FIFTH SECTIONCASE OF BRYG-A, TOV v. UKRAINE(Applications nos. 75237/10 and 75295/10)    JUDGMENT(Merits)STRASBOURG9 December 2021 This judgment is final but it may be subject to editorial revision.In the case of Bryg-A, TOV v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Committee composed of: Mārtiņš Mits, President, Jovan Ilievski, Ivana Jelić, judges,and Martina Keller, Deputy Section Registrar,Having regard to:the applications (nos. 75237/10 and 75295/10) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Bryg-A, TOV, a limited liability company registered in Ukraine (“the applicant company”), on 2 December 2010;the decision to give notice to the Ukrainian Government (“the Government”) of the complaints under Articles 6 § 1 and 13 of the Convention and Article 1 of Protocol No. 1 regarding the conduct and outcome of the proceedings concerning the applicant company’s title to a land plot and to declare the remainder of the applications inadmissible;the parties’ observations;the decision to reject the Government’s objection to examination of the applications by a Committee;Having deliberated in private on 18 November 2021,Delivers the following judgment, which was adopted on that date:INTRODUCTION1. The applications concern allegedly defective court proceedings resulting in the allegedly unlawful and disproportionate revocation of the applicant company’s title to a land plot, which had been transferred to it by a State body erroneously. The applicant company complained of a violation of Articles 6 § 1 and 13 of the Convention and Article 1 of Protocol No. 1.THE FACTS2. The applicant company was represented by different lawyers, most recently by Mr I. Kravtsov, a lawyer practising in Kyiv.3. The Government were represented by their Acting Agent, Ms O. Davydchuk, of the Ministry of Justice.4. The facts of the case, as submitted by the parties, may be summarised as follows.5. In November 1999 the Sevastopol town administration transferred, under permanent lease, a land plot to the applicant company for the construction of recreation facilities on that land, which it started in 2001 having obtained the official permission of the State building inspectors.6. On 12 September 2003 the town administration sold the major part of that land to the applicant company for 436,372 Ukrainian hryvnias ((UAH), the equivalent of around 70,000 euros (EUR) at the material time). The remaining (unsold) part of the land remained in the applicant company’s possession pursuant to the above-mentioned lease (see paragraph 5 above). Those titles were duly registered in 1999 and 2003 respectively.7. In December 2003 and February 2004 the Sevastopol prosecutor’s office challenged the contract of 12 September 2003 before the commercial courts, but its actions were rejected as inadmissible.8. In June 2006 a State company, I., controlled by the Ministry of Coal Industry, challenged the sale contract and, subsequently, the legal measures regarding the transfer of the land to the applicant company in 1999 and 2003, before the Sevastopol Commercial Court, under the Code of Administrative Justice of 2004. In August 2006 the Sevastopol prosecutor’s office joined the proceedings on the part of I. In the end, the claim regarding the validity of the contract was not examined in that set of proceedings. Those proceedings culminated in a final decision of the Higher Administrative Court of 1 July 2010 upholding decisions by the lower courts of 22 August and 29 September 2008, by which the legal measures regarding the transfer of the land to the applicant company in 1999 and 2003 were annulled.9. In April 2008 the First Deputy Prosecutor of Sevastopol lodged, on behalf of the Ministry of Coal Industry and I., a claim with the Kyiv Commercial Court, seeking the invalidation of the sale contract. That set of proceedings culminated in a final decision of the Higher Commercial Court of 17 August 2010 upholding the decisions by the lower courts of 20 October and 18 December 2008, by which the sale contract was declared void.10. In both sets of proceedings, the courts allowed the claims mainly for the following reasons: before its transfer in 2003, the disputed land plot had belonged to a State company, U., controlled by the Ministry of Coal Industry; the Sevastopol town administration had had no power to dispose of it; the sale of the land had not been in accordance with the relevant procedures; the land belonged to a specially protected category and thus could not be transferred to private persons; and the prosecutors’ intervention in the proceedings had been necessary for the protection of related State interests. The courts also found that the relevant one-year and three-year limitation periods had been missed by I. and the prosecutors respectively, for justifiable reasons – I. had not been created by the Ministry of Coal Industry until December 2005, following the reorganisation of U., and the prosecutors had had to wait for the outcome of the first set of proceedings (see paragraph 8 above) which had been decisive for their action lodged in April 2008 (see paragraph 9 above).11. Since February 2007 I. has allegedly denied the applicant company access to the land in question and to the cottages, the construction of which was unfinished, but the ownership title to which the applicant company retained, as evidenced by a judgment of the Sevastopol Commercial Court of 7 November 2013, adopted in a different set of proceedings not directly related to the present case. According to the expert reports provided by the applicant company, in February 2007 the land plot was valued at UAH 16,860,290 (the equivalent of around EUR 2,468,000 at the material time) and the unfinished cottages were valued at UAH 3,843,900 (the equivalent of around EUR 563,000 at the material time).12. According to a judgment of the Kharkiv Regional Commercial Court of 11 March 2008 in another set of proceedings, not directly related to the present case, in February 2008 the land plot in question was valued at about UAH 9,000,000 (the equivalent of about EUR 1,200,000 at the material time).THE LAWJOINDER OF THE APPLICATIONS13. Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.ALLEGED VIOLATION OF ARTICLE 1 of protocol No. 114. The applicant company complained that it had been unlawfully and disproportionately deprived of the land it had obtained from the State in 1999 and 2003 and that consequently it had not been able to access or to use the unfinished cottages it had been constructing on that land. It relied on Article 1 of Protocol No. 1, which reads as follows:“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”Admissibility15. The Court dismisses the Government’s objection that the applicant company had failed to exhaust domestic remedies as regards its complaint of the deprivation of the land plot, for having not sought the return of the money it had paid for it under the 2003 sale contract, pursuant to Article 48 of the Civil Code of 1963. That procedure could not have led to a reinstatement of the lost title to the land in question, but it may be material to the assessment of whether the alleged deprivation respected the requisite fair balance under Article 1 of Protocol No. 1 (see paragraph 22 below, and Ukraine-Tyumen v. Ukraine, no. 22603/02, § 57, 22 November 2007, and Batkivska Turbota Foundation v. Ukraine, no. 5876/15, § 47, 9 October 2018, with further references).16. The Court also rejects the same Government objection to the applicant company’s complaint of the loss of access to the unfinished cottages on that land, since the Government did not demonstrate that the procedure that they referred to above could have led to any compensation in that regard.17. Furthermore, the Court considers that the alleged lack of access to the unfinished cottages, the ownership title to which the applicant company retained (see paragraph 11 above), is intrinsically linked to, and cannot be disassociated from, the above-mentioned issue of the deprivation of the land plot on which the unfinished cottages stood. In the circumstances of the present case, it should be seen as part of the negative consequences that that deprivation entailed.18. On the whole, the Court finds that the applicant company’s complaints under Article 1 of Protocol No. 1 are neither manifestly ill‑founded nor inadmissible on any other grounds listed in Article 35 of the Convention. They must therefore be declared admissible.Merits19. The relevant general principles under Article 1 of Protocol No. 1 applicable to instances of deprivation of property, which, as the parties agreed, had happened in this case, were summarised in, among other authorities, Kryvenkyy v. Ukraine (no. 43768/07, §§ 41, 42 and 45, 16 February 2017).20. In the present case, the deprivation of the applicant company’s land plot, including the part which the applicant purchased in 2003 and the part regarding which it had the right of permanent lease (see paragraph 6 above), had a basis in domestic law, references to specific legal provisions having been made in the court decisions at issue (see paragraph 10 above). Furthermore, it pursued the legitimate aims also cited in those court decisions: in particular, the public interest of rectifying the mistake of a State body acting beyond its competence through the doctrine of ultra vires, and the environmental interests linked to the status of specially protected land.21. As to the proportionality of that deprivation, the Court notes that the applicant company acquired and possessed the land in good faith, without knowing that the Sevastopol town administration had had no power to transfer it, and thus had not had to bear all the negative consequences for the mistake committed by that body (see Tomina and Others v. Russia, nos. 20578/08 and 19 others, § 39, 1 December 2016). As demonstrated by the material before the Court, the interference seriously affected, if not completely precluded, the pursuit of the applicant company’s business plan to construct and to use the cottages on that land as recreational facilities (see paragraphs 5 and 11 above).22. The parties agreed that the applicant company could have sought the return of the money that it had paid for the land in 2003, pursuant to Article 48 of the Civil Code of 1963. However, there is no indication of any legitimate considerations justifying the limitation of the terms of compensation in this case to the return of the sale contract price, rather than a provision for the payment of an amount reasonably related to the value of the land, which at the time of the proceedings concerning the revocation of the applicant company’s title in 2008 was substantially higher than the amount that the applicant company had paid in 2003 (see paragraphs 11 and 12 above and, among other authorities, Scordino v. Italy (no. 1) [GC], no. 36813/97, §§ 95-98, ECHR 2006‑V, with further references).23. Nor was any information submitted to the Court demonstrating that in the circumstances of the present case the applicant company had had a real opportunity to seek compensation for any additional losses it had incurred because of the deprivation at issue, in particular the losses relating to its investment in the construction of the cottages on that land. The Government’s argument that this was possible pursuant to the general provisions of Article 56 of the Constitution and Article 1166 of the Civil Code of 2003 guaranteeing compensation for damages caused by unlawful decisions or actions by, inter alia, State bodies (those provisions were summarised in Gusev v. Ukraine, no. 25531/12, § 16, 14 January 2021, and Batkivska Turbota Foundation, cited above, § 37, respectively) is couched in general terms and is not supported by any relevant examples from domestic practice. Furthermore, in a comparable case, the Court held that the recourse to the procedure under Article 1166 of the Civil Code of 2003 would have placed an excessive burden on the applicant in that case, and that any compensation the applicant could have received would be relevant for the evaluation of its losses, potentially for the purposes of Article 41 of the Convention (see Batkivska Turbota Foundation, cited above, § 63).24.

Article of the Convention at issue: Article 1
Outcome: violation