FIFTH SECTIONCASE OF AZALIYA, TOV AND OTHERS v. UKRAINE(Applications nos. 31211/14 and 31338/14)      JUDGMENT STRASBOURG9 March 2023 This judgment is final but it may be subject to editorial revision.In the case of Azaliya, TOV and Others v. Ukraine,The European Court of Human Rights (Fifth Section), sitting as a Committee composed of: Carlo Ranzoni, President, Mattias Guyomar, Mykola Gnatovskyy, judges,and Martina Keller, Deputy Section Registrar,Having regard to:application no. 31211/14 against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 14 April 2014 by a limited liability company registered in Ukraine (“the first applicant company”), which was represented before the Court by Mrs H. Ovdiienko and Mrs T. Bespala, lawyers practising in Kharkiv;application no. 31338/14 against Ukraine lodged with the Court under Article 34 of the Convention on 14 April 2014 by a single-member private company registered in Ukraine (“the second applicant company”) and its sole member and owner, Mrs Marina Maminashvili (“the individual applicant”), a Ukrainian national, both represented before the Court by Mr A. Kristenko, a lawyer practising in Kharkiv;the decision to give notice of the complaint under Article 1 of Protocol No. 1 to the Convention to the Ukrainian Government (“the Government”), represented by their acting Agent, Mrs O. Davydchuk, and to declare the remainder of the applications inadmissible;the parties’ observations;Having deliberated in private on 9 February 2023,Delivers the following judgment, which was adopted on that date:SUBJECT MATTER OF THE CASE1.  Both applications concern the demolition by the State authorities of buildings owned by the applicant companies and used by them for running their commercial activities (a café and a shop). The applicant companies complained that the interference with their property had been unlawful and unjustified. They relied on Article 1 of Protocol No. 1 to the Convention.2.  The buildings in issue were constructed in the 1970s and located at “Kinnyy” marketplace in Kharkiv. In 1995 and 1994 respectively the applicant companies’ predecessors bought the buildings from the State and were issued property certificates accordingly. In January 2003 and December 2006, after the predecessors were reorganised into the applicant companies, the Kharkiv Technical Inventory Bureau issued an official certificate (“technical passport”) for the buildings in which the first and the second applicant company respectively were stated to be the owners.3.  Until 2011 (application no. 31211/14) and 2010 (application no. 31338/14) the applicant companies rented the land plots occupied by the buildings at issue from the municipal authorities, under a signed lease which was extended. The lease contracts suggested that the aim of the lease was to ensure the maintenance and proper functioning of the café and shop which were located in the buildings. After 2010 the municipal authorities refused numerous requests from the applicant companies for extensions to their leases, referring to the need to reconstruct the area as part of their urban development plan. The applicant companies were repeatedly ordered to vacate the land plots as they no longer had a right to use them and to demolish the buildings as unauthorised constructions. The applicants’ refused, claiming that the orders were in breach of their property rights and requesting to prolong the lease contracts. The last order to vacate the land was issued to the applicant companies on 7 November 2012 and required that the buildings belonging to them be demolished by 6 p.m. on 8 November 2012 at the latest.4.  On the same date, 7 November 2012, the City Council passed decision no. 679 on urban renewal, in which it ordered the relevant municipal authority to have some “unauthorised constructions” removed from the city. The buildings owned by the applicant companies were included in a list of “unauthorised constructions” attached to that decision. On the same date according to the official documents the buildings at issue were demolished by the authorities. The certificates of demolition referred to decision no. 679 of the City Council as the legal basis for the destruction of the buildings.5.  The applicant companies challenged the lawfulness of City Council decision no. 679, in so far as it concerned their properties, as well as the demolition itself before the Kominternivskyy District Court of Kharkiv (“the District Court”). They claimed compensation for the demolished property.6.  On 19 September 2013 the District Court found the demolition to be lawful. Having established that the applicant companies had been the lawful owners of the buildings, the District Court found that they had been using the land without any legal right to do so as their leases had come to an end. It therefore concluded that the local authorities, which had the power to exercise control over the use of the city land, had acted lawfully when they cleared the plots of the constructions which stood on them. It relied on the Law on Local Self-government and the Law on the Improvement of Human Settlements («Про благоустрій населених пунктів»).7.  