1. **Subject matter of the dispute:** The dispute concerned the obligation of the defendant to vacate a self-occupied plot of communal land by demolishing a self-constructed real estate object and cancelling the record of ownership thereof in the State Register.
2. **Court’s arguments:** The Supreme Court emphasized that a settlement agreement must be concluded on the basis of mutual concessions and relate exclusively to the rights and obligations of the parties, without going beyond the subject matter of the dispute if this infringes upon the interests of third parties. The Court established that the Kharkiv City Council, by concluding the settlement agreement, had effectively undertaken an obligation to lease the land plot to the defendant without conducting mandatory land auctions, which contradicts the requirements of the Land Code of Ukraine. Such an arrangement goes beyond the subject matter of the dispute, as the defendant had not filed any counterclaims, and the agreement itself contains no real concessions on their part. The Supreme Court noted that local self-government bodies cannot use settlement agreements to carry out opaque redistribution of communal land, bypassing competitive procedures. Consequently, the courts of lower instances erroneously approved an agreement that contradicts the law and violates the rights of the territorial community. The Supreme Court in this case reaffirmed its position, set forth in the ruling dated April 2, 2025 (case No. 132/50/24), regarding the impossibility of exceeding the scope of the subject matter of a dispute in a settlement agreement if doing so results in a violation of mandatory provisions of land legislation.
3. **Court’s decision:** The Supreme Court granted the prosecutor’s cassation appeal, set aside the ruling of the court of first instance and the resolution of the court of appeal, and remanded the case to the court of first instance for continuation of the proceedings on the merits.
