Successful resolution of dispute over ownership of utilities

We represented Latvijas Pārtikas Ražotājs (“LPR”), a well-known Latvian food and confectionery producer which developed the “Latvijas Labumi” trade mark, in a three-year dispute over issues of ownership of utilities needed for operation of LPR’s immovable property, a production facility.

Essence of the dispute

A court claim was brought against several defendants ‒ including LPR ‒ by Dzirciema Centrs, which asserted that it had obtained ownership of the utilities needed for operation of LPR’s production facility.

The claimant alleged that because the disputed utilities and the production facility had been constructed on the basis of different construction permits, and because the utilities partially cross the borders of the production facility, they could be sold separately, and that the initial developer of the property had indeed sold them. As the disputed utilities had not been recorded in the Land Register as an independent immovable property, the claimant substantiated its title by the fact of construction of the utilities (i.e., the utilities were allegedly built as a separate property) and the purchase contract.

Notable case law

This matter involved important and interesting questions about ownership of property that is not recorded in the Land Register, as well as the legal status of external utilities that the property requires. Although these questions have regularly caused problems in practice, they have seldom been reviewed in court. A negative case result for LPR would have adversely affected the operation of its production facility.

Favourable results

The regional court supported LPR’s position, finding that the disputed utilities should be recognised as an ancillary item in the meaning of the Civil Law and they cannot be disposed of separately from the main item (in this case – the production facility). Therefore, the claim was rejected in full, and LPR was awarded compensation for the litigation costs. Although the claimant filed a cassation claim against the regional court judgment, the Supreme Court refused to initiate cassation on the basis that there were no grounds to consider that the case result might have been incorrect.

Our advice and team

Legal assistance in this matter was provided and the client was represented in court by partner Lelde Laviņa with senior associate Jorens Jaunozols.