On 25 November 2013 the Kharkiv Administrative Court of Appeal (“the Court of Appeal”) upheld the judgment of 19 September 2013 and the reasoning given by the first-instance court. With respect to the applicant companies’ complaint that the buildings at issue had been destroyed in breach of their property rights, the Court of Appeal noted that the Civil Code of 2003 provided that the right of ownership was subject to State registration and that the applicant companies had failed to duly register their property rights in accordance with the procedure provided for by the Code.8.  The applicant companies lodged appeals on points of law against the judgment of 19 September 2013, arguing that they had been unlawfully deprived of their property and submitting, among other things, that their property rights had been duly registered in accordance with the procedure valid at the time of purchase and required no re-registration.9.  On 26 December 2013 the Higher Administrative Court rejected the applicant companies’ request for leave to appeal in cassation, stating in a general way that there had been no evidence of a breach of material law or procedural law by the lower courts.10.  The applicants complained that there was no legal basis for declaring the buildings at issue to be unauthorised constructions and that their demolition on the basis of City Council decision no. 679 of 7 November 2008 had been contrary to Article 1 of Protocol No. 1.THE COURT’S ASSESSMENTPreliminary procedural pointsJoinder of the applications11.  Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.Mrs Maminashvili’s victim status12.  The applicant Mrs Maminashvili lodged the above complaint on her own behalf and on behalf of the applicant company. The Court reiterates in this connection that the sole owner of a company can claim to be a “victim” within the meaning of Article 34 of the Convention where the impugned measures were taken in respect of his or her company (see, among other authorities, Ankarcrona v. Sweden (dec.), no. 35178/97, ECHR 2000-VI, and Glas Nadezhda EOOD and Anatoliy Elenkov v. Bulgaria, no. 14134/02, § 40, 11 October 2007).13.  Turning to the facts of the present case, the Court finds no reason to depart in the present case from its case-law cited above and considers that Mrs Maminashvili may claim to be a victim of a violation.ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 to THE CONVENTION14.  The applicant companies submitted that they had held duly registered title to the buildings at issue. For more than fifteen years, they had openly and in good faith possessed them and lawfully used the land they stood on, until the authorities refused on various pretexts to extends the leases and ordered the demolition of the buildings as unauthorised constructions. According to the applicant companies, “the public interest” referred to by the authorities in this connection was a false reason since it transpired that the land on which the “Kinnyy” marketplace stood had not been redeveloped but sold to a private company.15.  The Government acknowledged that the applicant companies had been the owners of the buildings at issue and that there had been interference with the applicant companies’ possessions. They stressed, however, that the applicant companies’ right to occupy the land their buildings stood on had been temporary and tenuous. Therefore, the demolition of the structures on the land after the expiry of the leases had to be seen as a measure of control of the use of property rather than deprivation. The action had been lawful and in the public interest of developing urban engineering and transport infrastructure.16.  The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.17.  The general principles concerning protection of property are well established in the Court’s case-law and have been summarised in, among other authorities, Kryvenkyy v. Ukraine (no. 43768/07, §§ 41, 42 and 45, 16 February 2017).18.  It is common ground between the parties that the buildings at issue constituted the applicant companies’ possessions and that their demolition amounted to interference with the applicant companies’ rights as set out in Article 1 of Protocol No. 1 to the Convention. Even though the Court of Appeal appears to have expressed doubts as to the applicant companies’ title to the buildings at the time of the demolition (see paragraph 7 above), the Government have acknowledged that the buildings at issue were indeed the property of the applicant companies, and the certificate of ownership issued by the authorities supports that position (see paragraphs 2 and 15 above). The Court sees no reason to hold otherwise.19.  In the circumstances of the present case, regard being had to its case‑law and the analysis below, the Court considers that the applicable rule is the one concerning the deprivation of property (see Svitlana Ilchenko v. Ukraine, no. 47166/09, §§ 60-64, 4 July 2019).20.  Turning to the issue of the lawfulness of the interference, the Court finds it difficult to accept the Government’s contention that the buildings owned by the applicant companies were lawfully destroyed, for the following reasons.21.  