The Supreme Court Senate of the Republic of Latvia clarifies application of agricultural land restrictions

After nearly four years of litigation across three court instances, the Supreme Court Senate of the Republic of Latvia on September 20, 2024, provided clarity regarding the application of agricultural land acquisition restrictions.

The legal team of LLC “ActusQ,” providing legal support to one of the largest national capital agricultural companies in the Zemgale region and one of the largest agricultural landowners in Latvia, LLC “Uzvara-Lauks,” led the case to the Supreme Court Senate level. The case concerned a municipality’s refusal to grant approval for the acquisition of additional agricultural land.

In its decision on September 20, 2024, in case No. A420141920 (SKA-99/2024), the Supreme Court Senate overturned the unfavorable ruling by the Administrative Regional Court and remanded the case for reconsideration. The Supreme Court Senate’s judgment provided an interpretation of the fourth and fifth parts of Article 29 of the Law “On Land Privatization in Rural Areas” (hereinafter – the Law).

The Fourth and Fifth Parts of Article 29 of the Law on Land Privatization in Rural Areas:

The first sentence of Part 4: One natural or legal person can own up to 2,000 hectares of agricultural land.
Part 5: The agricultural land leased by a person or for which the person receives direct payments at the time the maximum ownership limit came into force is not included in the 2,000-hectare limit specified in Part 4.

The Supreme Court Senate concluded that:

  • The fourth part of Article 29 applies to all agricultural land that a person can own, regardless of whether it was acquired before or after the law’s amendments took effect on November 1, 2014.
  • The legislator’s goal was to prevent excessive concentration of agricultural land while supporting agricultural production and ensuring that individuals who were already engaged in farming and receiving direct payments when the restrictions came into effect on November 1, 2014, were not adversely affected.
  • The exception in Part 5 of Article 29 also applies to agricultural land that was already owned by the individual on November 1, 2014, and for which they were receiving direct payments. Therefore, this land does not need to be counted towards the 2,000-hectare limit set by Part 4.

Impact of the Supreme Court Senate’s Ruling:

  • For nearly 10 years, these restrictions caused confusion, disputes, and hindered the growth of both national and foreign agricultural businesses and landowners.
  • This ruling provides municipalities and courts with a binding interpretation of the application of the fifth part of Article 29 of the Law on Land Privatization in Rural Areas. The decision promotes a consistent application of the Law, ensuring the principles of legal certainty and predictability concerning agricultural land ownership restrictions.
  • The Supreme Court Senate’s ruling recognizes the right of farmers to acquire additional agricultural land, even if they have formally reached the maximum area limit, provided that they owned land by November 1, 2014, for which they were receiving direct support payments. Such land is not counted towards the maximum limit, allowing for fair and balanced agricultural development.

Information prepared by: LLC “ActusQ” Team