SURVEY LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of November 30, 2007 No. 01-8/918

About some questions of practice of resolution of disputes connected with lease of the parcels of land

(on the materials considered in cassation procedure by the Supreme Economic Court of Ukraine)

According to the procedure of information and for accounting in hearing of cases the overview of the disputes solved by economic courts on which judgments are reviewed in cassation procedure by the Supreme Economic Court of Ukraine is sent.

1. The decision of competent authority on granting lands in lease and the corresponding lease agreement of the parcel of land are the connected dispositive facts.

The village council appealed to local economic court with the claim (taking into account amendment and refining) to Limited liability company (further - Society) about recognition invalid the parcel of land concluded between agreement parties of lease. Claims are motivated with the fact that in case of the conclusion of the specified agreement the parties do not reach consent on all essential condition which is stipulated in Article 15 Laws of Ukraine "About lease of land". Along with it the claimant referred to the fact that of 17.11.2005 the decision of the Village Council of 12.03.2004 N145-III about transfer of the parcel of land to Society is nullified by the decision of district court from day of its acceptance.

Society in turn submitted the counter action to Village council about recognition of the called agreement valid. Counter claims are motivated with the fact that the called agreement meets the requirements of the Law of Ukraine "About lease of land" and the Standard form of the agreement approved by the resolution of the Cabinet of Ministers of Ukraine of 17.03.1993 of N 197, which was acting at the time of the conclusion of the controversial agreement; however this agreement category according to part two of article 290 of the Economic code of Ukraine needs the notarial certificate, however the Village council evades from making of notarial actions, and in that case Article 220 of the Civil code of Ukraine provides possibility of recognition of such agreement valid judicially.

Decision of local economic court of 14:12. 2005, the resolution of Economic Court of Appeal left without changes of 03:02. 2006, satisfaction of primary claim it is refused, and counter claims are satisfied, the lease agreement of the parcel of land of 15.03.2004 under registration N 26, signed between Village council and Society, is recognized as valid.

Without agreeing with accepted on case by the decision and the resolution, the Village council appealed to the Supreme Economic Court of Ukraine with the writ of appeal in which it asks them to cancel and to submit the case on new trial to Trial Court. Requirements of the writ of appeal are motivated with the reference to violation of the previous instances of regulations of substantive and procedural law by courts, namely: Article 35 of the Economic Procedure Code of Ukraine of rather collateral estoppel for economic court of the facts determined in the judgment on civil case; Articles 116, 124 Land codes of Ukraine according to which transfer to lease of the parcel of land by the conclusion of the lease agreement is performed based on the decision of the owner - relevant organ of the executive authority; Articles 203, 215 Civil codes of Ukraine; the provisions of the law of Ukraine "About lease of land". Besides the complainant notices that courts leave out of attention that circumstance that the relevant decision of Village council was made by 12.03. 2004, and the controversial agreement is registered already 15.03. 2004, whereas on preparation of the documents necessary for registration, at least than 30 days are required.

Having heard in judicial session of explanation of agents of the parties, having considered and having discussed arguments of the writ of appeal, having checked correctness of application by Trial and Appeal Courts of regulations of substantive and procedural law, the judicial board of the Supreme Economic Court considers that the writ of appeal is subject to satisfaction for such reasons.

By economic courts of the previous instances it is determined that 12.03.2004 at the tenth session the Village council adopts the decision under N145-III on transfer of the parcel of land by Ploshchad 2,1 of hectare to lease to Society, based on which between the last and Village council the agreement is signed (without specifying of date and the place of creation), of lease of the parcel of land which is registered in the book of registration of lease agreements of Village council 15.03.2004 for N26. According to terms of the contract its effective period constitutes two years, since day of registration. By economic courts it is also determined that the decision of Village council of 12.03.2004 under N145-III based on which the controversial lease agreement of the parcel of land, by the decision of district court is signed of 17:11. 2005, it is nullified.

Refusing satisfaction of primary claim and satisfying counter claims, economic courts of the previous instances came to conclusion about compliance of the lease agreement of the parcel of land of 15.03.2004 under N26 to the provisions of the law of Ukraine "About lease of land", having specified at the same time that the decision of Village council and signing of the last of lease agreements are independent acts of declaration of will of the lessor in case of the conclusion of this agreement.

According to Article 84 of the Economic Procedure Code of Ukraine, explanations which contain in Items 1, 6 Resolutions of the Plenum of the Supreme Court of Ukraine of 29.12.1976 of N11 "About the Judgment" with corresponding changes, the decision is legal when court, having fulfilled all requirements of the procedural legislation and having comprehensively checked circumstances, solved case according to regulations of the substantive right which are subject to application to these relations.

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