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Russia versus the European Court of Human Rights: Russia rejects the Court’s Yukos verdict

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

The Russians have taken their first practical step to challenge the previously undisputed authority of the European Court of Human Rights (“ECHR”) on Russian legal decisions.

Russia’s Constitutional Court, Russia’s highest court, has for the first time exercised its new doctrine, which reaffirms that it is the sole court with jurisdiction to decide questions pertaining to Russia’s constitution, by rejecting a Judgment of the ECHR awarding $2 billion to the former shareholders of Khodorkovsky’s former oil company Yukos.

The ECHR in a series of Judgments which have received scant coverage in the West had previously ruled that Khodorkovsky had engaged in massive and systematic tax evasion, just as the Russian courts had convicted and jailed him for doing.  After coming under strong criticism for these Judgments from Khodorkovsky’s supporters in the West and in Russia, the ECHR nonetheless in a separate Judgment awarded $2 billion to the shareholders of Yukos, Khodorkovsky’s former company, which was the vehicle and beneficiary of his tax fraud.

I should say that the ECHR’s Judgment to award the Yukos shareholders $2 billion is an entirely different Judgment from the totally different decision of the Permanent Court of Arbitration in The Hague (“The Hague Tribunal”) to award the Yukos shareholders the incredible amount of $50 billion for the supposedly illegal seizure by the Russian authorities of the company.  That decision is wholly contrary to the various Judgments of the ECHR in Khodorkovsky’s case – which The Hague Tribunal treated with total disdain – and has been successfully appealed by the Russians, though the latest word is that the Yukos shareholders are now bringing another appeal in an attempt to get The Hague Tribunal’s decision reinstated.

The Russian Constitutional Court in rejecting the ECHR’s Judgment is saying that it is illogical to demand that Russia compensate the Yukos shareholders out of the Russian budget when the ECHR has itself said that the Russian budget was badly affected by Yukos’s and Khodorkovsky’s tax fraud.  In the words of Valery Zorkin, the Chairman of the Russian Constitutional Court

This contradicts the constitutional principles of equality and fairness

Interestingly, the Constitutional Court nonetheless urges the Russians to look for a compromise with Yukos’s shareholders, provided any compensation paid to them is not paid from Russia’s budget, but is paid out of funds formerly held by Yukos outside Russia.

Since the ECHR is a creature of interstate treaty, no legal mechanisms exist to enforce its Judgments, which ultimately depend on the willingness of the states that make up the Council of Europe to abide by them.  In theory a state which persistently disregards ECHR Judgments can be expelled from the Council of Europe.; however that is not going to happen in this case, and so far as this chain of proceedings relating to Yukos in the ECHR goes, this Judgment of the Russian Constitutional Court should be considered final.

However the suggestion that the Russian authorities to look for a compromise with the Yukos shareholders may be a sign that the Russians – who have become increasingly annoyed by the recent growing trend of Judgments in the ECHR going against them – are keen to come to some sort of modus vivendi with the ECHR rather than pull out of its jurisdiction completely.

Recently the Chair of the ECHR visited Russia where he met senior Russian judicial officials (including Zorkin) and it may be that behind the scenes an attempt to reach some sort of understanding is underway.

One point the Russians are known to have made is that they are very unhappy with the ECHR’s increasingly common practice of declaring cases involving Russia “priority cases”, a fact which enables the ECHR to rule on them before the internal appeal process within Russia has been completed.

One particular case where that happened was the case involving the Russian opposition activist Alexey Navalny – a controversial decision in many ways – where the Russians are known to have been furious that the ECHR “prioritised” the hearing of his case – enabling him to circumvent the Russian appeal process – despite the fact that he was never imprisoned because he was only given a suspended sentence.

If the ECHR’s practice of “prioritising” Russian cases is discontinued, then Russia’s two superior courts – the Supreme Court and the Constitutional Court – can have their say before the ECHR makes its decisions, something which might have important consequences for the way cases like Navalny’s are decided in future.

That the Russians nonetheless still want to work with the ECHR is shown by the way RT reports Zorkin saying

that the European system for protection of human rights was of fundamental value, and that it would be best if Russian authorities and the European court found a compromise.

(bold italics added)

There is a case for saying that the Russians actually have an interest in working successfully with the ECHR.

Not only is the ECHR’s jurisprudence at its best very good – helping the Russians to improve the operation of their own legal system if they can access it – but the fact that Russia accepts its jurisdiction is a powerful argument against those who claim Russia is a dictatorship.

Dictatorships do not make their legal systems accountable to an outside body, and on the (actually quite numerous) occasions when the ECHR has decided in Russia’s favour – as for example in Khodorkovsky’s case – that has provided the Russians with an exceptionally strong argument which they can use against their Western critics.

One recent case where in my opinion the Russian authorities would be well advised to heed the ECHR Judgment is in relation to the so-called Dima Yakovlev law, which prohibits inter-country adoptions from Russia to the US.

The Dima Yakovlev law was passed in anger in response to the wholly outrageous Magnitsky Act passed by the US Congress in 2012.  Though the circumstances in which the Dima Yakovlev law was passed makes it understandable, the ECHR – rightly in my opinion – says it is wrong because it discriminates against Americans on the basis of their nationality.

Not only does this seem to me right in principle but by accepting this Judgment Russia will put itself in a stronger position to argue to the ECHR that the various blanket bans on Russian athletes made purely on the basis of their nationality are – as I have repeatedly argued – equally discriminatory and wrong.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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