Minimum Market Value as a Criterion for Recognizing Assets as Unjustified

Mykola Melnyk

Doctor of Law, Professor, Lawyer

Recognition of assets as unjustified and their recovery into the state revenue is a process carried out according to a legally defined algorithm.

Rule One: the court recognizes assets as unjustified if, based on the evidence submitted, it is not established that the assets or funds necessary to acquire the assets, regarding which a claim for recognition as unjustified has been filed, were acquired from lawful income (Art. 291 of the Civil Procedure Code).

Rule Two: to file such a claim and for the court to recognize assets as unjustified, it is necessary to establish the legally prescribed (part 2 of Art. 290 of the Civil Procedure Code) difference between the value of the disputed assets and the lawful income of the person authorized to perform state or local government functions.

Rule Three: to determine the value of such assets, the following are applied: 1) the acquisition cost; 2) in case of gratuitous acquisition or acquisition at a price lower than the minimum market value, the minimum market value of such or similar assets as of the acquisition date (part 3 of Art. 290 of the Civil Procedure Code).

Thus, in the first case, the indicated difference is established by comparing the acquisition cost of the assets and the lawful income of the person authorized to perform state or local government functions. It is presumed that such assets were acquired at a price not lower than the minimum market value.

In the second case, establishing the difference between the value of disputed assets and the lawful income of the person requires determining the minimum market value of such or similar assets as of the acquisition date.

Therefore, in this process, the law assigns a special role to the minimum market value – it is the sole criterion for evaluating disputed assets with subsequent comparison to the lawful income of the person (establishing the indicated difference).

This means that:

– determining the minimum market value of disputed assets is a mandatory condition for recognizing them as unjustified;

– no other comparative criterion can be the basis for the claim and court decision recognizing assets as unjustified and recovering them into the state revenue.

However, as research of judicial practice in this category of cases shows, prosecutors (claimants) and courts do not always comply with these legal provisions.

Minimum Market Value & Market Value

The problem arises already at the "start" of the process and concerns the understanding of minimum market value as a separately provided legal category, and its relation to other types of value, primarily market value.

It should be noted that market value of property is the value at which the property can be sold on the open market, i.e., at a price agreed upon by both seller and buyer. In this regard, it is appropriate to cite the common thesis that a thing (property) is worth as much as someone is willing to pay for it (or, alternatively, as much as it can be sold for).

Market value is a range of prices within which the sale of property (asset) can occur. Within this range, there is at least a minimum, average, and maximum market value.

At the same time, for recognizing assets as unjustified, not just any market value of the assets is applied, but specifically their minimum market value. That is, the value which "is the lowest of all possible values at which the respective asset or similar property could have been alienated under real market conditions on the acquisition date, by agreement between informed, prudent, and uncoerced parties" (Decision of the Administrative Court of the High Anti-Corruption Court dated April 10, 2026, case No. 991/4079/25).

Generally, practice in these cases is oriented towards establishing the lowest value of a certain asset within the market price range.

For example, when deciding in the mentioned case on determining the minimum market price of a vehicle [regarding which a claim for recognition as an unjustified asset was filed], the panel of judges noted that "the value was determined using a comparative approach with the formula provided by the Methodology of Commodity Expertise and Evaluation of Wheeled Vehicles, adjusting the average market value downward considering the year of manufacture, operating conditions, and technical condition. The court concluded that such adjustment effectively allowed determining the lowest possible sale price of vehicles under real market conditions, which corresponds to the concept of minimum market value."

In another case, the appellate court upheld the first instance court’s order to appoint an appraisal and construction expertise, where experts were asked: 1) what is the minimum market and market value of the respective apartment with the existing condition as of the acquisition date; 2) what is the minimum market and market value of the respective parking space on a certain date; 3) what is the minimum market and market value of the garage on a certain date.

Thus, courts of first and appellate instances clearly distinguished these two different categories by content and legal significance, emphasizing that without such expertise it is impossible to correctly determine the value of disputed assets when there are significant discrepancies in the case materials regarding their value (Decision of the Administrative Court of the High Anti-Corruption Court dated May 12, 2026, case No. 991/7578/25).

