant PCIE on the land lease agreement cancelation and the obligation to return the land plot, indicating that for the period from October 1, 2011, until October 31, 2014, the Budharant PCIE had been charged UAH 376,199.17 of land rent. However, in violation of the contractual obligations it undertook, the Budharant PCIE did not pay rent for that period of using the land plot. As a result, it accumulated arrears in the amount of UAH 376,199.17, also pointing out that according to the State Tax Inspectorate in the city of Cherkasy of the Principal Directorate of the Ministry of Revenue in Cherkasy Oblast, it was found that within the declared by the Respondent land plots as on September 23, 2014, there were arrears of rent under the land lease agreements in the amount of UAH 844,833.17 which continued to increase.
Thus, the covered in the lawsuit demands did not find their confirmation, in addition, the Cherkasy City Council’s representative in the court did not support the Prosecutor’s demands indicating that the City Council and the Budharant PCIE signed a settlement agreement in respect of arrears repayment. At the time of considering the case, Cherkasy City Council had no claims to the Budharant PCIE and was interested in the Budharant PCIE’s using the land plot for housing development and supplying the city budget.
Thus, at the time of considering the case No. 925/2128/14, Cherkasy City Council had no claims to the Budharant PCIE, the court evaluated the Prosecutor’s arguments and as a result, the claim was entirely dismissed.
However, by adopting the appealed decision No. 2-2313 of August 10, 2017, On Sending the Inquiry of Deputy O. R. Radutskyi, Cherkasy City Council contradicts its own statements made in the case No. 925/2128/14 and invalidates the court’s conclusions in this regard.
In accordance with Part 3 of Article 2 of the CALP of Ukraine, in cases concerning appeals against decisions, actions, or inactivity of the subjects of power, administrative courts shall check whether they have been adopted (committed): proportionally, including the observance of the necessary balance between any adverse consequences for the individual’s rights, freedoms, and interests and the objectives, this decision (action) aims to achieve.
The specified rule corresponds to the positions of the European Court of Human Rights (hereinafter referred to as the ECtHR) aimed at the protection of legal entities and individuals from violation of their rights under Article 1 of the First Protocol to the Convention (Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms). However, while adopting the decision, Cherkasy City Council did not observe the necessary balance between any adverse consequences for the individual’s rights, freedoms, and interests and the objectives, that decision aimed to achieve judging from the following.
Thus, let’s consider the ECtHR judgment in the case of Sukhanov and Ilchenko v. Ukraine (applications Nos. 68385/10 and 71378/10, in particular in the context of substantiating the admissibility of the above application: the Court reminds that under certain circumstances, the “legitimate expectation” for acquiring an “asset” may also be protected by Article 1 of the First Protocol. Thus, if the essence of the individual’s claim is related to a property right, the individual who was granted that right may be considered as having a “legitimate expectation” if there is sufficient reason for such a right in national law. These provisions also correspond with the conclusions drawn in the Kopecky v. Slovakia case, application No. 44912/98, clause 52, ECtHR 2004-IX).
– The land lease agreement was entered into by the enterprise and ChCC.
– Taking into account the proposals presented by the Architecture and Town-Planning Council, the Planning and Architecture Office prepared town-planning conditions and restrictions on the development of a land plot which were later approved by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014.
– The enterprise began development of the shoreline belt on the leased land plot in accordance with town-planning conditions and restrictions.
– On the leased land plot (at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets), they already developed a residential building, which according to the declaration was ready for operation.
The enterprise pays rent, it observes town-planning conditions and restrictions, and besides there have been started construction works at the expense of individuals. The Budharant PCIE complying with the laws of Ukraine had all the grounds for a legitimate expectation of acquiring a private property object in the form of real estate (a residential building with annexes).
By the ECtHR’s decision it was established that violation of the individual’s right provided for by legitimate expectations was protected by Article 1 of the First Protocol to the Convention, and hence legitimate and justified expectations of acquiring property or property rights in the practice of the ECtHR got legal protection as property.
In addition, according to Article 6 of the Commercial Code of Ukraine, one of the general principles of economic management in Ukraine is, in particular, the prohibition of unlawful interference by state authorities and local self-government bodies and their officials with economic relations. Part 4 of Article 23 of the Commercial Code of Ukraine prohibits unlawful interference with and obstruction of economic activities of business entities by local self-government bodies and officials.
1) On August 19, 2014, there was adopted the City Council’s decision No. 2-56, which overturned the Executive Committee’s decision on the provision of town-planning conditions to the enterprise due to (according to the City Council) their incompatibility with the law. That decision became the subject of consideration in case No. 712/17480/14-A, which was in the proceedings of the Sosnivskyi District Court of the city of Cherkasy. The court provided a legal assessment of the City Council’s decision No. 2-56 of August 19, 2014, and, accordingly, investigated the question of legality of the provision of town-planning conditions and restrictions on the development of a land plot approved by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014. By the ruling of the Sosnivskyi District Court of Cherkasy of March 19, 2015, in case No. 712/17480/14-A, an administrative lawsuit of the Budharant Private Construction and Investment Enterprise against Cherkasy City Council, the third person was the Department of Architecture, Town-Planning, and Inspection of Cherkasy City Council, was satisfied, there was overturned the Cherkasy City Council’s decision No. 2-56 of August 19, 2014, on the overturning by the decision No. 500 of the Executive Committee of Cherkasy City Council of May 14, 2014.
