The Grand Chamber of the Supreme Court Ruled on the Priority of the Provisions of the Civil Code of Ukraine in the Case Concerning Invalidating the Ownership Certificate

The plaintiff filed a lawsuit to invalidate the certificate of ownership issued to the defendant on November 24, 2016 on the basis of the sale of the disputed apartment through electronic auction. The dispute in the case No. 334/3161/17 arose due to the fact that, according to the plaintiff, the disputed apartment was alienated by a person who as of November 24, 2016 was not and could not have been its owner and proprietor, because he had sold the apartment to the plaintiff on November 21, 2011.

The courts of previous instances rejected the claim. In view of the grounds for derogating from the opinion on the application of the rule of law in such legal relations, the Civil Cassation Court within the Supreme Court referred the case to the Grand Chamber of the Supreme Court.

In this case, among other things, the Grand Chamber of the Supreme Court answered the question whether the provisions of the Civil Code of Ukraine could be considered a priority over the provisions of other laws in resolving the conflict between the provisions governing single-subject legal relations.

In particular, the Grand Chamber of the Supreme Court came to the following conclusion: if the Civil Code of Ukraine and another regulatory legal act having the legal force of the law of Ukraine contain single-subject provisions with different content, the provisions of the Civil Code of Ukraine shall be given priority.

At the date of the conclusion of the plaintiff’s contract for the sale of the disputed apartment, there was a clear contradiction between the simultaneously applicable rules of part 3, Art. 3 of the Law of Ukraine "On State Registration of Rights to Real Estate and Their Encumbrances" (as amended by the Law of Ukraine of February 11, 2010 No. 1878-VI "On Amendments to the Law of Ukraine "On State Registration of Rights to Real Estate and Their Encumbrances" and other legislative acts of Ukraine") and part 4, Art. 334 of the Civil Code of Ukraine on the same issue - when does the ownership right of a purchaser of real estate under a contract of sale arise: from the moment of state registration of a transaction (the Civil Code of Ukraine) or from the moment of state registration of a property right acquired under such a transaction (the specified Law).

According to the Grand Chamber of the Supreme Court, this contradiction should be resolved in favor of the provision of the Civil Code of Ukraine: until January 1, 2013, the right of ownership of a purchaser of real estate under a contract of sale arose under the rules of part 4, Art. 334 of this Code - from the moment of state registration of such an agreement as a transaction.

A person who prior to January 1, 2013 acquired real estate under a contract of sale, the state registration of which was duly carried out, became the owner of such real estate from the moment of state registration of the contract of sale, regardless of whether he/she subsequently carried out state registration of his/her property rights.

The Grand Chamber of the Supreme Court considers that a person who has carried out the state registration of a transaction in accordance with the provisions of Articles 334 and 657 of the Civil Code of Ukraine has obtained the title of property owner. In turn, the need to register the right to real estate (at the time the disputed legal relationship arose - before January 1, 2013) did not affect the emergence of the real estate buyer's title to this property.

In view of the above, the Grand Chamber of the Supreme Court changed the decision of the previous courts only in the part of the grounds for refusing to satisfy the claim, and also derogated from the previously stated conclusion in the resolution of November 13, 2019 in case No. 755/9215/15-ц (proceedings No. 14-382цс19).

Resolution of the Grand Chamber of the Supreme Court of June 22, 2021, in case No. 334/3161/17 (proceedeings No. 14-188цс20) – https://reyestr.court.gov.ua/Review/98483113.