However, despite the clear and unambiguous legal provision on applying exclusively the minimum market value for recognizing assets as unjustified, higher courts often have to emphasize this point, directing the efforts of claimants and decisions of lower courts into the legal path.

For instance, when assessing the first instance court’s decision and analyzing the parties' arguments, the panel of judges of the Administrative Court of the High Anti-Corruption Court stated that it considers the appraiser’s consultations, which "determined the minimum market value of land plots as of their acquisition dates, in accordance with the requirements of part 3 of Art. 290 of the Civil Procedure Code of Ukraine". At the same time, it considers as inadmissible evidence the conclusions of another appraiser, which established the market value of the land plots (Decision dated April 7, 2026, case No. 991/2834/25).

Meanwhile, there is practice where law enforcement entities demonstrate different approaches to recognizing assets as unjustified.

Terminological Diversity

When studying this category of cases, the diversity of applied terms regarding the valuation of disputed assets is striking. This should not be the case in principle, since, firstly, each term has its own legal meaning, and secondly, according to the law, the only comparative criterion for recognizing assets as unjustified is their minimum market value. Only the minimum market value of assets can be the basis for initiating the recognition of assets as unjustified, filing a claim, and satisfying such a claim by the court.

However, entities involved in the process of initial material collection, preparation and filing of claims, case consideration, and court decision-making (NACP-NABU-SAP-HACC) use different terminological names for the value of the same disputed assets: market value, average market value, minimum market value, minimum value, real value, actual value, actual market value, approximate market value, actual sale price, etc.

During the phased progress of the case, these terms are manipulated, "converted" from one term to another, and ultimately they are specifically transformed into "minimum market value."

In this way, the circumstances of the case are brought under the provisions of part 3 of Art. 290 of the Civil Procedure Code to create the appearance of legitimacy of the claimant’s method of determining the value of the respondent’s assets and the existence of grounds for recognizing the disputed assets as unjustified.

At the same time, the claimant does not consider it necessary to at least justify the transformation made from one type of asset value to another – for example, from market or average market value to minimum market value. The court accepts such "equating" (identification) by the claimant of other types of value with minimum market value and bases its court decision on it.

Lack of Methodology for Determining the Minimum Market Value of Assets

The legal "equating" of different types of market value of disputed assets, their substitution for one another, and ultimately their transformation into "minimum market value" is explained, among other things, by the absence in Ukraine of a methodology for determining the minimum market value of certain assets. Allegedly, there is a regulatory methodology for determining the market value of wheeled vehicles, real estate (including land plots), etc., but there is currently no methodology for determining the minimum market value of such objects. And this supposedly allows the market value established according to the relevant methodology to be considered as the minimum market value of the asset.

However, such reasoning has no legal basis. Moreover, it may be additional evidence that in fact the minimum market value of disputed assets in the case was not determined.

If the state in the law defined the minimum market value of assets as a key criterion for recognizing assets as unjustified, it should have taken care of developing and approving a methodology for determining the minimum market value of assets. As has been done for determining the market value of vehicles, real estate objects, and other property assets.

But if the state has not done this, it does not mean that the prosecutor (as claimant) and the court have the right to ignore the law and apply a different method of determining the value of assets than that provided for in part 3 of Art. 290 of the Civil Procedure Code. The absence of an approved methodology for determining the minimum market value of assets cannot be a reason for arbitrary (more precisely – capricious) application of Articles 290 and 291 of the Civil Procedure Code, in particular for determining the difference between the value of assets acquired by a person and their lawful income by determining not the minimum market value of these assets, but some other value.

Thus, the problem of determining the minimum market value of disputed assets is a problem of the state, which, firstly, in no case can be shifted onto the respondent, and secondly, can be lawfully solved by existing means.

As practice shows, this can be done by expert means, when experts using existing methods reasonably "arrive" at the minimum market value of disputed assets, rather than establishing their market value, which the claimant and court then transform into minimum market value for reasons known only to them.

Ultimately, applying the comparative method, based on comparing sales prices of such or similar assets, the expert establishes the lowest and highest prices available on the market as of the acquisition date. Obviously, the lowest price of the assets should be recognized as their minimum market value.

