Deprivatization: current judicial practice

Gurchenko Evgenii Viktorovich Counsel, Head of Litigation Practice at St. Petersburg office, EPAM Law 22-24 Nevsky Ave., Saint Petersburg, Russia, 191186 evgeny_gurchenko@epam.ru

Kevorkova Diana Ashotovna Attorney at EPAM Law, Master's student of Department of Administrative and Financial Law, St. Petersburg State University 199034, Russia, Saint Petersburg, nab. University, 7-9 diana_kevorkova@epam.ru

Introduction

The practice of deprivatization – the confiscation of assets in favor of the state in connection with the identification of violations committed during their privatization – has always existed ^[1]. Violations of the procedure for the acquisition of publicly owned property could be the basis for challenging the relevant transactions and claiming the asset in favor of the State.

The bulk of such cases are disputes over individual facilities that were or were not part of privatized enterprises. However, recently, in judicial practice, the number of cases of claims in favor of the state has been growing, not only for individual objects, but also for large enterprises as a whole.

The legal problem within the framework of the topic under study is to maintain a balance of interests of the state, society as a whole and individuals who own previously privatized property.

Thus, the state is interested in the return of assets that were previously privatized with violations, as well as in preventing the illegal disposal of property of public entities. As a rule, the special interest of the state is associated with the strategic or social significance of the privatized property.

At the same time, the owners of assets that were previously privatized by them or acquired for a fee are interested in protecting their own property rights.

The society is interested at the same time in maintaining the stability of civil turnover and in protecting the social interests of citizens, developing enterprises, and ensuring security (for example, environmental or military).

In this regard, an important task is to establish the limits of legality and validity of the claim of property from private individuals in favor of the state in order to ensure a balance of the above-mentioned interests. Such limits include: (1) the range of violations committed during privatization that are sufficient to claim assets, (2) the amount of property that can be claimed from individuals, (3) the procedure for calculating the limitation period. 

The relevance and importance of this problem is due to the fact that during the privatization process in the early 90s, several hundred thousand enterprises were transferred to private individuals. Many of them are still of significant importance for the country's economy. In addition, many facilities, including large industrial complexes, were privatized over the following years.

Despite the fact that cases of deprivation of enterprises and their assets by lawsuits of the prosecutor's office are widely discussed in the media, there is a lack of doctrinal developments regarding this phenomenon.

These and other aspects of the deprivation of enterprises were covered, among others, by G.A. Gadzhiev (in terms of constitutional and legal problems) ^[1], M.A. Tserkovnikov ^[2], M.Ya. Kirillova, P.V. Krasheninnikov ^[3] (in terms of the limitation period).

It should be noted that the issue of deprivation of residential premises has been worked out much more doctrinally, however, the approaches formed are not fully applicable to property used in the framework of entrepreneurial activity, including due to differences in regulatory regulation.

With regard to the demand for residential premises, the resolution of the Constitutional Court of the Russian Federation No. 16-P dated 06/22/2017 was devoted to the problem of ensuring a balance of public and private interests. By this resolution, the provision of paragraph 1 of Article 302 of the Civil Code of the Russian Federation regulating the procedure for reclaiming property from someone else's illegal possession was recognized as inconsistent with the Constitution of the Russian Federation, including since it does not take into account the possibility of improper performance by the competent authorities of public law education of their duties, making mistakes by them.

Based on the legal position set out in the resolution of the Constitutional Court of the Russian Federation dated 06/22/2017 No. 16-P, the legislator differentiated the provisions of Article 302 of the Civil Code by introducing paragraph 4 into this article, according to which the court refuses to satisfy the requirements of public legal entities to claim residential premises from a bona fide acquirer if, after the disposal of residential premises from the plaintiff's possession three years have elapsed from the date of entry into the state register of the record of ownership of the first bona fide buyer of residential premises.

