Successful appeal against unlawful seizure of hotel property by ARMA.

In August 2023, attorney Rostyslav Salamakha was retained by a client engaged in the hotel business in Ukraine. The client reported that representatives of the Asset recovery and management agency of Ukraine (ARMA) appeared at the premises of his hotel and claimed that, pursuant to a court decision, the hotel had been seized and was to be transferred into ARMA’s operational management.

The property in question – a hotel exceeding 7,500 square meters in area and valued at approximately USD 1.3 million had been in the lawful private ownership of the client for over seven years and was being operated by a limited liability company (LLC) in strict compliance with applicable Ukrainian law.

It was revealed that a prosecutor from the Office of the Prosecutor General had indeed petitioned the Pechersk District Court for the seizure of the client’s property and its transfer to an external manager, citing the preservation of “material evidence” in a criminal proceeding to which the client was not a party.

Attorney Rostyslav Salamakha advised the client to file an appeal against the seizure order. A detailed appellate complaint was prepared and robust legal representation was ensured during the appellate proceedings.

Before the panel of judges of the Kyiv Court of Appeal, the defense presented well-reasoned arguments demonstrating that the ruling of the investigative judge of the Pechersk District Court was both unlawful and unsubstantiated. It was emphasized that the client’s property did not qualify as material evidence in any criminal proceeding, had not been acquired through unlawful means, and bore no physical traces of criminal activity.

Citing the European Court of Human Rights’ judgment in Parents’ Care Foundation v. Ukraine (October 9, 2018), counsel highlighted the ECHR’s finding that the national courts had violated Article 1 of Protocol No. 1 to the European Convention on Human Rights by unlawfully interfering with peaceful enjoyment of possessions.

In paragraph 57 of that decision, the ECHR noted inconsistencies in the Ukrainian judiciary regarding the property status of assets formerly controlled by Soviet-era trade unions, finding no consistent national legal approach and concluding that such assets constituted “possessions” within the meaning of the Convention.

In October 2023, following a comprehensive appellate review, the Kyiv Court of Appeal fully upheld the appeal submitted by attorney Rostyslav Salamakha. The court found that the prosecutor had failed to provide any admissible or sufficient evidence to justify the seizure of the client’s property. Moreover, the case file contained no factual basis or reasonable suspicion to assume that the LLC-owned real estate constituted proceeds or instruments of crime.

The court confirmed that:

• The property was lawfully acquired and held by the client;
• The underlying purchase agreement was never challenged;
• The Pechersk District Court failed to assess the proportionality and necessity of the seizure in accordance with paragraphs 5 and 6 of Part 2, Article 173 of the Criminal Procedure Code of Ukraine.

This case demonstrates how a swift and legally precise response to unlawful asset seizure – based on both domestic procedural safeguards and international human rights standards – can ensure the restoration of property rights and the protection of legitimate business operations. Attorney Rostyslav Salamakha’s successful appeal reaffirms the importance of judicial scrutiny, proportionality, and legal certainty in property-related proceedings.