However, in practice, the smallest numbers (lowest prices) are often used by experts and appraisers only for comparative analysis, while the final result is "derived" as the median value – the number in the middle of an ordered set of data from smallest to largest. This way, the average market value of disputed assets is established, which by law is not suitable for establishing the difference provided for in part 2 of Art. 290 of the Civil Procedure Code between the value of disputed assets and the lawful income of the person. Despite this, claimants and courts base the claim and court decision on such expert research/valuation results.

Considering this problem within one of the cases, the Administrative Court of the High Anti-Corruption Court stated that the absence in legislation of a legal definition of the term "minimum market value" and a special methodology for its calculation does not prevent establishing such value within the court proceedings (Decision dated April 10, 2026, case No. 991/4079/25).

Eliminating Significant Discrepancies in the Value of Disputed Assets

Essentially, the essence of cases on recognizing assets as unjustified boils down to a dispute over the value of certain assets, where each party (claimant and respondent) proves "their" value of such assets. In such cases, the court makes a decision in favor of the party whose body of evidence is more convincing compared to the other party’s evidence (part 4 of Art. 89 of the Civil Procedure Code).

Thus, using available opportunities to prove their case, parties often present different values for the same asset. Moreover, such value can differ even by an order of magnitude.

There are situations where the case contains five or more documented variants of the value of the same asset.

This indicates the existence of significant discrepancies in determining the value of disputed assets, which is crucial for resolving the specific dispute.

Under such circumstances, the claimant, if strictly adhering to the law, is obliged at the stage of preparing the claim to eliminate such discrepancies and provide factual data in the claim confirming the unjustified nature of the person’s assets, i.e., the existence of the difference defined in part 2 of Art. 290 of the Civil Procedure Code between the value of such assets and the lawful income of such person. And such difference, as repeatedly emphasized, can only be determined by establishing the minimum market value of the asset and comparing it with the lawful income of the person.

However, claims are submitted to the court in which all available variants of the value of the disputed asset (established by NACP, NABU, appraiser, expert, confirmed by purchase-sale agreements, etc.) appear in the text and annexes, one of which is presented as the minimum market value (often without any or with inadequate justification for recognizing such value).

The respondent adds their own variants to this set of asset value options. Then the court finds itself in a situation where, from a large number of asset value variants, it must choose the one in which the minimum market value of the disputed asset is actually recorded. If, of course, such a variant is present in the case materials at all.

Judicial practice holds that "the presence of contradictory information in the case materials indicates the existence of significant discrepancies in determining the value of disputed assets, which is crucial for resolving the dispute" (Decision of the Administrative Court of the High Anti-Corruption Court dated May 12, 2026, case No. 991/7578/25).

Eliminating significant discrepancies in the value of disputed assets in the case materials becomes a mandatory condition for the court to properly resolve the case on the merits. However, as research of court decisions shows, the court does not always properly resolve this discrepancy problem.

There are cases where the court resorted to making a "volitional" decision based on the principle "the court thinks so" – the court chose one of the available variants and ordered it to be considered the minimum market value of the disputed asset without providing any legal arguments. Although the chosen variant did not establish the minimum market value of the disputed asset. Such an approach is at least a violation of the provisions of Art. 263 of the Civil Procedure Code, according to which the court decision must be reasoned.

The legal "oddity" of such an approach is also that among all the variants of the value of disputed assets in the case, the court could recognize as the minimum market value the variant that provided for their maximum market value.

Who is More Important for the Court – Appraiser or Expert?

From a formal point of view, such a question should not arise in principle given the legislative status of these entities and the legal significance of the results of their activities.

However, when considering cases of this category, this question arises quite often and is resolved differently by courts. Its resolution is complicated when there are consultations from several appraisers and conclusions from several experts in the case.

Determining, so to speak, the evidentiary priority of the appraiser’s consultation or the expert’s conclusion (which the law distinguishes as a separate type of evidence), the court in some cases appeals to their content (applied methodology, reasoning, characteristics of comparative objects, etc.), in others – simply relies on the procedural status of these documents.

