When Closing Appeal Proceedings, the Attorney's Fees Are to Be Recovered from the Opposite Side - SC Grand Chamber

The court considered a case on the claim of an agricultural firm against an LLC on the invalidation of the agreement on granting the right to use a land plot and upheld it. The defendant lodged an appeal and appeal proceedings were opened. The plaintiff lodged a statement of defence. Subsequently, the defendant withdrew his appeal.

The plaintiff applied to the court of appeal for the recovery from the defendant of the costs of professional legal assistance in the amount of more than UAH 20,000. The court of appeal dismissed the application, arguing that the Civil Procedure Code of Ukraine did not provide for the possibility of an additional court decision in case a ruling to close the appeal proceedings has been adopted. The plaintiff filed a cassation appeal, in which he asked to satisfy his claims for reimbursement of legal costs, and emphasized the unequal approach of the courts in resolving this issue.

The Grand Chamber of the Supreme Court granted the cassation appeal, overturned the ruling of the court of appeal and charged the defendant with the costs of professional legal assistance incurred by the plaintiff.

At the same time, the SC Grand Chamber stated that, according to the Civil Procedure Code of Ukraine, filing an appeal is an implementation by a party of the principle of ensuring the right to an appeal review of the case and the principle of discretion, that is, the right to withdraw an appeal. At the same time, the Civil Procedure Code of Ukraine provides for the general principle of reimbursement of court costs.

The SC Grand Chamber emphasized that filing an appeal and opening appeal proceedings require other participants in the case to take actions in defence of their interests and encourage certain actions that would not have been taken in the absence of an appeal. Providing a statement of defence to an appeal is an implementation of the adversarial principle.

Therefore, in case of closing appeal proceedings, the court costs incurred by other participants in the case in connection with the appeal and opening of the appeal proceedings must be taken into account.

In this case, the court of appeal does not need to justify the good faith or bad faith of the person who filed the appeal, since such a person exercises his right to an appeal review of the court decision, but independently decided to withdraw the appeal, being aware of the consequences of such a refusal (impossibility of an appeal review of the court decision).

Consequently, in case of closing appeal proceedings, there are no circumstances that would make it impossible or level the general principle of reimbursement of legal costs of the party in whose favor the court decision was made (clause 12, part 3, article 2 of the Civil Procedure Code of Ukraine).

The Resolution of the Grand Chamber of the Supreme Court of 8 June, 2022, in case No. 357/380/20 (proceedings No. 14-20цс22)– https://reyestr.court.gov.ua/Review/104769594.

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