D.A. Malbin ^[4] points out that the special, restrictive rules established by the legislator in relation to the demand for residential premises (paragraph 4 of Article 302 of the Civil Code of the Russian Federation) cannot be extended to other objects, since the right to housing and the right of ownership are equivalent, both rights are enshrined in the Constitution of the Russian Federation (Articles 35 and 40) as the main guaranteed rights, in connection with which, in the competition of these rights, it is impossible to resolve a dispute in favor of one of them to the detriment of the other in the absence of sufficient and reasonable grounds. There are no competing constitutionally significant rights in relation to other real estate objects.

Indeed, the legislator, in paragraph 4 of Article 302 of the Civil Code of the Russian Federation, established special rules only for the state to demand residential premises from private individuals. At the same time, the legal regime of residential premises assumes increased guarantees due to the need to protect social rights. However, one cannot agree that there are no constitutionally significant rights in relation to other objects of property that compete with the right of ownership of a public legal entity.

Thus, within the meaning of Part 2 of Article 35 of the Constitution of the Russian Federation, in conjunction with its articles 8, 34, 45, 46 and Part 1 of Article 55, the rights of ownership, use and disposal of property are provided not only to owners, but also to other participants in civil turnover. Among such property rights, the protection of which is guaranteed by the Constitution of the Russian Federation, are the property rights of bona fide purchasers.  The risk of loss of property contradicts the constitutional principles of freedom of economic activity and freedom of contracts, destabilizes civil turnover, undermines the trust of its participants in each other, which is incompatible with the foundations of the constitutional system of the Russian Federation as a rule of law state in which a person, his rights and freedoms are the highest value, and their recognition, observance and protection - the duty of the state (see Resolution of the Constitutional Court of the Russian Federation No. 6-P of 04/21/2003).

Thus, considering the problems of deprivation, it is necessary to find a balance between the interests of public law education and the interests of bona fide purchasers, taking into account the principles of freedom of economic activity, the need to ensure the stability of civil turnover.

At the same time, it is impossible not to take into account another conflicting interest: the public interest.

According to the positions of the European Court of Human Rights, which were previously referred to by the Constitutional Court of the Russian Federation in its Resolution No. 16-P dated 06/22/2017, if it is a matter of common interest, public authorities should act in a timely, appropriate and as consistent as possible; mistakes or miscalculations of state bodies should serve the benefit of interested parties, especially in the absence of other conflicting the risk of any mistake made by a public authority should be borne by the State, and errors should not be eliminated at the expense of the person concerned (rulings dated 05.01.2000 in the case of Beyeler v. Italy and 06.12.2011 in the case of Gladysheva v. Russia).

Within the meaning of the stated position of the European Court of Human Rights, the balance of interests of a private individual and the state in the issue of the distribution of the consequences of mistakes by public authorities (in relation to the problem under consideration – making illegal decisions on privatization) may be influenced by the presence of other conflicting interests.

In recent years, there has been a turnaround in judicial practice regarding the admissibility and limits of the State's claim of property from the possession of private individuals. At the same time, the legislative regulation in terms of the norms applied in the deprivation remained practically unchanged.

In this regard, it should be stated that a doctrinal study of the balance of public interests and private interests, as well as the specifics of the legal regulation of these relations, is required.

With this in mind, in order to determine how questions about the limits of deprivation should be resolved, how exactly the balance of interests should look in relation to the topic under study, this work will reflect an analysis of judicial practice in the context of current legislation, the doctrine of its application, the established system of civil and constitutional regulation, as well as economic and social realities. When writing this article, logical, theoretical-prognostic, formal-legal, system-structural analysis, as well as the method of legal modeling are used.

Grounds for deprivation claims

Currently, the vast majority of the prosecutor's office's claims for deprivation are based on the provisions of Articles 301 and 302 of the Civil Code of the Russian Federation, that is, on the general norms of civil legislation on the recovery of property from someone else's illegal possession.

