Supreme Court: Ukrainian Courts Have No Jurisdiction Over Division of Marital Real Estate Located Abroad

⚖️ Ukraine | Family Disputes | Division of Marital Property

Case Details

Case No.: 2-954/2004
Proceedings No.: 61-19125св18
Court: Supreme Court, Civil Cassation Court
Decision Date: 13 June 2018
Case Category: Family Law / Private International Law
Subject Matter: Divorce and Recognition of Property Rights
Sub-Subject: International Jurisdiction / Foreign Real Estate / Exclusive Jurisdiction
Marriage Date: 15 June 2001
International Element: Husband – Israeli citizen; wife – Ukrainian citizen
Property in Dispute: Immovable property situated in the French Republic
Jurisdictional Issue: Whether Ukrainian courts have jurisdiction to determine ownership rights in foreign immovable property
Applicable Jurisdictional Principle: Disputes concerning rights in immovable property fall within the exclusive jurisdiction of the courts of the state where the property is situated
Outcome: Ukrainian courts had no jurisdiction to determine ownership rights in the French real estate; the appellate court’s refusal of the relevant claim was upheld

Background of the Dispute

The dispute arose from proceedings concerning divorce and recognition of ownership rights in property.

The parties married on 15 June 2001. The husband was a citizen of Israel, while the wife was a citizen of Ukraine.

According to the courts, the parties’ family relationship had broken down and they had been living separately for a considerable period.

The property dispute, however, contained an important international element: the disputed immovable property was located in the French Republic.

This raised a preliminary question that had to be resolved before the merits of the ownership claim could be considered:

Did a Ukrainian court have jurisdiction to determine rights in real estate situated in France?

Jurisdiction Must Be Determined Before the Merits

The Supreme Court emphasised that, when deciding whether proceedings should be opened, a court must verify whether the dispute falls within its jurisdiction.

Where foreign citizens or foreign property are involved, the rules governing the jurisdiction of courts in cases with an international element are determined by applicable international conventions and bilateral treaties of Ukraine.

The location of the disputed asset was therefore decisive.

Real Estate Disputes Are Subject to Exclusive Jurisdiction

The Supreme Court referred to Article 22 of the Brussels I Regulation No. 44/2001, concerning jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

The source identifies disputes concerning rights in immovable property as subject to exclusive jurisdiction.

The Court also relied on Article 569-3 of the Civil Code of the Ukrainian SSR, applicable to the relevant legal relationship, under which rights of ownership and other proprietary rights in property were determined by the law of the country where the property was situated, unless otherwise provided by the legislation of the USSR and Ukrainian SSR.

Taken together, these rules supported the application of the principle traditionally associated with immovable property:

the courts of the state in which the real estate is situated are competent to determine disputes concerning rights in that property.

Why the Ukrainian Courts Could Not Determine Ownership

The claimant sought recognition of ownership rights in property located in France.

The Supreme Court agreed with the appellate court that this part of the claim could not be determined by Ukrainian courts.

The decisive factor was not simply the nationality of either spouse or the fact that the dispute arose in the context of their family relationship.

Instead, jurisdiction over the proprietary dispute was determined by the location of the immovable property.

Because the disputed real estate was situated in the French Republic, the Ukrainian courts lacked jurisdiction to determine ownership rights in that property.

Marriage Does Not Override International Jurisdiction Rules

The decision illustrates an important distinction between:

• the existence of a family relationship;

• the application of matrimonial-property rules; and

• the jurisdiction of a particular national court to determine rights in a specific asset.

A Ukrainian court may have jurisdiction over certain aspects of a matrimonial dispute without necessarily having jurisdiction over every asset connected with that dispute.

Where the claim concerns proprietary rights in foreign real estate, the international jurisdiction rules applicable to immovable property must be considered separately.

The Supreme Court’s Decision

The Supreme Court agreed with the appellate court’s conclusion regarding the claim for recognition of ownership rights in the property situated in France.

It held that, under the applicable Ukrainian legislation and international jurisdictional rules, the competent courts in a dispute concerning immovable property are the courts of the state where that property is situated.

Accordingly, the claim concerning the French real estate could not be determined by the Ukrainian courts.

By its decision of 13 June 2018, the Supreme Court left unchanged the decision of the Court of Appeal of Kharkiv Region dated 13 April 2017.

Why This Decision Matters

1. The location of real estate can determine jurisdiction

In cross-border matrimonial disputes, the location of the property may be more important for jurisdiction than the nationality or residence of the spouses.

2. One family dispute may involve courts in several countries

A divorce and related family matters may proceed in one jurisdiction, while proprietary claims concerning real estate situated abroad may have to be pursued before the courts of another state.

3. Jurisdiction must be assessed asset by asset

Where spouses own property in several countries, it is unsafe to assume that a single court can determine the legal status of the entire international property portfolio.

4. Foreign real estate requires an international litigation strategy

Before bringing a property claim in Ukraine, the claimant should establish whether Ukrainian courts have jurisdiction over the particular asset.

5. The issue is procedural as well as substantive

Even a potentially valid substantive claim may fail before its merits are considered if it is brought before a court lacking international jurisdiction.

Lions Lawyers’ Analysis

The practical importance of this decision extends beyond divorce litigation.

Cross-border family disputes frequently involve assets located in several jurisdictions: residential property, investment real estate, corporate interests, bank accounts and other assets may each raise different questions of jurisdiction, applicable law, recognition and enforcement.

The first question should therefore not always be:

“Who owns the property?”

Where foreign real estate is involved, an earlier question may be decisive:

“Which country’s courts have jurisdiction to decide who owns it?”

This distinction is particularly important when developing a cross-border litigation strategy. Commencing proceedings in the wrong jurisdiction can result in significant delay and expense without producing a determination of the substantive ownership dispute.

The decision therefore reinforces the need to map the location and legal character of each significant asset before determining where proceedings should be commenced.

Lions Lawyers advises clients on family and property disputes in Ukraine, including cross-border matrimonial disputes, division of marital property, international jurisdiction, foreign real estate, recognition of property rights and disputes involving assets located in multiple jurisdictions. We provide full-service legal representation as well as standalone legal opinions, enabling clients to assess their existing strategy and, where appropriate, identify alternative legal approaches.

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