2) On October 3, 2014, there was accepted for hearing the lawsuit of Cherkasy City Council against the Budharant Private Construction and Investment Enterprise for the recovery of arrears under the land lease agreement of February 18, 2006 (case No. 925/1726/14). On August 13, 2015, there was adopted the Supreme Economic Court of Ukraine’s resolution on case No. 925/1726/14, containing a reference to the illegality of debt calculations. ChCC prematurely referred part of the disputed land to commercial lands and technical infrastructure. However, as stated in the lease agreement terms, for the period of development which, as established by the courts, is not yet completed, the land plot is referred to recreational lands and other open lands (lands occupied by the current development) and only after its completion, to commercial lands and technical infrastructure.
3) The ChCC’s decision No. 8-962 of December 28, 2005, On the Provision to the Budharant Private Construction and Investment Enterprise a Land Plot for Lease at the Crossroads of Kozatska and Heroes of the Dnieper Streets referred all land plots according to their main target purpose to the water fund lands. On September 27, 2016, the Sosnivskyi District Court of Cherkasy issued a decision on the opening of proceedings in an administrative lawsuit of the Budharant PCIE against Cherkasy City Council on the subject of power’s obligation to implement activities (case No. 712/10864 /16A). On October 10, 2016, the Sosnivskyi District Court adopted the resolution on case No. 712/10864 /16A in which the court came to the conclusion that the land plot leased by the Cherkasy City Council’s decision No. 8-962 of December 28, 2005, to the Budharant Private Construction and Investment Enterprise with an area of 34,607 square meters at the crossroads of Kozatska and Heroes of the Dnieper Streets for 49 years for siting and further exploitation of a hotel complex was mistakenly entirely referred to the water fund lands (the shoreline belt) and therefore, there was a need to amend the specified decision as due to the indicated error it was impossible to use the main part of the land plot for the purposes for which it had been provided, namely: for siting and further exploitation of a hotel complex.
4) the decisions adopted on August 10, 2017, at the thirty-third regular plenary meeting of the second session of Cherkasy City Council that directly violate Article 1 of the First Protocol to the Convention (the evidence of a violation is indicated above).
Thus, there is definitely unlawful interference of the local self-government body with the enterprise’s economic activities. Besides, this unlawful interference, while being systematic is still inconsistent, thus making it impossible to comprehend the ChCC’s motives and its end objective concerning depriving the enterprise of the right to legitimate expectations to acquire the property.
In addition, the judicial practice of the ECtHR, in particular, the case of Ukraine-Tyumen v. Ukraine (Application No. 22603/02), reveals the notion of proportionality of interference with the right to peaceful possession of property. The court reminds that interference with the right to peaceful possession of property must be performed observing a “fair balance” between the requirements of the general interest of society and the requirements of protection of the individual’s fundamental rights (see, among others, the decision in the case of Sporrong and Lonnroth v. Sweden of September 23, 1982, Series A no.52, p.26, paragraph 69). The requirement to achieve such balance is reflected in general in the construction of Article 1 of the First Protocol (994_535), including the second sentence, which should be understood in the light of the general principle set forth in the first sentence. In particular, there must be a reasonable proportionate correlation between the means employed and the objective one tries to achieve by any measure aimed at depriving the person of his/her property (see the decision in the case of Pressos Compania Naviera, S.A. and Others v. Belgium) of November 20, 1995, Series A no. 332, p. 23, paragraph 38).
Therefore, if the ChCC’s objective is to get funds from using the land plot leased by the enterprise (the land on which the enterprise legitimately expects to create the property object), the land lease agreement cancelation clearly will not contribute to supplying the city budget, as rent will no longer be paid. As is known, the Budharant PCIE pays rent, makes payments in accordance with the settlement agreement signed with ChCC, as well as repays arrears established by the courts. That is, an economic factor cannot be the objective according to which ChCC seeks to unilaterally cancel lease agreements.
If ChCC wants the leased by the enterprise land plots to be effectively used, the extremity of land lease agreement cancelation (as stated in the inquiry of deputy O. R. Radutskyi which contains the requirement to apply to the court for canceling the land lease agreement with the enterprise due to the motives of a systematic failure to fulfill the agreement terms) will on the contrary result in freezing the development and will indefinitely halt implementation of town-planning documentation.
The ECtHR position on this issue is as follows.