According to Article 301 of the Civil Code of the Russian Federation, the owner has the right to claim his property from someone else's illegal possession. At the same time, according to paragraph 1 of Article 302 of the Civil Code of the Russian Federation, if the property was acquired for a fee from a person who did not have the right to alienate it, which the acquirer did not know and could not know (a bona fide acquirer), then the owner has the right to claim this property from the acquirer in the event that the property is lost by the owner or the person to whom the property was transferred by the owner in possession, either stolen from one or the other, or disposed of from their possession in another way against their will.

It follows from the above provisions that the prosecutor's office, as part of the process of reclaiming property from someone else's illegal possession, must prove that the transfer of ownership from a public legal entity did not take place, there were no legal grounds for the acquisition of property by a new owner, public legal education still retains the title.

As A.O. Rybalov points out ^[5], the specifics of vindication is the selection of a material object, carried out after resolving the issue of title.

Many deprivation cases are characterized by an appeal to the regulation of the privatization process, which was formed in the early 90s.  At the same time, it is impossible not to pay attention to the fact that the privatization procedure was adjusted continuously in the 90s, within a few months the legislation could change greatly, which inevitably led to risks in the privatization process.

In addition, the procedures, as a rule, were stretched over time, and by the end of the privatization process, its procedure could require a different set of approvals and documents than before.

For example, the importance of taking into account the chronology of the privatization procedure was noticed by the courts in case A07-20576/2020 when claiming shares of the Bashkir Soda Company. The court applied legislation requiring the consent of the authorized body of the Russian Federation, since the procedure for repurchasing SPO Caustic had not been initiated at the time of entry into force of the relevant law: payment under the lease agreement for the purchase of leased property was made only after its entry into force, despite the fact that the lease agreement with the right to repurchase was concluded earlier.

The main normative acts, violations of which the courts establish in the framework of cases of deprivation, are listed below:

• Resolution of the Supreme Court of the Russian Federation dated 12/27/1991 No. 3020-1 "On the delimitation of State Property in the Russian Federation into Federal Property, State Property of Republics within the Russian Federation, territories, regions, autonomous Region, Autonomous Districts, cities of Moscow and St. Petersburg and municipal property" - the delimitation of state property has been made;
• Decree of the President of the Russian Federation dated 12/29/1991 No. 341 "On accelerating the privatization of state and municipal enterprises" – objects are divided into groups depending on the order of privatization, objects whose privatization is prohibited are established, the necessary approvals for privatization are indicated;
• "The State program of privatization of state and municipal enterprises in the Russian Federation for 1992" (approved Resolution of the Supreme Court of the Russian Federation No. 2980-1 dated 11.06.1992) – objects have been established, the privatization of which is prohibited, the necessary approvals for privatization are indicated;
• Decree of the President of the Russian Federation dated 07/01/1992 No. 721 "On organizational measures for the transformation of state–owned enterprises, voluntary associations of State-owned Enterprises into Joint-stock Companies" (together with the "Regulation on the Commercialization of state-owned Enterprises with simultaneous transformation into Open-type Joint-stock Companies") - the procedure for the transformation of state-owned enterprises into open-type joint-stock companies is established;
• Decree of the President of the Russian Federation dated 11/16/1992 No. 1392 "On measures to implement industrial policy in the privatization of state–owned enterprises" (together with the "Temporary Regulation on holding Companies created during the transformation of state-owned enterprises into joint-stock Companies") - establishes the procedure for the creation of holding companies;
• Decree of the President of the Russian Federation dated 12/24/1993 No. 2284 "On the State Program for the Privatization of State and municipal enterprises in the Russian Federation" – provides a classification of objects and enterprises according to the possibility of their privatization.

Thus, the procedure of privatization and obtaining the necessary approvals took quite a long time, while the regulatory regulation changed dramatically and regularly. With this in mind, violations could well have been committed in relation to the privatization of many enterprises, which could be the basis for conclusions that the transfer of ownership did not take place, and the public legal entity retains the title to this day.

In addition, over the decades, privatized property has, as a rule, been repeatedly resold. In this regard, in order to overcome the special rule regarding bona fide paid purchasers established by Article 302 of the Civil Code of the Russian Federation, the prosecutor's office needs to justify that the property was disposed of against the will of a public legal entity.

