The conclusion of a property management agreement in itself does not result in the transfer of ownership to the manager. The manager may acquire the status of a fiduciary owner only if this is expressly provided for by the terms of the agreement.
This conclusion was reached by the Supreme Court, consisting of judges of the joint chamber of the Economic Court of Cassation, in its resolution of May 16, 2025 in case No. 903/421/24.
The cause of the dispute was the question of the presence / absence of grounds for satisfying the complaints of both the plaintiff and the defendant against the actions of the private enforcement agent in enforcement proceedings.
The court of first instance satisfied the complaint of the defendant (debtor), recognizing the private enforcement agent’s inaction as unlawful, which consisted in not stopping the execution of enforcement actions in enforcement proceedings and not lifting the arrest of all funds / electronic funds and property belonging to the debtor, within the amount of the recovery, taking into account the main remuneration of the private enforcement agent and the costs of enforcement proceedings.
The consequence of this decision was the obligation of the private bailiff to stop the execution of enforcement actions for the forced execution of the court order, to lift the arrest of the property and all funds / electronic money held in open accounts / electronic wallets belonging to the debtor, within the amount of the recovery, taking into account the main remuneration of the private bailiff and the costs of enforcement proceedings.
The court of appeal changed the decision of the local economic court in the motivational part, and left the rest unchanged, indicating that the private bailiff did not have the right to open enforcement proceedings and carry out enforcement actions with respect to the debtor’s property, since the state’s share in its authorized capital, taking into account its management by ARMA, is more than 25%.
The Supreme Court overturned the decision of the court of appeal and left the decision of the local economic court unchanged, making the following conclusions.
The conclusion of a property management agreement in itself does not result in the transfer of ownership to the manager. The manager may acquire the status of a fiduciary owner only if this is expressly provided for in the terms of the agreement.
Management of the seized property of the ARMA is in the nature of a temporary special-purpose authority that arises on the basis of a court decision or the consent of the owner. It has the characteristics of temporary (valid until the arrest is canceled or the proceedings are completed) and targeted (serves to preserve the property). At the same time, the manager, in accordance with Part 3 of Article 21 of the Law No. 772-VIII “On the National Agency of Ukraine for the Identification, Search and Management of Assets Obtained from Corruption and Other Crimes”, does not have the right to alienate the assets accepted for management by him.
The owner of the asset retains the right of ownership even in the event of the transfer of the property to the management of the ARMA. Management does not change the title of ownership – it only limits the exercise of certain powers, such as use or disposal, and only for the duration of the arrest.
Management of assets transferred in accordance with Art. 100 of the Criminal Procedure Code and the provisions of Law No. 772-VIII, is not identical or equivalent in legal content to the right of ownership provided for in Articles 316 and 317 of the Civil Code.
Since asset management carried out by ARMA does not change the title of ownership and does not convert assets into state property, the fact that a share in the authorized capital of the company is under the management of ARMA cannot be a basis for prohibiting a private executor from carrying out compulsory execution of a court decision.
The executor (state / private) is not a participant in the debt settlement procedure specified by the Law “On Measures Aimed at Overcoming Crisis Phenomena and Ensuring Financial Stability in the Natural Gas Market”. In accordance with Clause 15 Part 1 of Art. 34 of the Law “On Enforcement Proceedings” the executor has the obligation to stop the execution of executive actions in enforcement proceedings for the forced execution of the order (except for the costs of paying the court fee), and also in accordance with Part 4 of Article 35 of this Law – to lift the arrest of the debtor’s property and funds.
According to the Supreme Court.
