Published on 9 October 2023

FOURTH SECTION

Application no. 67094/17 OOO ALUPKA REZORT against Russia and 2 other applications (see list appended) communicated on 6 September 2023

SUBJECT MATTER OF THE CASE

The applications originate from the conflict between Ukraine and the Russian Federation. They concern lease rights to a number of properties located in various parts of Crimea.

Between 2005 and 2007 the Ukrainian local authorities leased the properties in question to the applicants. Thus, in applications nos. 67094/17 and 3573/22 the applicant companies concluded land lease agreements (for 49 years in each case) for the construction of an apartment building in the first case and for the construction of a hotel and a water park in the second case. In application no. 36962/19 the applicant had initially leased for three years a café building which he later reconstructed; the term of his lease was renewed on several occasions up to its expiry on 22 May 2015.

When the Russian Federation asserted its jurisdiction over Crimea in 2014 all public property that had been nominally owned by the Ukrainian state, regional, and local authorities was declared to constitute the property of the Russian authorities pursuant to, in particular, the “Decree of the Supreme Council of the Autonomous Republic of Crimea of 17 March 2014 on independence of the Republic of Crimea” and subsequent normative instruments. The Federal Constitutional Law of the Russian Federation No. 6-FKZ of 21 March 2014 (hereinafter referred as “6-FKZ”), which formalised the assertion of Russian jurisdiction over Crimea under Russian law, provided for transitional arrangements aimed at homogenising the regulation of, among other things, property and land rights and relations in Crimea with the legal regime established in the Russian Federation. These transitional arrangements were subsequently extended several times and are to be partially in force until 1 January 2025.

The “Law of the Republic of Crimea no. 38-ZRK of 31 July 2014 on particularities of legal regulation of property and land issues”, which was adopted as part of such arrangements, guaranteed continuity of the rights to the lease of land acquired by private individuals under Ukrainian law prior to the entry into force of the 6-FKZ. It obliged the Russian authorities to re-conclude the lease agreements with the users of land who have previously been leasing it from the respective Ukrainian authorities. The terms of lease were to be applied in part where they did not contradict the provisions of Russian law, with the parties’ being given additional time, until 1 January 2020, to remove any such contradictions.

In application no. 67094/17 the applicant company applied to the Russian authorities in 2015 for the re-conclusion of its land lease agreement. The authorities rejected its request, claiming that the borders of the land plot did not comply with the Big Yalta town planning documentation of 1993. As this decision effectively ended the lease, the applicant company challenged it in courts. Its claim and subsequent appeals were rejected by the Russian courts.

In application no. 36962/19 the applicant requested the Russian authorities, upon the expiry of his lease in 2015, to compensate him for the reconstruction of the leased café. Having received their rejection, the applicant challenged it in court and requested compensation. His claim was partially allowed by the court of first instance, but then rejected on appeal and at both levels of cassation. They reasoned that the reconstruction had not been properly approved by the café owner and that the lease agreement had not provided for compensation.

In application no. 3573/22 the Russian authorities sued the applicant company in 2017 for its failure to pay the rent since 15 May 2016. They claimed a repayment of its debt with fines and an early termination of the land lease agreement. The applicant company, having partially admitted to the debt, stated in its defence that, as a Ukrainian legal entity, it had been prevented by the Ukrainian Government from making bank transfers to the Russian authorities in Crimea. The Russian courts allowed the claim, ordered the applicant company to repay the debt and fines, and terminated the land lease agreement.

Relying on Article 1 of Protocol No. 1 of the Convention the applicant companies in applications nos. 67094/17 and 3573/22 argue that the termination of their long-term lease agreements, ordered by the Russian authorities in the first case and by the Russian courts in the second case, constituted de facto expropriation of their property. According to them, these measures were arbitrary, did not pursue a legitimate aim and were not provided by law.

In application no. 36962/19 the applicant argues that the refusal of the Russian courts to accept his claim for compensation constituted de facto expropriation of his property. He relies on Article 1 of Protocol No. 1 of the Convention in this regard.

QUESTIONS TO THE PARTIES

1. Have the applicants complied with the admissibility criteria set out in Article 35 of the Convention?

2. Do the applicants’ interests in question constitute “possessions” within the meaning of Article 1 of Protocol No. 1 of the Convention? If so, do the facts to which the applicants refer constitute a violation of that Article?

3. Did the alleged acts which gave rise to the applicants’ complaints have a basis in “law” within the meaning of the Convention provisions relied on by them?

APPENDIX

List of applications

No.

Application no.

Case name

Lodged on

Applicant Year of Birth Place of Residence Nationality

Represented by

Identification of property

1.

67094/17

OOO Alupka Rezort v. Russia

22/08/2017

OOO ALUPKA REZORT 2004 Yalta Russian

4,767 sq. m of development land located in Alupka village, Yalta

2.

36962/19

Posoven v. Russia

25/06/2019

Yuriy Vasylyovych POSOVEN 1977 Kyiv Ukrainian

A café building of 91.7 sq. m located in Novoozerne village, Yevpatoriya

3.

3573/22

Land, TOV v. Russia

28/12/2021

LAND, TOV 2003 Kyiv Ukrainian

Roman Yuryevich MARTYNOVSKIY

0.99 ha of development land located in Alushta