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INFORMATION LETTER OF THE SUPREME ARBITRATION COURT OF THE RUSSIAN FEDERATION

of November 13, 2008 No. 126

The overview of court practice on some questions connected with reclamation of property from others adverse possession

The presidium of the Supreme Arbitration Court of the Russian Federation considered the Overview of court practice on some questions connected with reclamation of property from others adverse possession and according to articles 16 of the Federal constitutional Law "About Arbitration Courts in the Russian Federation" informs Arbitration Courts on the developed recommendations.

Chairman of the Supreme Arbitration Court of the Russian Federation

A. A. Ivanov

The overview of court practice on some questions connected with reclamation of property from others adverse possession

1. If person which gave property in pursuance of the invalid transaction addresses with the requirement about its return from others adverse possession of other party of the transaction based on Article 301 of the Civil code of the Russian Federation, the court refuses satisfaction of the claim.

The limited liability company (seller) and joint-stock company (buyer) signs and performs the purchase and sale agreement of non-residential premises. Proceeding from negligibility of this agreement, the limited liability company appealed to Arbitration Court with the action for declaration to joint-stock company about reclamation from its adverse possession of the rooms transferred to agreement performance.

At stage of preparation of case for legal proceedings in preliminary judicial session court, having determined nature of disputable legal relationship, suggested to consider the plaintiff's declaration as the requirement about application of consequences of invalidity of the insignificant transaction by return by the parties each other everything received according to the transaction (Item 2 of Article 167 of the Civil code of the Russian Federation (further - the Civil Code of the Russian Federation)). The claimant did not agree with it and insisted on qualification of the requirement declared to them as vindicatory and its consideration based on article 301 Civil Code of the Russian Federation.

Considering the requirement for being, the court agreed with opinion of the claimant concerning negligibility of the controversial agreement, however refused satisfaction of the claim, having referred to the fact that the claimant who imposed the compulsory demand, but not the requirement about return of each of the parties of everything received according to the invalid transaction, elects inadequate method of protection of the violated right.

Appeal Court, canceling resolution of the Trial Court and satisfying claim, specified: the fact of use in itself by the claimant of such method of protection as the vindicatory claim cannot be the basis for refusal to it in protection of the right as is result of the free choice by it of method of protection of the violated right. By court it is determined that at the time of consideration of dispute the claimant was owner of disputed rooms, and the defendant had no rights allowing it to own and use them.

At the same time the Appeal Court did not agree with defendant's cases about the violation in this case satisfaction of the vindicatory claim of the rule of Item 2 of article 167 Civil Code of the Russian Federation leading to unilateral restitution. According to court, the defendant has possibility of recovery of the right by presentation of the recovery suit of unjust enrichment in the amount of the money listed to them as payment for disputable property according to the invalid transaction.

The court of cassation instance cancelled the court order of appellate instance, upheld resolution of the Trial Court on the following bases.

As it is established by courts, the parties made and performed the insignificant transaction. Return of each of the parties of everything received according to the invalid transaction is performed according to the procedure, stipulated in Item 2 articles 167 Civil Codes of the Russian Federation according to which return of received has bilateral character. It means that the judgment on demand, declared according to Item 2 of article 167 Civil Code of the Russian Federation, shall resolve question of obligation of each of the parties to return everything received according to the transaction. In view of the fact that the law provides special consequences of invalidity of transactions, rules about reclamation of property from others adverse possession (Article 301, of 302 Civil Codes of the Russian Federation) to the relations of the parties are not subject to application.

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