Point of law: whether the demand of a person to recover the losses (expenses) is lawful, if they were borne as a result of his fulfilment of a decision of a public authority which was adopted following the request of the same person, but was knowingly not conforming to a law?

Alternative attitudes: 1) such person may  recover losses because they were caused to him by an illegal decision of a public authority (the view of the first instance court and of the panel of judges which submitted the case to the Presidium); or 2) such person may not recover losses because they were borne in the process of ordinary economic activity, and the person itself ought to know about the illegality of the decision in question (the view of the appellate court, subsequently approved by the cassational court).

Ratio decidendi: the Presidium rejected both views described above and pointed out that the legislation provides for the duty to recover losses caused as a result of the adoption by a body of State power or local self-government of an illegal act only in the event that, in spite of the illegality of the decision, the person who sustained those losses did not know and could not have known about its illegality. Therefore, the interest of the person who knew of the illegality of the decision taken upon his request is not judicially defensible.  At the same time, such person is not devoid of the right to demand either the recovery to him of the amount of unjust enrichment or making bilateral restitution under the transactions concluded in the pursuance of the illegal decision.

Practical consequences: it appears that this Judgment changes the Presidium’s previous position as expressed in the Judgment of 25 April 2006 № 12359/05. The present Judgment provides that prior court decisions in analogous cases if inconsistent with this interpretation may be reversed in the procedure and within the limits envisaged by Art 311 of the Commercial Procedure Code.