Property rights during war: legal regulation and restrictions

Compulsory seizure of property

Article 41 of the Constitution of Ukraine provides the following:

“No one shall be unlawfully deprived of their property rights. The right to private property is inviolable.

Compulsory seizure of objects of private property rights may be applied only as an exception for reasons of public necessity, based on and in the manner prescribed by law, and subject to prior and full compensation of their value. Compulsory seizure of such objects with subsequent full compensation of their value is permissible only under conditions of martial law or a state of emergency.”

The Law of Ukraine “On the Transfer, Compulsory Seizure, or Withdrawal of Property Under Conditions of Martial Law or a State of Emergency” establishes the procedure for transferring, compulsorily seizing, or withdrawing property from individuals and legal entities to meet the needs of the state.

Compulsory seizure of property is the process by which the state takes ownership of certain property from its owner. This property can be either private or communal.

Seizure occurs only under conditions of martial law or a state of emergency and is subject to prior or subsequent full compensation of its value.

Who has the right to compulsorily seize property

Under martial law, compulsory seizure of property is carried out based on a decision by military command, which must be approved by the military administration.

In areas where active hostilities are taking place, compulsory seizure or withdrawal of property is carried out solely on the decision of the military command without additional approval. This ensures a rapid response to the urgent needs of defense.

Compensation for the value of property

1. Prior Compensation: Compensation for property compulsorily seized under conditions of martial law or a state of emergency with prior full reimbursement of its value is provided by the military command or the authority that made the decision to seize the property, using state budget funds before the act is signed.

2. Subsequent Compensation: Compensation for property compulsorily seized under conditions of martial law with subsequent full reimbursement of its value is provided within five budget periods. Under a state of emergency, compensation is provided within one budget period after the termination of the relevant regime, using state budget funds.

The documentation for the compulsory seizure or withdrawal of property and the payment of property appraisal costs are handled by the military command or the authority that made the decision to seize the property, using state budget funds.

After the termination of the legal regime of martial law or a state of emergency, if the compulsorily seized property remains intact, the former owner may request its return through the courts. The return of the property is carried out based on a court decision that has come into legal force. Upon the return of the property, ownership rights are restored, and the owner is obligated to return the compensation received, minus the fee for the use of the property. The former owner may also request the provision of other property in place of the seized property, if possible.

Mobilization of property

According to the Law of Ukraine “On Mobilization Preparation and Mobilization,” citizens are required to transfer their property to the Armed Forces, other military formations, or the Operational-Rescue Service of Civil Protection during mobilization, and they receive compensation for its value from the state.

This indicates that the mobilization of property entails its temporary use, whereas compulsory seizure of property involves the deprivation of ownership rights and the receipt of compensation.

The Cabinet of Ministers of Ukraine establishes the procedure for the requisition, withdrawal, and compulsory seizure of vehicles during mobilization and wartime. The requisition is carried out free of charge according to the Mobilization Plan, based on the decision of local recruitment authorities. After the announcement of demobilization, the vehicles are returned to their owners.

Who can be exempted from property mobilization

1. Enterprises Executing Mobilization Tasks: Enterprises that are fulfilling mobilization tasks based on a contract with the Ministry of Defense for the execution of mobilization tasks, provided that their vehicles are involved in performing these mobilization tasks.

2. Enterprises of High Public Need and State-Owned Banks: Enterprises that have a high public need and state sector banks. The list of such enterprises must be approved by the Cabinet of Ministers of Ukraine upon the submission of the Ministry of Defense.

Judicial practice

Since the introduction of martial law, Ukrainian courts have faced new challenges arising from the restriction of property rights for citizens and enterprises.

Jurisdictional Conflicts in Cases of Property Seizure During Martial Law: Challenges and Solutions

Under martial law, a significant issue has emerged regarding the determination of jurisdiction in property seizure cases. On one hand, these disputes are related to acts of military command, which operate within their public authority (a public-law element). On the other hand, they directly impact citizens’ property rights, which belong to the realm of private law.

In a ruling by the Cassation Commercial Court within the Supreme Court on February 14, 2023, in case No. 904/868/22, the following legal conclusion was made:

If a person believes that their rights have been unlawfully violated, and these actions result in the emergence, modification, or termination of civil legal relations of a property nature or connected with the realization of their property or personal non-property interests, then declaring such decisions unlawful (illegal) is a method of protecting civil rights and interests. In such cases, the dispute is a civil law dispute, despite the involvement of a public law entity.

Currently, there is no unified approach to determining the effective means of protecting property rights in such situations.

Courts may consider claims for the recognition of property rights, the return of property from illegal possession, or the annulment of illegal legal acts that violate property rights, either separately or together. This leads to a lack of consistent legal practice and complicates the situation concerning legal certainty.

According to the ruling of the Odesa Court of Appeal dated March 4, 2024, in case No. 521/13792/22, an act of compulsory seizure or withdrawal of property is not an individual legal act and will not restore the violated right. Its annulment will also not ensure compensation for the value of the property, as it merely confirms the event of compulsory seizure or withdrawal of property and serves as the basis for subsequent compensation. The annulment of this act will not only fail to restore the violated right but will also deprive the person of the opportunity to receive compensation for the property’s value, as provided for in Article 9 of the Law of Ukraine “On the Transfer, Compulsory Seizure, or Withdrawal of Property Under Conditions of Martial Law or a State of Emergency,” after the termination of the martial law regime.

The Cassation Civil Court within the Supreme Court, in its ruling dated January 31, 2024, in case No. 707/1298/22, noted that without resolving the claim to declare illegal and annul the act of compulsory seizure or withdrawal of property, it is impossible to substantively address the derivative claim to recover the disputed vehicle from the Military Unit.

Property mobilization involves the transfer of property to the Armed Forces of Ukraine or other military formations during mobilization according to mobilization plans, with subsequent compensation by the state for its value in cases where the property is transferred to state ownership, destroyed, or damaged. (Grand Chamber of the Supreme Court in its ruling dated September 13, 2023, in case No. 757/64569/16-c).

Conclusion

Property rights are one of the fundamental human rights, but they may be restricted under martial law. The state has the right to take measures necessary to ensure the country’s defense capability and protect the population. However, it is crucial to maintain a balance between the needs of the state and the rights of citizens.