The protection of violated rights of investor is not limited to national courts or investment arbitration. The experience of AGA Partners confirms the possibility of successfully resolving construction and land disputes in the European Court of Human Rights. It is this protection mechanism that our Client has chosen in order to compensate for losses caused by the seizure of the land plot and the termination of the construction project.
As a result of a long consideration of the case «Construction and Investment Group 1 v. Ukraine» in the European Court of Human Rights, on 17 December 2020, a decision was made in favor of the Client on the responsibility of the state of Ukraine for violation of the right to peaceful possession of property, established by the Article 1 of the Protocol No. 1 to the Convention on Protection of Human Rights and Fundamental Freedoms.
The dispute arose between the Client and the Kiev City Council in 2008 and concerned the termination of the right to lease a land plot for the construction of a multi-storey residential building with underground parking in Kiev.
The Client entered into a lease agreement of a land plot with the Kiev City Council for the construction of a multi-storey residential building in Kiev and received all the necessary approvals and permits for the construction work. In addition, foreign investments were attracted to implement the construction project.
However, during the preparatory stage of construction, local authorities canceled the decision to allocate the land plot to the Client, proposed to terminate the lease agreement and assigned to the land plot the status of a public garden. The Client applied to the national courts in order to recover the losses incurred caused by the seizure of the land plot, however, the Ukrainian courts of all instances unreasonably refused to satisfy the Client's claims.
As a result, a decision was made to apply to the European Court of Human Rights in order to establish a violation by Ukraine of the Convention on Protection of Human Rights and Fundamental Freedoms and to obtain fair compensation.
AGA Partners succeeded in proving that the indicated actions of the State of Ukraine, represented by its state authorities, prevented the Client from using the land plot for the construction of a multi-storey residential building without providing any compensation, which is a violation of the right to peaceful possession of the land plot.
At the moment, the case is at the stage of consideration of the “just satisfaction claim”.
«The decision in the case shows that any interference by State authorities with the peaceful possession of property can only be justified if it is in the legitimate interests and is accompanied by the provision of a reasonable compensation. In this case, the state authorities terminated the Client's right to lease a land plot without providing any compensation, which was the main reason for establishing the responsibility of Ukraine. It is important that national authorities, when interfering with the right to peaceful possession of property, take measures to prevent or mitigate adverse consequences, for example by offering reasonable compensation or providing another plot of land, which was not done in this case».
The details of the case can be found by clicking on the following link: http://hudoc.echr.coe.int/eng?i=001-207984.