Czech court returned to hearing the dispute over rent for land with Russian buildings

The District Court for Prague 5 returned today to the hearing of a lawsuit filed by the Ministry of Foreign Affairs, which is demanding the return of rent for land in Prague's Stodůlky district on which a complex of administrative buildings and apartments is located. The court initially rejected the claim, but the verdict was overturned by the Court of Appeal. The buildings were built by the Soviet Union under a 1980 contract, but Russia transferred them several years ago to a company with an anonymous owner in Cyprus and a Russian executive. The hearing is expected to resume in July.

The owner of the buildings - a company called Simply Service Rent - began paying rent to the state in recent years, but the State Department says it is insufficient. For the period from August 2015 to the end of July 2018, Diplomatic Service is demanding more than CZK 13 million in additional payments.

Simply service Rent's legal counsel said today that the company does not dispute the claim as such, but the amount was not determined to be customary at the time and place. He said he was open to an agreement. He pointed out that the firm was part of the group until December 2015 and the claim should be calculated from that date. He also expressed the company's interest in buying the land. However, the Diplomatic Services representative said that he does not have a mandate from the client to negotiate the deal now, but if the period itself is challenged, he said a deal will probably not be possible.

Judge Martin Solomon gave the defendant company a deadline to propose an agreement that could end the dispute. The Diplomatic Service will then comment on that. Should the parties fail to reach an agreement, the court will summon an expert witness for examination, as directed by the Court of Appeal.

The District Court initially dismissed the claim, saying that the claim for unjust enrichment arose, but only from 2017, when Russia transferred the land. However, based on the expert's report, the court's decision at the time reduced the unjust enrichment claim by 50 percent. The judge said the claim was thus exhausted and no further money could be awarded. However, in its reversal order, the Court of Appeal stated that the court must continue the expert examination. It also held that Diplomatic Services was entitled to the release of unjust enrichment for the entire period in question, going back to August 2015. The higher court's legal opinion is binding on the district court.

Last May, the government rescinded nine resolutions from the 1970s and 1980s that granted land to the then-Soviet Union for free use for diplomatic purposes. Russia, according to statements by Prime Minister Petr Fiala (ODS) and Foreign Minister Jan Lipavsky (Pirates) at the time, uses the land for purposes other than diplomatic ones, so there is no reason to continue giving it away for free.

The Diplomatic Service has filed another lawsuit against the Prague City Court over the use of the land. It concerns the release of unjust enrichment for the last three years exceeding CZK 53 million.

Source: CTK
Photo: ČT24