The appropriate means of protecting the lessor’s rights when the lessee fails to return a land plot upon expiration of the lease agreement is to compel the return of the land plot - SC GC

The proper way to protect the lessor's violated rights in relation to a land plot transferred on the basis of a lease agreement, the term of which, after its previous extension, has expired at the time of filing a lawsuit, is the lessee's obligation to return the land plot.

This conclusion was reached by the Grand Chamber of the Supreme Court.

In the circumstances of the case, the LLC obtained the right to use the land plot on the basis of a court decision recognising the land lease agreement for a period of 5 years as concluded. Subsequently, the city council decided to change the terms of the agreement, after which the parties signed a new lease agreement in the form of a novation and registered it. The lease was later extended for another 5 years. However, upon expiry of this term, the agreement was not renewed but the LLC did not return the land plot.

In this regard, the prosecutor filed a lawsuit in the interests of the state, claiming that the land plot was located in the protected zone of cultural heritage sites and the historical area of the city and was transferred in violation of the law. In addition to the claim for the return of the land plot, the prosecutor also demanded that the decision of the city council be declared illegal and cancelled, that the lease agreement be invalidated and that the state registration of the lease right be cancelled.

The courts of previous instances dismissed the claim because, inter alia, the existence of a binding relationship between the defendants makes it impossible to bring a negative claim, and by claiming to invalidate the agreement, the prosecutor is actually trying to review the court decisions that recognised the agreement and extended its term. The Court of Appeal also drew attention to the termination of the disputed lease agreement due to the expiry of the term for which it was concluded.

Considering the dispute, the Grand Chamber of the Supreme Court noted that the existence of binding (contractual) legal relations in respect of the disputed land plot makes it impossible to return it by applying the provisions of Article 391 of the Civil Code of Ukraine (by filing a negative claim to the court).

If the lease agreement expires and the lessee fails to fulfil its obligation to return the land plot in a proper and effective way to protect the lessor's violated rights, pursuant to para. 4 of part 2 of Article 16 of the Civil Code of Ukraine, the lessee is obliged to return the land plot that was the subject of the agreement.

In this case, having established that the prosecutor's claim was aimed at returning the disputed land plot to the territorial community as a result of the expiration of the lease agreement, the Grand Chamber of the Supreme Court considered the prosecutor's claim to oblige the defendant to return and the city council to accept the disputed land plot as a claim for the return of this land plot to the territorial community under the rules of Article 785 of the Civil Code of Ukraine and Article 34 of the Law of Ukraine "On Land Lease" (as a legal consequence of the termination of the land lease agreement).

At the same time, the prosecutor's other claims were found to be improper and ineffective. In particular, the disputed decision of the city council has exhausted its effect by execution and its cancellation will not restore the violated right. With regard to the claims for invalidation of the contract that terminated due to the expiration of its validity, the prosecutor did not substantiate how their satisfaction, while simultaneously claiming an obligation to return the land plot to the LLC, affects the restoration of the violated right.

In view of the above, the Grand Chamber of the Supreme Court overturned the decisions of the courts of previous instances in part of dismissing the claim to oblige the LLC to return the disputed land plot and issued a new decision to satisfy them.  In terms of dismissing the rest of the claims, the SC GC amended the contested court decisions, setting out their reasoning in the wording of this resolution.

Resolution of the Grand Chamber of the Supreme Court of 16 July 2025 in case No. 910/2389/23 (proceedings No. 12-14гс25) - https://reyestr.court.gov.ua/Review/129278127.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.