19 January 2017

Source: HRO.org

The Constitutional Court of the Russian Federation has ruled that the government is not required to pay the former shareholders in the Yukos company 1.9 bn euros in compensation, as stipulated by the European Court on Human Rights. The Constitutional Court sees the decision of the ECtHR relating to the Yukos case as at variance with the norms of the Russian constitution. ‘Russia has the right not to implement a decision, if this is the only way it can avoid infringing a statute in the Constitution’ said Valery Zorkin, chair of the Constitutional Court.

The BBC reported that the Ministry of Justice, which turned to the Constitutional Court in October 2016 for clarification, had earlier come to the conclusion that the Strasburg court’s ruling on the payment of 1.86 bn euros in compensation to the former shareholders of the onetime largest oil company in Russia was in contradiction with the Constitution.

The Russian authorities, according to the Constitutional Court, cannot pay the 1.86 bn euros because the ECtHR’s interpretation of the European Convention on Human Rights and Fundamental Freedoms is at odds with provisions in the Russian constitution. The decision is final and allows for no appeal. At the same time the ruling explains: ‘Russia has the right, out of goodwill, to pay compensation to former shareholders of the company who have suffered from unlawful actions’. However, any such payments should not come from the Russian budget, but from ‘as yet undisclosed Yukos property’ abroad.

In 2014 the ECtHR ruled that, in its hearing of the first ‘Yukos case’ the Russian court ignored the right to a legal defence and to just court proceedings, and also imposed unreasonable fines for tax infringements. In the Russian Justice Ministry’s view, the ECtHR incorrectly interpreted the Convention on Human Rights, when assessing the losses borne by the former shareholders of the oil company. Georgy Matiushkin, representing the Ministry at the hearing at the Constitutional Court in December, said that ‘the clauses of the Convention do not clearly prohibit a government using legal means for the appropriate collection of taxes’.

In December 2015 President Putin signed a law which allows the Russian Constitutional Court to recognize the decision of an international court as unenforceable, and in the first instance those of the ECtHR, when a decision is in conflict with the Constitution. The case involving the payment of 1.86 bn euros to the Yukos ex-shareholders is the second such case which has involved the implementation of a ruling by the ECtHR. In April, the Constitutional Court ruled against the Strasburg court’s decision that certain prisoners should have the right to vote in elections. However, as Mr Zorkin stated to journalists after the recent court hearing, this is the first case where the Russian Constitutional Court has wholly disagreed with a ruling of the Strasburg court ‘I want to emphasize that this is the first decision in the history of the Constitutional Court where it, the Court, has not agreed with a decision by the ECtHR. Today, in some sense, is a double baptism’.

Translated by Mary McAuley