The dispute dates back to 2003, when the French company entered into long-term lease agreements with the Krasnodar Department of Property Relations to construct a major production plant. While the facility was completed in 2004, a 2005 administrative decree retrospectively classified the leased parcels as protected agricultural land, effectively banning any new construction—including critical wastewater treatment infrastructure planned for 2024.

Advocates Bureau YUG initiated legal action after regional authorities ignored the clients request for reclassification, claiming that current statutes provided no mechanism for such an exclusion. The case faced stiff opposition, as the government relied on established North Caucasus District appellate precedents which held that leaseholders lacked the legal standing to challenge land-use designations. Furthermore, the authorities argued that the land size was disproportionate to the existing building footprints and that the client had failed to exhaust administrative remedies.

However, ABYs legal team successfully argued that the restrictive classification directly impaired the leaseholders rights and that the "proportionality" rule should not be used to stifle industrial development or necessary infrastructure upgrades. Crucially, the firm persuaded the court that prior negative precedents were inapplicable to the specific circumstances of this international industrial project.

The court found the arguments compelling and partially granted the claim, ordering the Department of Property Relations to prepare the necessary administrative decree for the lands exclusion from the protected registry.

The client was represented by ABYs Partner Sergey_Radchenko and attorney Alexey Demekhin.