Russia owned a lease to a plot of land that is about 300m from Parliament House in Canberra and intended to build a new embassy building there to replace an older building elsewhere in the capital.
But in 2023, the Australian government introduced a law to cancel the lease after receiving “very clear security advice as to the risk presented by a new Russian presence so close to Parliament House,” Prime Minister Anthony Albanese said at the time.
Russia challenged the law in front of the High Court of Australia, arguing parliament was not authorised under the constitution to pass such a law.
On Wednesday, the court ruled unanimously that the Home Affairs Act 2023 validly invoked parliament’s constitutional power to seize land on “just terms,” though it said Moscow was entitled to compensation.
The Russian government secured a 99-year lease for diplomatic use of the site in 2008, paying A$2.75 million (US$1.79 million).
Construction on the new site kicked off but was never completed. Russia’s existing embassy is in Griffith, a suburb.
Australia’s government argued that the lease’s cancellation was supported by parliament’s power to make laws for the nation’s territories, including the Australian Capital Territory, where Canberra is located.
It added that it did not need to pay Russia “just terms” because the constitution only required compensation in cases where property was acquired for a specific use case, which it said did not exist in this instance.
It also argued that compensation should not extend to paying a foreign state as it would be “incongruous” with the Home Affairs Act.
The court said the absence of a proposed use or application for the land was “irrelevant” and compensation “is what the constitution requires.”
Australian attorney-general Michelle Rowland welcomed the High Court’s decision.
“Australia will always stand up for our values and we will stand up for our national security,” she said in a statement.
“The government will closely consider the next steps in light of the court’s decision.”
The Russian embassy did not immediately respond to a request for comment.