Determining whether there is a will of a public legal entity to dispose of property presents some difficulties, since, strictly speaking, only an individual can possess will as a mental process.

The presence of difficulties in determining the will of collective subjects within the framework of vindication lawsuits is indicated, for example, by A.A. Guseva ^[6]. With regard to determining the will of legal entities, A.A. Guseva believes that the disposal of property by an unauthorized person indicates the disposal of property against the will of the company.

With regard to public legal entities, similar conclusions can be drawn: the will to dispose of property must be expressed by the authorities authorized to express it.

This thesis is confirmed by the courts. According to the currently emerging judicial practice of applying paragraph 1 of Article 302 of the Civil Code of the Russian Federation in relation to "deprivation" cases, the absence of the will of the public owner to dispose of property consists in making a decision on privatization by an unauthorized body. First of all, we are talking about situations where privatization is approved by local or regional authorities in the absence of the necessary consent of federal authorities.

Thus, it follows from the provisions of civil legislation that the basis for filing a claim for the recovery of property in favor of a public legal entity is the presence of violations during privatization. At the same time, in order to claim property from persons who have acquired previously privatized assets for a fee, it is required to establish that the privatization was not agreed upon by an authorized person.

However, it seems that from the point of view of constitutional law, the protection of property rights of public legal entities has specifics related to their special status.

The Constitutional Court of the Russian Federation (see Resolutions of the Constitutional Court of the Russian Federation dated June 30, 2006 No. 8-P, dated 06/22/2017 No. 16-P) has repeatedly pointed out that the recognition and protection of all forms of ownership equally does not exclude differences in the legal regime of private and public property, due, inter alia, to the peculiarities of the exercise and protection of rights: for Restrictions may apply to a public owner, which arise from the specifics of his legal status, manifested, inter alia, with his participation in civil legal relations, and involve the exercise of the powers assigned to him for constitutionally established purposes.

In Resolution No. 16-P dated 06/22/2017, the Constitutional Court of the Russian Federation explicitly states that the specifics of cases on vindication claims of public legal entities, based on the need to ensure a balance of constitutionally significant interests, may cause a different distribution of adverse consequences for the owner and a bona fide acquirer than established in Article 302 of the Civil Code of the Russian Federation.

In relation to residential premises, pursuant to this explanation of the Constitutional Court of the Russian Federation, an exception has been made in paragraph 4 of Article 302 of the Civil Code of the Russian Federation, which significantly restricts the presentation of vindication claims by state bodies. 

Gadzhiev G.A. ^[7] noted with regard to the introduction of paragraph 4 of Article 302 of the Civil Code of the Russian Federation that the complication and differentiation of the scope of protection provided to both the owner and the owner will continue. The legislator, having differentiated the provisions of Article 302 of the Civil Code, did not, although he could, follow the path of expanding the scale of weighing competing interests: in paragraph 4 of Article 302 of the Civil Code of the Russian Federation, we are talking only about a bona fide acquirer who owns only residential premises, although a bona fide acquirer of other objects may be in a similar position.

Since at the moment there are no special rules in the Civil Code of the Russian Federation regarding "deprivation" claims of public legal entities for the reclamation of non-residential facilities, public legal entities in the framework of such claims can protect their property rights on an equal basis with other participants in civil turnover, despite their special legal status.

At the same time, the Constitutional Court of the Russian Federation did not verify the provisions of Articles 301, 302 of the Civil Code of the Russian Federation to the extent that, in accordance with the latest law enforcement practice, they allow the reclamation of property not related to residential premises at the request of a public legal entity, regardless of the actions of state bodies to approve privatization.

Clarification of the norms of the Civil Code of the Russian Federation regarding the vindication of non-residential objects seems appropriate, based on the principles of maintaining the stability of civil turnover and trust in the actions of authorities, since the state, in accordance with the requirements of reasonableness and prudence in controlling property belonging to it, must take timely measures to protect property rights.

