THE PRINCIPLE OF UNITY VERSUS AUCTION LOGIC

THE PRINCIPLE OF UNITY VERSUS AUCTION LOGIC

THE PRINCIPLE OF UNITY VERSUS AUCTION LOGIC
The administration applied to the court for invalidation of the results of the auction for the sale of the debtor's property and invalidation of the contract of sale of the land plot. (case no. A40-41267/17).

The Court of first instance concluded that the claim was justified, invalidating the results of the auction for the sale of the debtor's property, conducted by lot No. 1, in relation to the disputed land plot. The court rejected the arguments about the administration's omission of the limitation period, as it found that the administration did not learn about the violation of its rights until a certain date, when it applied to the court for familiarization with the case materials. 

The appeal refused to satisfy the applications, since the construction of a socially significant facility on the land does not make the land itself socially significant. 

In the opinion of the court of appeal, there are essentially no grounds to consider the land plot socially significant and, as a result, there are no grounds to assert that the disputed land plot was illegally included in the bankruptcy estate and subsequently sold at auction. The court proceeded from the fact that the case file did not establish evidence of a violation of the rights of the administration by the contested auctions and evidence that the disputed property belongs to socially significant objects. 

The cassation upheld the ruling of the first instance, noting that in the present dispute, during the bidding procedure, the principle of unity of fate of the land plot and the object located on it, which has signs of immovable property, was violated. 

Taking into account the principle of the unity of the fate of the land plot and the objects firmly connected with them, it resulted in a violation of the rights of the administration, accordingly, the contract of sale of the land plot was lawfully declared invalid by the court of first instance. 

On the contrary, the inclusion of this land plot in the bankruptcy estate and its subsequent sale were carried out in violation of the provisions of the legislation. The court of Appeal allowed a situation in which a land plot under a socially significant object was transferred to private ownership based on the results of investment activities in the absence of legal grounds, which is unacceptable. This circumstance was investigated by the court of first instance, and it correctly concluded that the administration had not missed the limitation period.

 

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31.10.2025