The saga in the case of the defunct Yukos oil company is far from over after the Russian Constitutional Court (RCC) in its decision of 19 January 2017 ruled that Russia was not bound to enforce the ECtHR decision on the award of pecuniary compensation to the company’s ex-shareholders, as it would violate the Constitution of the Russian Federation (CRF). The protracted argument between the Yukos oil company’s ex-shareholders and Russia has spanned over a decade before the ECtHR. In its judgment of 20 September 2011, the ECtHR found that Russia acted in breach of Art. 6 of the ECHR by failing to accord sufficient time to Yukos for preparation of its case before national courts. Further to this, the ECtHR found two breaches of Article 1 of Protocol I, in particular with respect to the assessment of penalties by the Russian tax authorities in 2010-2011 and their failure to “strike a fair balance” in the enforcement proceedings against Yukos. The issue of just satisfaction was settled in the 2014 ECtHR judgment that awarded 1,9 billion EUR in pecuniary damages to be paid by Russia to the Yukos ex-shareholders. It is an unprecedented amount of compensation that has ever been awarded in the context of human rights litigation, which makes Russia’s annual budget of 7,9 mil EUR allocated for enforcement of the ECtHR decisions look like a drop in the ocean. Following Russia’s unsuccessful appeal attempts in the ECtHR, the Russian Ministry of Justice brought the case before the RCC arguing against enforcement of the ECtHR judgment.
Uncertain Relationship Between International and Russian Law
The constitutional provisions on the relationship between international and Russian law are far from clear. As a general rule, the primacy of international treaties and agreements could be inferred from Art. 15(4) of the CRF:
If an international treaty or agreement of the Russian Federation provides for other rules than those envisaged by law, the rules of the international agreement shall apply.
The latest decisions of the RCC raise an important question on the relationship between international treaty law and Russian law, given its findings on the primacy of the Constitution if there exists a conflict between the rules of international and national law. Read the rest of this entry…