The Federal Commercial Court of the Moscow District maintained the ruling of the Moscow Region

The Federal Commercial Court of the Moscow District maintained the ruling of the Moscow Region Commercial Court regarding claims to 1 ha of land located in Odintsovo and accommodating utilities and electric networks including a boiler station and water supply facility.

In 2002, the owner passed the land to a company developing a new area in Odintsovo, Moscow Region, in long-term lease (49 years).

The lease agreement was part of the package including an investment contract for construction of a multi-level parking lot involving the owner of this and other sites in Odintsovo.

Over more than a decade, the developer has built a new extensive residential area comprising socially focused facilities, infrastructure and utilities. However, a large part of investment agreements between the land owner and the developer failed to be implemented. Once the completed buildings passed to new owners following the developer’s bankruptcy, the land owner found himself in a position where he was actually deprived of the title to his own land leased out for pennies for dozens of years ahead and encumbered with completed buildings.

The BIEL team succeeded in legal action to terminate the 2002 lease agreement and recognize the land owner’s right to claim a land buyout or use payment at the current market prices from the owners of completed buildings.

According to N.I. Sapozhnikov, head of the BIEL dispute resolution practice, the case being examined is a legal precedent because the court not only terminated the lease agreement but, refusing to sanction the demolition of capital construction facilities built in the plaintiff’s land, formulated a legal position whereby the land owner was entitled to claim from the owners of these facilities either to buy them out or pay for the respective land on new terms.