Prosecutor's claim for property restitution is a proper way to protect the state's title to real estate that belonged to the property complex of the NAS of Ukraine, but was alienated in favour of a third party without its consent - SC GC

The National Academy of Sciences of Ukraine is vested with the authority to manage state-owned property belonging to its administration, that is, it performs management functions on the basis of legislation, so the prosecutor has the authority to act on behalf of the state represented by the National Academy of Sciences of Ukraine, which complies with the requirements of part 3 of article 23 of the Law of Ukraine ‘On the Prosecutor's Office’.

A proper and effective way to protect the state's ownership of real estate that was part of the property complex of the National Academy of Sciences of Ukraine and belonged to it under the right of full economic management, but was alienated in favour of an individual by a person who had no right to do so, is a claim for restitution of property from someone else's illegal possession under Article 387 of the Civil Code of Ukraine.

This conclusion was reached by the Grand Chamber of the Supreme Court in the case of a claim filed by the prosecutor on behalf of the state represented by the National Academy of Sciences of Ukraine against an individual for the restitution of property.

The prosecutor appealed to the court on behalf of the state represented by the National Academy of Sciences of Ukraine with reference to the plaintiff's inaction in protecting the interests of the state, which consisted of an inadequate response and failure to take appropriate measures to the illegal withdrawal of the Borei Recreation Centre from the state property of the National Academy of Sciences of Ukraine in favour of an individual.

The courts of previous instances satisfied the claim.

The Grand Chamber of the Supreme Court pointed out that the National Academy of Sciences of Ukraine is a state non-profit budgetary organisation (institution). An analysis of the provisions of the Law of Ukraine ‘On Management of State-Owned Property’ and the Charter of the National Academy of Sciences of Ukraine gives grounds to conclude that the NAS of Ukraine exercises the authority to manage the objects of the property complex, ensures the exercise of the state's rights as the owner of these objects, effectively uses and disposes of these objects of the property complex within the limits established by law in order to meet state and public needs.

In view of the above, the Grand Chamber of the Supreme Court departed from the conclusions set out in the resolutions of the ComCC of the Supreme Court of 7 June 2022 in case No. 909/835/18, of 13 December 2022 in case No. 927/682/20, of 30 May 2023 in case No. 914/4127/21 regarding the absence of grounds for the prosecutor to act on behalf of the state represented by the National Academy of Sciences of Ukraine, and noted that since the National Academy of Sciences of Ukraine is vested with the authority to manage state-owned objects belonging to its sphere of management, i.e., it performs management functions on the basis of legislation, the prosecutor has the authority to act on behalf of the state represented by the National Academy of Sciences of Ukraine, which is in line with the provisions of part 3 of Article 23 of the Law of Ukraine ‘On the Public Prosecutor's Office’.

The Supreme Court noted that since the NAS of Ukraine did not approve the transfer of the disputed real estate, which is state-owned and part of the property complex of the NAS of Ukraine, to the ownership of an individual, the state's ownership of this real estate did not cease and was not transferred to the individual defendant.

The defendant received the disputed real estate under gratuitous agreements - gift agreements. According to part 3 of Article 388 of the Civil Code of Ukraine, if the property was acquired free of charge from a person who had no right to alienate it, the owner has the right to reclaim it from a bona fide purchaser in all cases. Thus, in the case of gratuitous acquisition of property from a person who had no right to alienate it, the owner has the right to reclaim it from the person who illegally, without an appropriate legal basis, took possession of it, regardless of the latter's good faith, pursuant to Article 387 of the Civil Code of Ukraine.

According to the Grand Chamber of the Supreme Court, the prosecutor's request to reclaim the real estate that was part of the property complex of the National Academy of Sciences of Ukraine from someone else's illegal possession is an effective and sufficient way to protect the violated right, which ensures full restoration of the violated right of the owner, whose property was taken from him against his will, and therefore meets the objectives of civil proceedings - effective protection of violated, unrecognised or disputed rights, freedoms or interests of a person.

The arguments of the cassation appeal that in this case the prosecutor did not have the authority to act on behalf of the state represented by the National Academy of Sciences of Ukraine are unfounded, since in this case the prosecutor filed a claim in the interests of the state represented by the National Academy of Sciences of Ukraine, which, by owning, using and disposing of the objects of the property complex that is in state ownership and belongs to it under the right of full economic management, essentially exercises management functions in relation to such property.

In addition, the SC GC noted that in the circumstances of this case, given the public interest in returning the real estate belonging to the property complex of the National Academy of Sciences of Ukraine to state ownership, the prosecutor had to go to court to protect the relevant public interests of the state.

Resolution of the Grand Chamber of the Supreme Court of 10 April 2024 in case No. 520/8065/19 (proceedings No. 14-150цс23) - https://reyestr.court.gov.ua/Review/118486333.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.