Violations that may be grounds for deprivation

The legal problems described above are clearly visible on the example of specific cases.

The most common group of violations of the privatization procedure: property, by virtue of its assignment to certain categories of objects, should be federal property, but the decision to privatize it was made by unauthorized persons – the authorities of the subject, local governments.

Such violations suggest grounds for conclusions both that the ownership right has not passed from a public legal entity to a private person, and about the absence of the will of an authorized person to dispose of property from the possession of a public owner, which allows ignoring the good faith and retribution of the acquisition of disputed assets by the defendants.

So, in the case A40-155494/2014 (the case of the Bashkir Petrochemical Company) The court concluded that the enterprises of the fuel and energy complex belong exclusively to federal ownership, their privatization is carried out by decision of the Government of the Russian Federation.

The relevant decision has not been made by the Government of the Russian Federation. The fact that the shares were not assigned to the Russian Federation in accordance with the established procedure does not mean that the State can arbitrarily deprive it of its property and protect its violated rights.

The court pointed out that, given the insignificance of actions to privatize the enterprise, all further transactions related to the disposal of its shares are null and void, rejecting arguments about the defendants' bona fide acquisition of shares in reimbursable transactions.

In case A50-24570/2021, privatization was declared illegal, since the enterprises of the extractive industry, in this case the Solikamsk Magnesium Plant, are classified exclusively as federal property.

It is noteworthy that in this case, the defendants submitted archival documents and letters from federal authorities stating that the privatization of the disputed enterprise does not require a decision by the Government of the Russian Federation. However, the court concluded that these documents contradict the law and do not replace the required decision of the Government of the Russian Federation.

In case A12-18383/2023 (the Volzhsky Orgsintez case), the court also did not take into account the explanatory letter from the authority, which stated that the disputed plant was not identified in the lists of enterprises privatized by the decision of the Government of the Russian Federation.

These positions demonstrate the need for a constitutional and legal assessment of the prosecutor's office's claims for deprivation in the context of maintaining confidence in the actions of the state, as well as their compliance with the requirements of reasonableness and prudence in controlling state-owned property.

It seems that the principle of maintaining confidence in the actions of the state does not meet the satisfaction of the requirements for deprivation when there are letters from public authorities on the legality of a particular privatization, especially if these documents come from the body of the public legal entity in whose favor the property is being claimed. 

Another example of a violation, which is the basis for the claim of property in favor of the state, is the transfer to private individuals of enterprises whose privatization is prohibited.

Such a violation indicates only that the ownership of a public legal entity has not passed to a private person due to the insignificance of the privatization transaction. By itself, it does not characterize the presence or absence of the will of a public legal entity to dispose of property from its possession, since any person authorized to alienate property under the conditions of a corresponding prohibition cannot exist in principle.

Thus, in case A50-18611/2023, the court claimed in favor of the Russian Federation the shares of JSC Metafrax Chemicals, indicating that the privatization of enterprises producing toxic substances was prohibited, and the privatized enterprise produces methanol, a strong, mainly nervous and vascular poison. In this case, the privatization was agreed upon by the authorities of the subject, while the property was classified as federal property.

The case also raises another significant problem for the process of deprivation: the uncertainty of the legislation of the 90s, difficulties in its interpretation.

Thus, the defendant's argument that methanol is used in industry for its main purpose, and not as a toxic substance, was not taken into account by the court, the court qualified the plant as an enterprise for the production of toxic substances.

Similar conclusions were drawn in case A12-18383/2023: the court, satisfying the requirements of the prosecutor's office, indicated that Volzhsky Orgsintez carried out the industrial production and sale of chemical products for industrial and technical purposes, including carbon disulfide, which is a highly toxic substance.

With regard to such practice, it is necessary to refer to the positions of the Constitutional Court of the Russian Federation (resolutions of the Constitutional Court of the Russian Federation No. 7-P of April 6, 2004, No. 1-P of January 21, 2010), according to which the uncertainty of the content of a legal norm allows the possibility of unlimited law enforcement discretion and leads to a violation of the principle of equality and the rule of law.

