Analysis: To Pay or Not to Pay — Russia’s Next Step Away from the European Convention

The Russian Constitutional Court (‘RCC’) has delivered a second judgment denying enforcement of ECtHR decisions. Shortly after its judgment of 19 April 2016 (the Anchugov case) on the impossibility of lifting a blanket constitutional ban on prisoners voting, the Court adopted yet another decision claiming that Russia would not enforce the decision of the ECtHR, this time with respect to the case of OAO Neftyanaya Kompaniya Yukos v Russia. The Yukos judgment of 19 January 2017 shattered the illusion created by Anchugov that cases challenging the enforceability of ECtHR decisions would be exceptional and limited to occasions of evident contradiction between the Convention and the text of the Russian Constitution (‘CRF’). This blogpost uncovers the differences between the RCC reasoning in Anchugov and Yukos to prove the hypothesis that the newfound powers of the Russian Court are meant to shield the government from fulfilling unwanted international obligations.

What is peculiar about the Yukos case?

The Yukos Judgment is grounded in the December 2015 amendments to the Federal Constitutional Law on the RCC which empowered the Court to rule on the possibility of implementing decisions of international human rights bodies. According to Article 104.3 of the amended Law, judgments of international bodies which call for Russia’s deviation from its fundamental constitutional provisions establishing constitutional order and the system of rights protection can be declared impossible to implement. In the year following the adoption of these changes, the right to challenge the enforceability of the ECtHR judgments entrusted in the Ministry of Justice was successfully utilised twice and, in the case of Yukos, saved the budget EUR 1.9 billion. In both – Anchugov and Yukos – cases the RCC agreed with the government and stressed the superiority of the CRF over the Convention within the Russian legal system.

While in Anchugov the conflict between the ECtHR’s interpretation of Article 3 of Protocol No 1 to the Convention and the wording of Article 32(3) of the CRF on restrictions of voting rights was real, and enforcement of the judgment required implementation of general measures altering domestic legal standards, no such collision arose in relation to the enforcement of Yukos. In the latter case, the RCC questioned the obligation imposed on Russia by the ECtHR Judgment of 31 July 2014 to pay just satisfaction in the amount of EUR 1,866,104,634 for violation of Article 1 of Protocol No 1 to the Convention to ex-shareholders of formerly the largest oil company in Russia. The dispute centred around individual measures and did not challenge the violation of the Convention itself, so the proper enforcement of the ECtHR Judgment would have been exhausted through the payment of just satisfaction.

None of the provisions of the Russian Constitution prohibit payment of just satisfaction to victims of violations of international treaties. Quite the opposite, Article 46 of the CRF prescribes that ‘(1) everyone shall be guaranteed judicial protection of his rights and freedoms’, and ‘(3) everyone shall have the right to appeal, according to international treaties of the Russian Federation, to international bodies for the protection of human rights and freedoms, if all the existing internal state means of legal protection have been exhausted’. The RCC has always emphasized Russia’s commitment to ensure the right to seek justice on a supranational level, pointing out that ‘a final judgment of the ECtHR … confirming violation [of the Convention and its Protocols] in regards to the victim and awarding her just satisfaction (Articles 34 and 41 of the Convention) must be implemented by all means’ (Judgment of 6 December 2013 N 27-P).

In Yukos, the RCC departed from this standpoint and concluded that ‘payment of such a huge monetary sum imposed by the European Court of Human Rights to former shareholders of a company which has implemented illegal schemes of tax evasion, their heirs and legal successors from the budget system … in itself contradicts constitutional principles of equality and justice in tax relations’. In other words, the RCC argued that the Constitution guarantees Article 46 rights only to those who act in good faith and claim a modest compensation from the state.

Approaches to constitutional interpretation in Anchugov and Yukos

The outcomes of both Anchugov and Yukos depended to a large extent on the RCC’s choice of method of constitutional interpretation. In Anchugov, the Court utilized a textualist approach and argued that the literal meaning of Article 32(3) of the CRF did not leave a chance to interpret it in accordance with the ECtHR’s understanding of Article 3 of Protocol No 1 and thus to enforce the proscribed general measures. The choice of method, although uncommon for the RCC jurisprudence, had a reasonable basis and could be justified by the sovereigntist idea of protecting the will of the people (see the blogpost by William Partlett and Tatiana Khramova, ‘Interpretation and the Impossibility of Implementation in Russian Prisoner Voting’).

In Yukos the RCC adhered to a different method of interpretation. The Court reinforced its own Judgment of 14 July 2005 N 9-P in which it confirmed the constitutionality of Article 113 of the Russian Tax Code on three-year limitation period for tax offences as it had been applied to Yukos. The RCC argued that ‘failure to apply Article 113 of the Tax Code of the Russian Federation in its constitutional meaning revealed by the RCC … would mean, in essence, not only suspension of the effect of Article 57 of the CRF, but also violation of the principles of equality and justice under Articles 17(3), 19 (1), 19(2), 55(2) and 55(3)’. In other words, the supremacy of the national Constitution could not be achieved if the state was forced to act against the Tax Code provision in its interpretation rendered by the RCC.

This far-reaching approach to constitutional interpretation seems to be not only vague and amorphous in terms of establishing constitutional boundaries, but also logically flawed. It wrongly suggests that acting against legislative provisions which had been previously declared constitutional leads to violation of the Constitution itself. At the same time, it enabled the RCC not only to claim ‘non-executability’ of the ECtHR Judgment of 31 July 2014, but also to expand its powers to block the enforcement of further decisions of interstate bodies if they are incompatible with Russian legislation.

As Justice Yaroslavtsev argued in his dissenting opinion, the RCC should have abstained from reviewing the Yukos case and thus encouraged Russian authorities to continue the dialogue with Strasbourg in search for a compromise. He mentioned that Article 46 of the Convention presented options to break the ‘legal deadlock’ without the participation of the RCC. Instead, the RCC showed that when it came to fulfilling international obligations Russia put its pragmatic interests first and did not fear an open conflict with the ECtHR. The question remains: will Russia suffer the consequences or continue to test the patience of the Council of Europe?

Dr Tatiana Khramova is Senior Associate at the Institute of Law and Public Policy (Moscow, Russia)