1. The subject of the dispute is the recovery by the Lviv City Council of an apartment from the illegal possession of an individual.
2. The court of first instance, with which the appellate court agreed, dismissed the claim, reasoning that the apartment was disposed of from the possession of the City Council against its will, but there is no evidence of the acquirer’s bad faith, and shifting the consequences of illegal actions of other persons to a bona fide acquirer would be a disproportionate interference with his rights. The Supreme Court disagreed with these conclusions, indicating that the good faith of the acquirer is not an absolute obstacle to the recovery of property, since Article 388 of the Civil Code of Ukraine provides for cases where property can be recovered even from a bona fide acquirer if it was disposed of from the owner’s possession against his will. The Court also took into account that after the decisions were made by the previous instances courts, the Law came into force, which strengthens the protection of the rights of bona fide acquirers but has a retrospective effect regarding compensation for the value of the property. The Court noted that it is necessary to determine the amount of compensation for the value of the recovered property, as well as to investigate the circumstances regarding the residence and registration of other persons in the apartment at the time of its alienation.
3. The Supreme Court reversed the decisions of the previous instances courts and sent the case for a new trial to the court of first instance to establish the amount of compensation to the bona fide acquirer and to investigate other important circumstances.
