In a ruling dated September 21, 2026, regarding Case No. 757/49906/25, the Supreme Court—sitting as a panel of judges of the Third Judicial Chamber of the Civil Cassation Court—addressed the question of whether a citizen may demand from the state a share of the profits derived from the sale of timber from Ukraine’s forests, as well as compensation for non-pecuniary damage resulting from the absence of a mechanism for distributing such profits.
The issue concerns the application of provisions regarding state liability for damage caused by the unlawful decisions, actions, or omissions of public authorities—specifically Article 1173 of the Civil Code of Ukraine.
Case Background
In October 2025, a citizen filed a lawsuit against the State of Ukraine—represented by the State Agency of Forest Resources of Ukraine—seeking compensation for pecuniary and non-pecuniary damage.
The plaintiff maintained that his claims constituted a legal demand for compensation regarding the state’s actual use of resources—specifically timber from Ukraine’s forests, which are the property of the Ukrainian people. He argued that while the state sells timber and generates revenue from it, it fails to distribute these proceeds among citizens, has not established a compensation mechanism, and does not inform the public about sales volumes. The plaintiff had previously submitted inquiries to public authorities to ascertain the volumes of timber sold. Subsequently, by calculating the arithmetic mean value of timber across various regions, he estimated the pecuniary damage at UAH 13,872. He assessed the non-pecuniary damage at UAH 10 million. He sought a ruling acknowledging the violation of his right to a share of the income derived from the sale or use of timber from Ukraine’s forests, recognizing his right to compensation for the use of a portion of this resource, acknowledging the violation of his property rights as a Ukrainian citizen, and recognizing the infliction of non-pecuniary (moral) damage. In total, the plaintiff requested the recovery of UAH 10,013,873 from the State Budget of Ukraine.
By a decision dated November 13, 2025, the Pechersk District Court of Kyiv dismissed the claim. The Kyiv Court of Appeal upheld this decision in a ruling dated March 18, 2026. In his cassation appeal, the plaintiff requested that the lower courts’ decisions be set aside and the claim granted. Specifically, he cited the courts’ failure to take into account the legal conclusions of the Supreme Court, as well as procedural violations that occurred during the case proceedings.
The State Agency of Forest Resources of Ukraine opposed the cassation appeal. It noted that the right to use forest resources can be either general or special, and that timber harvesting is conducted under the procedure for special forest use based on appropriate permits. In the defendant’s view, the plaintiff failed to prove the existence of any unlawful state decision that caused him property damage or non-pecuniary harm.
The courts established that 32,468 special permits for the special use of forest resources were issued in 2023, 87,446 in 2024, and 57,146 in 2025 (as of September 1). The total volume of harvested timber amounted to 15.2 million cubic meters. …cubic meters in 2023, 14.9 million cubic meters in 2024, and 5.8 million cubic meters in 2025, as of July 1.
Position of the Supreme Court
The Supreme Court indicated that, pursuant to Parts 1–3 of Article 22 of the Civil Code of Ukraine, a person who has suffered losses as a result of a violation of their civil right is entitled to compensation for such losses. Losses comprise actual damages and income that the person could realistically have received under ordinary circumstances had their right not been violated. In accordance with Article 1166 of the Civil Code of Ukraine, property damage caused by unlawful decisions, actions, or omissions must be compensated in full by the person who caused it. Article 56 of the Constitution of Ukraine guarantees everyone the right to compensation at the state’s expense for material and non-material damage caused by unlawful decisions, actions, or omissions of state authorities in the exercise of their powers. At the same time, the Court noted that Article 1173 of the Civil Code of Ukraine establishes a special rule regarding state liability.
Damage caused to a natural or legal person by unlawful decisions, actions, or omissions of a state authority, an authority of the Autonomous Republic of Crimea, or a local self-government body in the exercise of their powers shall be compensated by the state, the Autonomous Republic of Crimea, or the local self-government body, regardless of the fault of such bodies. In this regard, the Supreme Court noted that Articles 1173 and 1174 of the Civil Code of Ukraine constitute special provisions establishing specific rules for the tort liability of state authorities and officials. However, they do not obviate the need to prove the other elements constituting a civil wrong.
A necessary basis for holding a state authority, a local self-government body, or officials thereof liable for damages is the existence of three conditions:
unlawful decisions, actions, or omissions;
the existence of harm;
a causal link between the unlawful actions and the harm caused.
The Court specifically emphasized that the absence of even one of these elements precludes liability for the harm caused.
The Supreme Court also noted that, in tort-related legal relationships, it is the plaintiff who bears the burden of proving the existence of harm, the unlawful nature of the tortfeasor’s conduct, and the causal link between such conduct and the harm caused. The burden of proving the fact of the harm and its extent, as well as the causal link between the wrongful act and the harm, rests with the plaintiff. In this context, a causal link—as a mandatory element of liability—implies that the harm must be an objective consequence of the tortfeasor’s conduct; the unlawful actions must constitute the cause, and the harm the consequence, of such conduct.
The Supreme Court also separately analyzed the legal status of forests.
The Supreme Court noted that, pursuant to Article 7 of the Forest Code of Ukraine, forests located within the territory of Ukraine are objects of ownership by the Ukrainian people. State authorities and local self-government bodies exercise ownership rights on behalf of the people within the limits defined by the Constitution of Ukraine. At the same time, forests may be subject to state, municipal, or private ownership.
The Court also cited provisions of the Forest Code of Ukraine regarding the permanent and temporary use of forests. Specifically, temporary forest users operating under long-term use arrangements have the right to obtain produce and derive income from its sale, while also being obliged to make timely payments for the use of forest resources. The Supreme Court noted that the courts of first and appellate instance had established the following: the plaintiff failed to prove exactly which unlawful decisions, actions, or omissions by the State Agency of Forest Resources of Ukraine caused him harm; he failed to provide evidence of the unlawfulness of such actions; and he failed to prove that the harm was caused specifically as a result of the Agency exercising its administrative authority.
Likewise, the plaintiff failed to provide evidence regarding the actual existence and amount of the harm, other than his own calculation based on data concerning timber harvesting volumes by entities operating under special permits. The Supreme Court also upheld the conclusion that there were no grounds for awarding compensation for non-pecuniary (moral) damage.
The Court noted that no evidence was established showing that the plaintiff had suffered non-pecuniary damage due to the defendant’s unlawful actions. Furthermore, the plaintiff failed to prove any violations of applicable law by the defendant that could have resulted in either pecuniary or non-pecuniary damage to him. Consequently, the Supreme Court dismissed the cassation appeal and left the lower courts’ decisions unchanged. Thus, in this case, the Court proceeded on the premise that, in order to recover damages from the State under Article 1173 of the Civil Code of Ukraine, a specific set of mandatory conditions must be established: the unlawfulness of a decision, action, or omission by a public authority; the existence of harm; and a causal link between the unlawful conduct and the harm.
