DZP win: end of real estate dispute with Serbia

An agreement concluded on 31 December 2019 between the Republic of Serbia and the owners of real estate at Al. Ujazdowskie 23, represented by Lech Żyżylewski and Piotr Gołaszewski from the Real Estate Practice, ended a long-standing real estate dispute over the former headquarters of the Serbian Embassy in Warsaw. The parties agreed on how the Republic of Serbia would perform the final and non-revisable judgment delivered by the Court of Appeal in Warsaw of 10 July 2019, VI ACa 572/18 – the last delivered in the case – and also definitively regulated all other issues related to the real estate at Al. Ujazdowskie 23. In view of its parties, subject-matter and terms, the agreement is of a precedential nature and is the first of its kind in Poland.

It should also be remembered that the dispute with the Republic of Serbia over the real estate at Al. 23 Ujazdowskie 23 was in many respects precedential, and also complex and multi-faceted, and was brought before the courts many times, which led to judgments such as:

• Supreme Administrative Court judgment of 7 March 2013, II OSK 201/12 (ONSAiWSA 2014, No. 4, item 62), which ruled on two issues of importance to legal transactions: first, that the acquisition of real estate by a foreigner by way of acquisitive prescription requires a permit from the Ministry of Internal Affairs, and second, that a foreign state is a foreigner within the meaning of the Act on the Acquisition of Real Estate by Foreigners of 24 March 1920;
• Supreme Court order of 13 March 2014, I CSK 47/13 (OSNC 2015, No. 2, item 25), which confirmed that the acquisition of real estate by a foreigner by way of acquisitive prescription requires a permit from the Ministry of Internal Affairs and that a foreign state is a foreigner within the meaning of the Act on the Acquisition of Real Estate by Foreigners of 24 March 1920, adding two further important points: first, that a common court is bound by a decision on a permit for a foreigner to acquire real estate in Poland, and second, that a foreign state may change the nature of ownership of real estate given over to it for diplomatic purposes (from dependent to autonomous) only with the consent of a competent authority of the Republic of Poland or as a result of the foreign state obtaining another legal title to hold real estate justifying the change;
• Supreme Court judgment of 19 June 2018, I CSK 45/18 (OSNC 2019, No. 6, item 70), which states that immunity from jurisdiction does not preclude compensation being claimed from a foreign state in a Polish court for non-contractual use of real estate occupied by that state for diplomatic purposes (in this judgment, the Supreme Court also commented on the principles on which Polish courts determine legal succession to foreign states, particular countries that did not exist at the date of the judgment).

In addition, an important part of the dispute with the Republic of Serbia was the issue of the handing over of the real estate at Al. Ujazdowskie 23, which took place on 13 March 2010. However, before this happened, the District Court in Warsaw, in a judgment of 9 April 2008, I C 303/07, ruled that Serbia would be evicted from the former seat of its embassy. This judgment was furnished with a writ of enforcement on 4 January 2010 by the Court of Appeal in Warsaw, allowing the owners to take enforcement measures, which were initiated and whose admissibility was confirmed by the District Court in Warsaw in an order of 9 June 2010, V Cz 1688/10.

The key point in this respect turned out to be DZP's position that property that is not (actually) used for diplomatic purposes (i.e. despite not having been returned to its owner, it was vacated by the embassy, which moved to another location) is not the premises of a diplomatic mission within the meaning of the Vienna Convention on Diplomatic Relations of 18 April 1961 and thus is not subject to legal protection under the Convention. It is worth adding that the development of this position was also possible thanks to the exchange of views and rich correspondence with the Diplomatic Protocol of the Ministry of Foreign Affairs of the Republic of Poland.

More information on the dispute with the Republic of Serbia can be found in the Media and Publications section and in previous information on the matter:

• DZP wins a long-term dispute over the former Serbian Embassy building (25 June 2012, https://www.dzp.pl/en/deals-corner/170-dzp-wins-long-term-dispute-over-former-serbian-embassy-building),
• Another DZP win in the dispute with Serbia (7 March 2013, https://www.dzp.pl/en/deals-corner/166-another-win-for-dzp-in-a-dispute-with-serbia),
• Supreme Court: what is Serbia if not a foreigner? (13 March 2014, https://www.dzp.pl/en/deals-corner/163-supreme-court-if-serbia-is-not-a-foreigner-then-what-is-it),
• Dispute with Serbia – precedential Polish Court judgment (3 September 2015, https://www.dzp.pl/en/deals-corner/114-dispute-with-serbia-precedential-polish-court-judgment),

Finally, it is worth adding that the dispute with the Republic of Serbia that has just ended is part of the wider experience of the Real Estate Practice in the field of legal advice, including conducting disputes and court proceedings, in matters involving real estate located in Poland - also diplomatic real estate – related to foreign countries such as the Federative Republic of Brazil (Brazil), Malaysia, the French Republic (France) and the Portuguese Republic (Portugal).

In the dispute with the Republic of Serbia, the owners of the real estate at Al. Ujazdowskie 23 have been advised – continuously since 2008 – by the following persons Lech Żyżylewski and Piotr Gołaszewski from the Real Estate Practice, specialising, inter alia, in reprivatisation matters.