For example, the appellate court in one case stated the superiority of expert conclusions over consultations, noting that consultations of the respective private enterprise, "attached by the prosecutor to the claim, although the result of an independent appraiser’s work, by their legal nature are not the result of procedural activity of a court expert and cannot replace the conclusion of a court expertise" (Decision of the Administrative Court of the High Anti-Corruption Court dated May 12, 2026, case No. 991/7578/25). Obviously, the court used the provisions of part 4 of Art. 74 of the Civil Procedure Code, according to which assistance and consultations of a specialist do not replace the expert’s conclusion.

At the same time, in other cases, the court "easily" based its decision on the appraiser’s consultations (private enterprise). However, in some of these cases, expert conclusions simply did not exist, so the court had no choice.

It is clear that when assessing the body of evidence, what matters is not so much the formal status of the document but the legal importance of the data it contains and on the basis of which the presence or absence of circumstances relevant to the case can be established.

Especially since, as analysis of expert conclusions shows, not all of them can be recognized as suitable for basing the court’s decision on. Even if considering purely formal aspects – grounds for appointing the expertise, choice of expert, their competence, applied methodology, etc.

This is especially true in situations where the prosecutor at the stage of collecting materials for the claim initiates an expertise and asks the expert to establish not the minimum market value of disputed assets (as required by law), but another – market or average market value.

In such cases, from the outset, the grounds are created for recognizing assets as unjustified in an unlawful manner.

Notably, in many cases, the claimant party (including at the stage of collecting primary documents by the NACP) uses the services of the same appraiser (private enterprise). On the one hand, there is nothing illegal about this, of course, but on the other hand, this may give the other party (respondents) grounds to doubt the objectivity of the valuation of their assets and the validity of the claim filed against them. Especially when the same appraiser is involved in valuing different types of assets (houses, vehicles, land plots, apartments, etc.).

Market Value – Not an Economic Category?!

The correctness of the court decision largely depends on the conceptual approach the court applies when resolving the case.

In the cases studied, such approaches differ significantly, particularly regarding the understanding of the essence of minimum market value as a comparative criterion for recognizing assets as unjustified.

Thus, emphasizing that civil procedural law does not require mandatory expertise to determine the minimum market value of assets, in some cases the court proceeded from the premise that minimum market value is not an economic category requiring special knowledge, but a question of law. Accordingly, it is determined in each specific case taking into account the evidence submitted by the parties and the legally defined standard of proof.

The fact that minimum market value is determined in each specific case considering the evidence submitted by the parties and the legally defined standard of proof is beyond doubt. Also, no evidence has predetermined strength for the court, and the court evaluates evidence according to its inner conviction. These are direct legal provisions (Art. 89 of the Civil Procedure Code). The expert’s conclusion is no exception, which does not have predetermined strength and is evaluated by the court along with other evidence. However, the court’s rejection of the expert’s conclusion must be motivated in the court decision (Art. 110 of the Civil Procedure Code).

However, the assertion that minimum market value "is not an economic category requiring special knowledge" seems erroneous.

In fact, the term "value" is an economic category reflecting in monetary terms the worth of a commodity for the market. Based on market characteristics, the measure of an asset’s value is the price of its possible realization on the market. Market value is also an economic category with a normative definition. Ukraine has national standards for property (real estate) and property rights valuation, methodologies for expert monetary valuation of various types of property, which include definitions of market value. Some of these issues are regulated by law.

For example, at the legislative level, the concept of the value of a land plot is defined (understood as the equivalent of the land plot’s value expressed in the probable amount of money the seller can receive), as well as the concept of expert monetary valuation of land plots, understood as the result of determining the value of a land plot and related rights by an appraiser (expert in land plot valuation) using a set of approaches, methods, and valuation procedures that ensure data collection and analysis, calculations, and preparation of results in the form of a report (Law "On Land Valuation").

The incorrectness of conclusions that minimum market value is not an economic category and its determination does not require special knowledge is also confirmed by the legal position of the appellate court expressed in cases on recognizing assets as unjustified and recovering them into the state revenue.

