ON THE PROPERTY OF TRADE UNIONS

After the Revolution of 1917 most real estate on the territory of Russia was nationalized and used among other ways by the state through its conveyance into control of various socialist organizations. This conveyance of the state property into control was implemented not only in respect of nationalized property but also in respect of the realty built during the years of Soviet power. However, some property was transferred not from, but to the state (for example, most property of home industry cooperation was conveyed to state ownership when this cooperation was liquidated). This process of transfer of realty from and to the state, which continued over the entire 20th century, was not always conducted under due legal processes. For example, sometimes it was said: "transferred into disposition" or "transferred from one balance into another", etc.

In Soviet times trade unions were among the largest holders of real estate. Although the realty of trade unions was legally separated from the state property, it did not matter a lot since the status of trade unions in those times was similar to the status of governmental agencies.

Nowadays, when Russia is in transition to a new economic development system, an issue of dividing the state property and the property of trade unions that have become independent owners of their property most part of which was granted to them by the state.

In connection with one of the cases tried by the Arbitration Court it was studied whether the state property conveyed by the state "into disposition" of trade unions (a building "Polovtsev's Summer House", a valuable cultural and historic monument) still belongs to the state or trade unions have become its owner. It is interesting to note that at the time when a claim was laid, the building was demised by trade unions to a foreign company. Thus, the resolution of the dispute directly affected the interests of a foreign company operating in Russia.

By the decision of the lower court, the building was recognized as state property but the court of appeal and the court of review ruled that the disputable property belonged to the trade union. Thus, the resolution of the dispute did not have any negative consequences for the foreign leaseholder. Unfortunately, the interests of St. Petersburg were aggrieved.

On the other hand, the Russian law system does not recognize a juridical precedent as a law source, and should a similar dispute arise in the future, the court may award a different judgement. Thus, for example, in Letter ¹ ó-13/ïð-334 dated 27 November 1992 the RF Supreme Court of Arbitration ruled that conveyance of farmer markets "into disposition" of consumer cooperation organizations does not result in transfer of ownership rights when conveyed "into control". In addition, it is necessary to bear in mind that every stance of conveyance of each state owned realty to socialist organizations had its own peculiarities. That is why when deciding on a transaction in respect of such real estate, each time it is necessary to carry out a scrupulous juridical analysis of the rights to the said realty. This task is facilitated by the System of the State Registration of Rights to Real Estate introduced in Russia. However, unfortunately even a certificate of ownership held by an alienator cannot fully safeguard an acquirer or a tenant from claims of third parties for the acquired property in the future.

Juridical Practice:

The Ruling of the Arbitration Court of the North-West Region (Russian)