As A.Y. Bushev pointed out ^[8], legal certainty is an immanent feature of the rule of law.

In addition, the doctrine can be considered a generally accepted position on the inadmissibility of an expansive interpretation of lists in public law, which was noted, for example, by V.O. Luchin and A.V. Mazurov ^[9], S.V. Surkova ^[10].

Taking into account the above, the practice of the courts on the broad interpretation of the list of property, the privatization of which is prohibited, is alarming (in relation to the cases considered, in terms of the actual attribution of any plants producing chemical products to enterprises producing toxic substances).

One of the grounds for claiming assets in favor of the Russian Federation may also be various procedural violations (violation of the procedure for converting enterprises, underestimation of residual value, errors in payment, etc.).

In case A56-116780/2022, the court deprived the Severnaya Verf plant, since, to the detriment of the interests of the state, the Severnaya Verf company decided to transfer its property to other organizations. Contrary to the current legislation, these firms were established as independent open-type joint-stock companies, their authorized capital was formed at the expense of the founders' funds. The creation of the holding was not provided for by the privatization plan of 10.12.1992. There was no agreement from the State Committee of the Russian Federation on Antimonopoly Policy and Support for New Economic Structures.

Another example of a procedural violation is the absence of an object in the privatization plans. Thus, during the privatization of more or less large property complexes, the composition of the property was not reflected in detail or identified in the privatization plans.

In case A33-17177/2021, the railway infrastructure was claimed from Norilsk Nickel due to its insufficient identification in terms of privatization. The Court pointed out the need to comply with the privatization procedure, which provides for the implementation of an object-by-object inventory and valuation of property.

The filing of claims for the recovery of property from someone else's illegal possession in favor of the state is somehow connected with the following factors: the special importance of the object, for example, from a social point of view; the negative information background regarding the company's activities; the presence of foreign capital.

For example, in the case A50-24570/2021 (Solikamsk Magnesium Plant) The court drew attention to the fact that as a result of illegal privatization, state assets were transferred to offshore jurisdiction.

The examples given from judicial practice show that the scope of deprivation has expanded significantly in recent years. Similar violations can be detected in relation to a large number of assets.

The subject of deprivation, seized assets

As part of the deprivation of property, both shares, shares in the authorized capital of companies, and individual objects (buildings, structures, movable property) can be claimed in favor of the state by the prosecutor's office.

For example, in case A33-17177/2021, a railway was claimed from the ownership of PJSC MMC Norilsk Nickel: railway tracks, crossings, a railway station and a bridge.

At least twenty years have passed since the privatization of assets against which the prosecutor's office is suing. The composition of the property of enterprises and the state of assets have most likely changed significantly over such a long period of time.

Meanwhile, the emerging judicial practice proceeds from the fact that the disparity in the composition of the property belonging to the enterprise at the time of its privatization and the property existing at the time of the dispute does not matter (see, for example, case A07-20576/2020 – the deprivation of the Bashkir Soda Company).

The courts also point out that the fact that the new owners incur expenses for the maintenance and modernization of property is not a basis for the emergence of ownership of disputed shares from the standpoint of the norms of Article 234 of the Civil Code of the Russian Federation (see, for example, case A50-24570/2021 – deprivation of the Solikamsk Magnesium Plant enterprise).

Thus, the emerging judicial practice proceeds from the fact that, regardless of the changes that have occurred, the modernization of the enterprise, and property, they will be withdrawn without any compensation in their existing form. In other words, all shares and shares in the authorized capital of companies can be liquidated in favor of the state, respectively, all property belonging to companies passes into the possession of the state.

In this regard, one should disagree with researchers, for example, N.A. Miloserdov ^[11], who justify the expediency and legality of deprivation by the fact that funds received from business are withdrawn by private individuals and are not invested in the development of the Russian economy.

Assets of exclusively Russian individuals are often deprived, even though the business has been actively developing and modernizing under their control.