The court emphasizes the particular importance of the “proper governance” principle. It provides that in the case when it comes to questions of general interest, particularly if the case affects such fundamental human rights as property rights, the authorities must act in a timely, proper, and maximally consistent manner (see the decisions in the cases of Beyeler v. Italy [GC]), application No. 33202/96, cl. 120, ECHR 2000-I, Oneryildiz v. Turkey [GC], application No. 48939/99, cl. 128, ECHR 2004-XII, Megadat.com S.r.l. v. Moldova, no. 21151/04, cl. 72, of April 8, 2008, and Moskal v. Poland, application No. 10373/05, cl. 51, of September 15, 2009). In particular, the authorities are entrusted with the obligation to establish internal procedures that will enhance the transparency and clarity of their actions, minimize the risk of errors (see, for example, the decisions in the cases of Lelas v. Croatia, application No. 55555/08, cl. 74, of May 20, 2010, and Toscuta and Others v. Romania, application No. 36900/03, cl. 37, of November 25, 2008) and contribute to legal certainty in civil matters, affecting property interests (see the above decisions in the cases of Oneryildiz v. Turkey, cl. 128, and Beyeler v. Italy, cl. 119).
Practice of relations between the Budharant PCIE and ChCC shows that there is neither consistency of actions nor internal procedures that guarantee the transparency and clarity of the local self-government body’s actions.
Moreover, there is no legal certainty in civil matters.
A) The Budharant PCIE: to continue the economic activities on the leased land plot (or the adoption of the petition has already canceled that agreement).
B) The Budharant PCIE: to carry out the development according to existing town-planning conditions and restrictions (or they have been overturned).
C) Individuals, at whose expense the development is carried out: in the future, to obtain the results of their activities (to register property rights to real estate).
As ChCC hastily adopted without clearly defined authority three illegal unjustified decisions without involving profile specialists and the business entity the specified decisions directly relate to, it has committed disproportionate interference with the Budharant PCIE’s economic activities, creating the illusion of protecting individual citizens from the shoreline belt development, not taking into consideration violation of real rights of individuals at whose expense the development was carried out.
In addition, of particular note is the fact that on August 10, 2017, Cherkasy city councilors adopted the decision No. 2-2322 On Agreement on Free Transfer in Ownership of the Territorial Community of the City of Cherkasy of External Engineering Networks to Residential Houses No. 126 along Smilianska and No. 8 along 30-richchya Peremohy Streets which provided for the free transfer in ownership of the city territorial community of external engineering networks for a total amount of UAH 2,366,499 (two million three hundred and sixty-six thousand, four hundred and ninety-nine). It should be noted that those engineering networks have been laid by the Budharant PCIE for the completion of the final stages of development. As stated above, the enterprise has already registered with the State Architectural and Construction Supervision Authority of Cherkasy City Council the declaration of the readiness for operation of the objects belonging to the category of complexity І–ІІІ under Nos. СhK143163562194 and ChK 143171590130. The objects are located on the leased land plot at the crossroads of 126 Smilianska and 8 30-richchya Peremohy Streets.
The appealed decision No. 2-2313 of August 10, 2017, On Sending the Inquiry of Deputy O. R. Radutskyi demanded to cancel the agreement with the Budharant PCIE on lease of the land plot at the crossroads of 126 Smilianska and 30-richchya Peremohy Streets. However, during the adoption, they did not take into account the fact that the houses (development of which was financed at the expense of individuals’ assessed contributions) were ready for operation.
Also, Cherkasy City Council while adopting the decision No. 2-2322 On Agreement on Free Transfer in Ownership of the Territorial Community of the City of Cherkasy of External Engineering Networks to Residential Houses No. 126 along Smilianska and No. 8 along 30-richchya Peremohy Streets failed to consider the already adopted decision on the land lease agreement cancellation.
According to Part 3 of Article 2 of the CALP of Ukraine, in cases concerning appeals against decisions, actions, or inactivity of the subjects of power, administrative courts shall check whether they have been adopted (committed): taking into account the individual’s right to participate in the decision-making process. Taking the appealed decisions, the Respondent did not ensure the Budharant PCIE’s participation in the decision-making process that led to the gross violation of the Complainant’s right, depriving it of the opportunity to express its position and provide relevant approval documents substantiating the legitimacy of its actions.
Thus, there were adopted actually three consecutive decisions aimed at interfering with the Complainant’s economic activities, without its participation, without proper justification, without the Respondent’s proper authority to make such decisions, that indicated the Respondent’s obvious proprietary interest and the political put-up job.
The appealed decisions violate the subjective right and the legally protected Complainant’s interest regarding the development of the land plot transferred to the lessee by the same local self-government body particularly for the needs of development.
It should be noted that at the time of adopting the appealed decisions, the Complainant had already registered the declaration on the beginning of construction works and actually started those works for the Complainant was acting within the current legislation. Instead, by the appealed decisions, the Respondent has so far created legal uncertainty for the Complainant and the impossibility of lawful use of the mentioned above land plot for its intended purpose.
Given the above, the appealed decisions are contrary to the current legislation as are adopted without the Respondent’s proper authority, violate the norms contained in the decision of the Constitutional Court of Ukraine, are unmotivated and deprived of proper legal grounds, and lead to the violation of the rights of the land plot lessee.

References: v. 
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 application No. 44912
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 application No. 33202
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 application No. 48939
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 application No. 10373
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 application No. 55555
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 application No. 36900
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