Thus, deciding in such a case on appointing an appraisal and construction expertise to establish the market value of an apartment [regarding which a claim for recognition as an unjustified asset was filed], the panel of judges of the Administrative Court of the High Anti-Corruption Court stated that:

– "agrees with the conclusions of the first instance court on the necessity of applying special knowledge to establish the minimum market value of the disputed property and, accordingly, on the advisability of appointing a court appraisal and construction expertise to resolve contradictions regarding the value of disputed real estate objects";

– "the presence of contradictions in the information submitted by the parties regarding circumstances relevant to the case and the assessment of which obviously is not covered by knowledge in the field of law is one of the grounds for involving an expert. Without conducting expertise in this case, it is impossible to establish the value of disputed assets at the time of their acquisition";

– "the first instance court reached a reasoned conclusion on the advisability of appointing a court appraisal and construction expertise, "considering the need to clarify circumstances relevant to the case and directly related to the grounds and subject of the claim, the establishment of which requires the presence of special knowledge in a field other than law";

– "agrees with the conclusions of the first instance court on the necessity of applying special knowledge to establish the minimum market value of the disputed property and, accordingly, on the advisability of appointing a court appraisal and construction expertise to resolve contradictions regarding the value of disputed real estate objects" (Decision of the Administrative Court of the High Anti-Corruption Court dated May 12, 2026, case No. 991/7578/25).

Notably, in cases where the court adhered to the position that minimum market value is not an economic category but a question of law, the court did not provide any legal criteria for determining the minimum market value of disputed assets. Moreover, contrary to its own position, it recognized such asset value based on the expert’s conclusion, which, moreover, established not the minimum market but simply the market value. This generally confused the situation regarding the determination of both the minimum value of disputed assets and the grounds for recognizing them as unjustified.

Conclusions

Establishing the minimum market value of disputed assets is a necessary condition for recognizing such assets as unjustified and recovering them into the state revenue.

The claimant has no right to prove the unjustified nature of disputed assets, and the court – to recognize assets as unjustified by applying criteria other than the minimum market value of such assets.

It is erroneous to recognize minimum market value as a "question of law" that does not require special knowledge. Essentially, all issues the court resolves during the case are questions of law. At the same time, this does not negate the need to apply special knowledge in the relevant field to establish the minimum market value of a particular asset. It is difficult to imagine how the court can correctly determine the price of an asset using exclusively "legal criteria."

The process of recognizing assets as unjustified from the outset must be oriented towards establishing the minimum market value of the disputed asset.

Accordingly, the expert/appraiser must be tasked with establishing precisely the minimum market value of the disputed asset. Referring to the expert/appraiser’s inability to determine the minimum market value of the disputed asset due to the absence of an approved methodology for determining the minimum market value of a particular type of asset cannot serve as an argument for assigning them the task of establishing another value of such an asset.

The application by relevant authorities of different approaches to determining the value of assets during the initiation and consideration of cases on recognizing assets as unjustified leads to incorrect establishment of circumstances relevant to resolving the case and violates the principle of legal certainty as a component of the rule of law.

This deprives the possibility of forming a unified judicial practice in this category of cases based on legal provisions. Especially in situations where courts prefer to form such practice according to the paradigm and arguments of claimants, without delving into verifying the correctness of approaches and the validity of determining the difference between the value of disputed assets and the lawful income of the person, as provided in part 2 of Art. 290 of the Civil Procedure Code. In such a situation, respondents, on whom the law imposes the burden of disproving the unjustified nature of assets, find it difficult to defend their position and expect a lawful court decision.

Analysis of several cases gives the impression that the court sees its task not in clarifying sufficient proof of the unjustified nature of assets based on evidence submitted by the claimant, but in finding arguments in favor of the prosecutor’s claim. However, the law does not set the task for either the claimant or the court to recognize assets as unjustified at any cost and by any means. According to the Constitution and the Civil Procedure Code, this can only be done on lawful grounds, in a lawful manner, and using lawful means.

Failure to comply with such provisions, in particular regarding determining the minimum market value of disputed assets, will indicate, on the one hand, the unjustified nature of the claim for recognizing assets as unjustified, and on the other – the presence of lawful grounds for the court to refuse to satisfy such a claim.

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