Meanwhile, it should be noted that judicial practice on this issue is only being formed and it is impossible to exclude that the courts will develop a new approach to the issue of investment valuation, especially in relation to persons who can be considered as bona fide purchasers.

Limitation period

Another aspect of the process of "deprivation" is the peculiarity of the application of the limitation period by the courts.

Many cases of "deprivation" relate to relationships that took place in the early 90s. Meanwhile, after 30 years, many documents may have been lost, which limits the possibilities for presenting evidence during the consideration of the case. The statute of limitations is one of the constraints for the occurrence of such situations through the limitation of time limits for going to court.

As M.T. Belova points out, referring also to foreign sources: "The statute of limitations is needed... in order to prevent the "revival" of lawsuits that have been dormant for so long that during this time the evidence is lost, memories are erased and no witnesses can be found" ^[12].

S.V. Sarbash characterizes the importance of the limitation period as follows: "The limitation period in the broadest sense protects our present from the invasion of the long-standing past ... after a long period, it is extremely difficult to establish with the necessary accuracy what happened in the past" ^{[13, p. 1154]}.

According to the previously actively applied positions of the Presidium of the Supreme Arbitration Court of the Russian Federation:

• the plaintiff, a public authority charged with the duties of monitoring the use and safety of state-owned property, has the opportunity, within the limitation period, to obtain information on the state registration of rights to disputed objects for the proper exercise of these duties (see Resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 03/27/2012 No. 14749/11 in the case A57-15708/2010, from 01/27/2009 No. 10527/08 in case A56-28328/00, dated 12/14/2010 No. 10853/10 in case A12-17312/2009).
• when the owner of the property changes, the period for the protection of the right of the owner who did not exercise the right to judicial protection in a timely manner does not begin to flow anew (see Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 11.10.2011 No. 7337/11 in case A10-1434/2009).

Meanwhile, a different approach is currently being formed by the courts in the framework of deprivation claims. The courts conclude that the limitation period should be calculated in a different way:

• It was only following the results of the supervisory measures that ended with the submission of a statement of claim to the court that the Russian Federation, represented by its authorities, became aware of the violation of its rights (see case A50-18611/2023 – Metafrax Chemicals case, case A56-116780/2022 - deprivation of Severnaya Verf);
• The Federal Property Management Agency learned about the violations only upon receipt of the materials of the prosecutor's inspection attached to the prosecutor's statement of claim (case A33-17177/2021 – deprivation of the railway owned by Norilsk Nickel);
• the violation of the rights of the owner was of a continuing and changing nature, the right of claim arose in the Russian Federation in relation to each owner of the disputed property (see case A50-24570/2021 – the Solikamsk Magnesium Plant case);
• the application of the statute of limitations will be a way to legalize the rights to shares of persons who acquired them in a manner not provided for by law, without a legitimate reason and without the will of the owner, which is unacceptable by virtue of Article 10 of the Civil Code of the Russian Federation, violates public interests, the interests of an indefinite circle of persons (see, for example, case A32-28986/2023 – case "Machine Tool Plant named after G. M. Sedin");
• The violation of the owner's right is of a continuing and changing nature, since the claimed property was resold, transferred as a gift, and made as a contribution to the authorized capital (see case A40-155494/2014 – the case of the Bashkir Petrochemical Company).

Thus, the courts, rejecting arguments about the omission of the limitation period, indicate that the application of the limitation period contradicts Article 10 of the Civil Code of the Russian Federation. The statute of limitations actually began to flow from the moment of the inspection, during which the state body found violations of the privatization process, and the Russian Federation had claims against each subsequent owner of the property.

Separately, it should be noted that at the moment the practice of applying objective limitation periods is being formed (paragraph 2 of Article 196 of the Civil Code of the Russian Federation), since they began to expire only from 09/01/2023 (see paragraph 27 of the resolution of the Plenum of the Supreme Court of the Russian Federation dated 09/29/2015 No. 43, paragraph 9 of Article 3 of Law No. 100-FZ as amended by Federal Law No. 28 December 2016, No. 499-FZ).