It is suggested by the available documents that the buildings owned by the applicant companies were demolished on the basis of the decision of the City Council of 7 November 2012, which treated the applicant companies’ property as “unauthorised constructions”. The Court notes in this connection that Article 376 of the Civil Code, as in force at the relevant time, provided that the construction of a building was deemed to be unauthorised if it was built on a plot which had not been allotted to the person who was carrying out the construction; or it was allocated for a different purpose; or if there was no appropriate document granting the right to carry out construction works or works in accordance with an approved project; or if it was significantly in breach of building standards and regulations. The same Article provided that a person who had undertaken the unauthorised construction of immovable property did not acquire title to it.22.  However, the buildings were bought from the State in the 1990s; they had already been constructed, and it has never been suggested by the authorities that any law was broken in the construction of the buildings. The State authorities issued property certificates to the applicant companies confirming their private ownership of the buildings and those certificates were never revoked. Moreover, the lease contracts specifically stated that the land was allotted to the applicant companies for the purpose of maintaining and operating the café and the shop which were located in the buildings (see paragraph 3 above). Thus, at the time of the delivery of decision no. 679 the City Council was aware that the applicant companies were the lawful owners of the buildings at issue and that the destruction of the buildings would interfere with their property rights and cause damage to the applicant companies. In such circumstances it is difficult to see how, at the time of its issuance, the City Council’s decision of 7 November 2012 could properly describe the buildings belonging to the applicant companies as “unauthorised constructions”. The fact that the land was in municipal ownership and the leases had come to an end did not invalidate the applicant companies’ property title over the buildings, which had been properly established and independent from the title to the plot of land. The Court observes in this connection that neither the Government nor the domestic courts referred to any domestic legal provision designating the City Council as the authority or one of the authorities having the power to take decisions on the expropriation of privately owned property. The Court has been unable to identify any such domestic legislation on its own.23.  Moreover, in accordance with section 38 of the Law on the Regulation of Urban Development («Про регулювання містобудівноі діяльності»), even in the case of unauthorised constructions their destruction can be ordered only by a court, following a request from the relevant State authority, which must be executed by the court bailiffs. Article 212 of the Land Code provided further that the return of an unlawfully occupied land plot was to be carried out on the basis of a court order. It has not been shown by the Government that any such court decision was obtained by the City Council or that the procedure prescribed by the law was followed in the applicants’ cases.24.  Having regard to the above, the Court considers that the destruction of the applicants’ property by the domestic authorities was devoid of any legal basis and incompatible with the principle of the rule of law. This conclusion makes it unnecessary to examine whether the other requirements of Article 1 of Protocol No. 1 were complied with in the instant case (see, for example, Par and Hyodo v. Azerbaijan, nos. 54563/11 and 22428/15, § 58, 18 November 2021).25.  There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.APPLICATION OF ARTICLE 41 OF THE CONVENTION  The parties’ submissionsThe applicants(a)   The case of Azaliya26.  The first applicant company claimed the value of the property – which an expert commissioned by it estimated at Ukrainian hryvnias (UAH) 2,073,058.00 (about euros (EUR) 64,500) in 2021 – plus EUR 7,156.89 for the equipment which had been destroyed together with the building, in respect of pecuniary damage. It provided a property valuation report dated 27 July 2021 and receipts for the purchase of equipment. The first applicant company further claimed EUR 10,000 in respect of non-pecuniary damage suffered by its management on account of the unlawful destruction of the company’s property and the disruption of its business.(b)   The case of Maminashvili and Yupiter27.  