Information Note on the Court’s case-law 218
May 2018
Zelenchuk and Tsytsyura v. Ukraine - 846/16 and 1075/16
Judgment 22.5.2018 [Section IV]
Article 1 of Protocol No. 1
Article 1 para. 2 of Protocol No. 1
Control of the use of property
Indefinite blanket ban on alienation of agricultural land: violation
Facts – In the 1990s, in the course of the land reform, the former Soviet collective and State-owned farms were dissolved and their members received land entitlements in the form of shares of the whole land mass of a given farm expressed as a number of hectares but without a specific physical location or defined boundaries. Subsequently, from 2000 onwards, the shares were converted into physical plots of land (defined on the ground) and ownership certificates were issued relating to specific plots of land. In 2001 a ban, known as the “land moratorium”, on any form of alienation of agricultural land, except for inheritance, swap transactions and expropriation for public use, was introduced, pending the adoption of legislation necessary for the creation of a well-functioning land sales market. While the ban was initially set to be in force until 2005, it was extended several times and is still in force. Presently, any change in the designated use of agricultural land is likewise prohibited.
Both applicants received shares of farm land by inheritance in 2000 and 2004 respectively and received property certificates in respect of specific plots in 2007 and 2008. Both plots, subject to the above ban, have been rented out to commercial companies.
Law – Article 1 of Protocol No. 1: The impugned legislative situation constituted an interference with the applicants’ possessions and amounted to control of the use of property. The moratorium and its extensions had a basis in domestic law and was aimed at avoiding impoverishment of the rural population, excessive concentration of land in the hands of wealthy individuals or hostile powers and its withdrawal from cultivation. The domestic authorities’ judgment that the maintenance of the moratorium on land sales served those goals was not “manifestly without reasonable foundation”.
It was not the Court’s role to decide in principle whether a State which had decided to transfer previously State-owned land into private hands should or should not then allow the new owners to sell it and under what conditions. In view of the principle of subsidiarity, the Court could only assess the situation affecting the applicants in the light of the goal of creation of a land sales market, which the respondent State itself had consistently declared. The following factors were relevant for such an assessment.
(a) Legislative uncertainty – The motives for the moratoriums introduction and maintenance, its scope and end point had evolved over time. Almost all changes in the moratorium following its initial adoption were in fact aimed at tightening rather than gradually loosening restrictions. The moratorium had become de facto indefinite and the conditions for its lifting indeterminate. No reason had been given for that change and it was in contradiction with the proclaimed aim of the gradual introduction of a land sales market.
(b) Reasons advanced for the introduction and maintenance of the moratorium – No specific reasons had been advanced as to exactly why the domestic authorities considered the temporary blanket ban on land sales as the only appropriate measure of achieving their desired social and economic goals, whether they seriously considered other means of achieving them or assessed the proportionality of a total ban. Moreover, once the moratorium had been extended, no reasons had been given for the continuing failure to legislate and consider less restrictive alternatives. That such alternatives were available had been repeatedly recognised at the highest levels of the respondent State.
The concern about impoverishment of the rural population and farmers did not address the situation of owners such as the applicants who lived in urban areas and did not work in farming. It had been acknowledged by the legislator that the absolute prohibition on sales was not needed as such to achieve that goal but rather served to provide time to develop the necessary legislation to ensure a well-regulated land sales market. Concerning preventing excessive concentration of land and its withdrawal from cultivation, domestic law already contained provisions which aimed at achieving the same result. It was also relevant that no other Council of Europe member State, including those who had undergone transition from State-controlled to market economies and had implemented land reform programmes, had in place blanket restrictions on the sale of agricultural land.
(c) The burden imposed on the applicants – Both applicants had obtained the land as a result of a land reform which had not been completed by the time they had come into possession of it. The land had been inherited rather than acquired in a commercial transaction and given the reform’s pronounced policy of eventually opening up agricultural land to the market they could not expect that the absolute prohibition would continue indefinitely. Therefore, it could not be said that the applicants had to know that they were coming into possession of encumbered property which would remain so encumbered save for the eventuality of some uncertain future development.
As to the financial aspect of the burden imposed on the applicants, applicants were free to rent their land out at market rates and the respondent State had sought to benefit the owners by setting minimum rents. At the same time, the applicants’ land had been rented by commercial enterprises and the Government had failed to show that the moratorium served to protect vulnerable categories of the population. Furthermore, the applicants had gained the land through the process of ordinary inheritance and it was not a gratuitous windfall for them.
The Court also found relevant the length of time the restrictions remained in place, their broad scope and their blanket and inflexible nature. The restrictions had affected the first and second applicants personally for more than twelve and ten years respectively. They had prevented the applicants from both alienating their land in nearly every possible fashion and using it for any other purpose than agriculture. They had not been subject to any individual review or exception, resulting in the proportionality of the measure not being substantively examined either at the legislative or individual level. Lastly, the uncertainty created by the repeated extensions of the moratorium had in itself contributed to the burden imposed on the applicants. Realisation of one of the key elements of their ownership, the right to dispose of one’s property, had become subject to legislation of indefinite content, the passage of which had been postponed in a fashion which appeared unpredictable and insufficiently explained. Their ownership rights had been rendered, in practical terms, precarious and defeasible.
In sum, the applicants had been made to bear the burden of the authorities’ failure to meet their self-imposed goals and deadlines. In view of the weakness of the reasons given for the choice of the most restrictive alternative available to the authorities over less restrictive measures, the burden imposed on the applicants had been excessive. A fair balance between the general interest of the community and the property rights of the applicants had not been drawn.
Conclusion: violation (unanimously).
Article 46: The respondent State should take appropriate legislative and/or other general measures to ensure a fair balance between the interests of agricultural land owners on the one hand, and the general interests of the community, on the other hand, in accordance with the principles of protection of property rights under the Convention. It was not for the Court to specify how those interests should be balanced. The Court’s judgment should not be understood to mean that an unrestricted market in agricultural land had to be introduced in Ukraine immediately.
Article 41: no claim made in respect of pecuniary damage; finding of a violation constituted sufficient just satisfaction in respect of any non-pecuniary damage. In making that finding the Court had regard to the nature of the burden imposed on the applicants, the requirement for the respondent State to take appropriate general measures and the fact that an exceptionally large number of individuals were affected by the moratorium. Should the respondent State unreasonably delay adoption of the requisite general execution measures, that might, with the passage of time, lead to a situation where awards under Article 41 could eventually become warranted, at least for some categories of agricultural land owners.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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