Meanwhile, it follows from the existing judicial acts that the courts may refuse to apply an objective limitation period in relation to the process of deprivation.

For example, according to the decision of the Arbitration Court of the city of St. Petersburg and the Leningrad Region dated 12/18/2023 in the case A56-102386/2023, dated 12/25/2023 in the case A56-102382/2023:

"The statement of the defendants on the application of time limits, including those provided for in paragraph 1 of Article 181, paragraph 2 of Article 196 of the Civil Code of the Russian Federation, was not accepted by the court in relation to paragraphs 1, 2 of Article 10 of the Civil Code of the Russian Federation.

The application of the provisions of the law stated by the defendants will create a threat of harm, since in essence the Prosecutor's claims are justified and legitimate."

Taking into account the above, the application of the statute of limitations in deprivation proceedings is significantly limited.

The researchers propose various solutions to the problem of applying the statute of limitations in cases of reclamation of previously privatized property in favor of the state.

For example, D.A. Shushnyaev proposes the addition of Article 301 of the Civil Code of the Russian Federation with the following paragraph: "Claims for the recovery of property of the Russian Federation, subjects of the Russian Federation and municipalities from someone else's illegal possession may be filed within twenty years from the date of the beginning of illegal possession of such property" ^[14].

However, such a decision seems controversial, since the law is not retroactive and the new terms, if established, should not apply to those legal relations that arose in the 90s.

M.A. Tserkovnikov points out that when eliminating the limitation period for vindication claims of persons owning privatized property, the general prohibition of retroactive effect of the new rules on the limitation period should protect against claims by the state ^[2].

Interestingly, in the early 2000s, on the contrary, the statute of limitations was reduced by the legislator, including to stop reviewing the results of property privatization. For example, the limitation period for the claim for the application of the consequences of invalidity of an insignificant one has been reduced from ten to three years (Federal Law No. 109-FZ of 07/21/2005 amended clause 1 of Article 181 of the Civil Code of the Russian Federation).

Earlier, the authors, for example, V.V. Vitryansky ^[15], S.E. Naryshkin ^[16] pointed out the intention of the legislator by making changes to the limitation period for challenging transactions to stop the deprivation procedure.

Thus, at the moment it is not advisable to increase the limitation period for claims for the recovery of previously privatized property in favor of the state.

At the same time, it seems that the courts, when applying the limitation periods, should take into account the reasons for the existence of such periods (loss of evidence over time, ensuring stability of turnover), as well as ensure uniform application of the norms of law, explanations of the Supreme Court of the Russian Federation, regardless of whether the plaintiff is a public legal entity or a private person. 

Conclusion

Thus, it is worth considering the formation of a new approach of the courts to the issue of deprivation in recent years. It is based on the idea that violation of the privatization procedure means the absence of the will of the public owner to alienate property. As a result, the public owner has the opportunity to claim property even from a bona fide acquirer.

Judicial practice indicates a change in the approaches of courts to the issue of the limitation period for claims by a public owner. The emerging approach is based on the idea that he can find out about the violation of his right only during the verification of compliance with the requirements of privatization, regardless of when such an audit takes place. Moreover, there are also examples when courts recognize the reference to the statute of limitations as an abuse of law.

However, at present, judicial practice has not been formed in relation to a number of important aspects of the application of the limitation period. Thus, there is no established practice of skipping the objective limitation period established by paragraph 2 of Article 196 of the Civil Code of the Russian Federation, in connection with which its application is also not excluded.

It seems that the practice of deprivation that has developed in recent years requires an assessment by the Constitutional Court of the Russian Federation, as well as making necessary changes to the legislation.

Based on the conducted research, the authors conclude that before clarifying the provisions of the law, as well as clarifications from the Constitutional Court of the Russian Federation, taking into account current judicial practice, each enterprise whose property has ever been privatized should collect in advance, receive in the archives all documentation confirming the legality of privatization. The collection of evidence during the trial can be difficult, since often the category of cases under consideration is considered in one session.