The second applicant company claimed 115,000 United States dollars (USD) in respect of pecuniary damage. This included compensation for the value of the building – which it estimated at USD 100,000 – plus USD 15,000 for the equipment and goods which had been destroyed together with the buildings. The second applicant company submitted a valuation report dated 13 July 2021 which it had commissioned from an expert bureau. According to the report, the potential market value of the building on the date of assessment was UAH 799,000 (about EUR 24,200 in July 2021 and USD 96,000 in November 2012 (the currency exchange rate apparently used by the second applicant company)). Mrs Maminashvili claimed EUR 20,000 in respect of non-pecuniary damage, alleging that the demolition of her company’s property had ruined her business and caused her stress and frustration. Lastly, the applicants claimed UAH 167,000 (about EUR 5,200) for legal assistance before the Court.The Government28.  The Government considered that the demolition had been lawful and that there was therefore no call to award damages to the applicants. However, even if compensation were to be awarded, the valuation reports provided by the applicant companies were, in their view, not reliable as they referred to the potential value of the property in 2021, and not at the time of its demolition, and did not take dilapidations into account. The Government suggested in that connection that reopening the proceedings at the domestic level would constitute the most appropriate way to redress the consequences of any violation of the applicant companies’ rights.The Court’s assessment29.  The Court reiterates that illegal and arbitrary dispossessions of property justify restitutio in integrum and, in the event of non-restitution, payment of the up-to-date full value of the property (see Papamichalopoulos and Others v. Greece (Article 50), 31 October 1995, Series A no. 330‑B, and Brumărescu v. Romania (just satisfaction) [GC], no. 28342/95, ECHR 2001-I).30.  In the present case, restitutio in integrum is not possible because the buildings at issue have been demolished. It follows that the respondent Government must compensate the applicant companies for their current value.31.  The Court notes that the applicants submitted valuations of the potential value of the demolished buildings, based on constructions of comparable technical characteristics and age. The reports include details of the methodology used and references to other relevant data. The Government, for their part, failed to submit any estimation of the value of the buildings, opting instead to ask the Court not to make an award.32.  In these circumstances, to avoid the applicants sustaining yet further disadvantage resulting from the passage of time were the matter to be reserved by this Court or re-examined by the domestic courts, as proposed by the Government, the Court considers it appropriate to award damages on the basis of the assessment reports provided by the applicant companies.33.  The Court will disregard the value of the equipment allegedly lost due to the demolition of the café and the shop as, quite apart from the lack of evidence proving that the equipment was indeed there at the moment of destruction, there is nothing to suggest that the applicants raised this issue before the domestic authorities.34.  The Court thus awards EUR 64,500 to Azaliya, TOV and EUR 24,200 to Yupiter, PP as compensation for the pecuniary damage sustained.35.  Having regard to the circumstances of the case and its case‑law concerning claims for non-pecuniary harm made on behalf of legal persons or organisations (see Centro Europa 7 S.R.L. and di Stefano v. Italy [GC], no. 38433/09, § 221, ECHR 2012, and Supreme Holy Council of the Muslim Community v. Bulgaria, no. 39023/97, § 116, 16 December 2004, with further references), the Court considers it appropriate to award Azaliya, TOV and Mrs Maminashvili EUR 3,000 each in respect of non‑pecuniary damage.36.  Finally, having regard to the documents in its possession and ruling on an equitable basis, the Court considers it appropriate to award Mrs Maminashvili, who signed the contract for legal assistance, EUR 1,000 for the costs and expenses incurred in the proceedings before the Court, plus any tax that may be chargeable to her, and dismisses the remainder of the claim under this head.FOR THESE REASONS, THE COURT, UNANIMOUSLY,Decides to join the applications;Declares the applications admissible;Holds that there has been a violation of Article 1 of Protocol No.1 to the Convention;Holds(a)  the respondent State is to pay the applicants, within three months, the following amounts, to be converted into the currency of the respondent State at the rate applicable at the date of settlement:(i)  EUR 64,500 (sixty-four thousand five hundred euros), plus any tax that may be chargeable, to Azaliya, TOV in respect of pecuniary damage;(ii)  EUR 24,200 (twenty-four thousand two hundred euros), plus any tax that may be chargeable, to Yupiter, PP in respect of pecuniary damage;(iii)  EUR 3,000 (three thousand euros), plus any tax that may be chargeable, each to Azaliya, TOV and Mrs Maminashvili, in respect of non-pecuniary damage;(iv)  EUR 1,000 (one thousand euros), plus any tax that may be chargeable to her, to Mrs Maminashvili in respect of costs and expenses;(b)  that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;Dismisses the remainder of the applicants’ claim for just satisfaction.Done in English, and notified in writing on 9 March 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Martina Keller  Carlo Ranzoni Deputy Registrar President