Do not pay

The Constitutional Court of Russia on Thursday allowed the Russian authorities not to pay almost two billion dollars of compensation to former shareholders of the Yukos. The Ministry of Justice of Russia filed a request to the Constitutional Court on October 12, 2016. The agency considered that the obligations that the European Court of Human Rights assigned to Moscow are based on the provisions of the Convention on the Protection of Human Rights, the interpretation of which is dispersed with the Constitution of Russia.

"The Constitutional Court recognizes the execution of the ECHR of the ECHR in the case of OJSC Oil Company Yukos against Russia in accordance with the Constitution of the Russian Federation, the resolution says. At the same time, it says that "the Russian state on the basis of goodwill is entitled to make certain payments to the former shareholders of the company that suffered from the unlawful actions of its management, due to the newly identified property of Yukos."

The decision was a response to a request from the Ministry of Justice that it was possible, without violating the Russian Constitution, to fulfill the decision of the European Court of Human Rights, which in 2014 awarded to the former shareholders of Yukos about 1.8 billion euros as compensation for violation of property rights. Although in his resolution the ECHR did not see the political motives in the persecution of an oil company, but in trial he also did not see the adherence to European norms. The Ministry of Justice of Russia immediately expressed its disagreement with the decision of the ECHR and appealed to the Constitutional Court. According to the Ministry of Justice, it is impossible to implement the decision of the ECHR, since it is based on the provisions of the Convention on the Protection of Human Rights and Fundamental Freedoms and Protocols to it in the interpretation of the ECHR, leading to their discrepancy with the Russian Constitution.

However, the chairman of the Constitutional Court Valery Zorkin emphasizes that in his decision the court did not express consent with the Ministry of Justice.

There are two public law enforcement: the rule of law determined by the Convention, and the rule of law, determined by our constitution

- In this decision, we did not agree with the arguments of the Ministry of Justice and did not disassemble any procedural aspect to which the ministry pointed out as the basis for disagreement with Strasbourg. We indicate that a Russian citizen has the right to contact the ECHR if all funds are exhausted in Russia, the same is mentioned in the Convention. We do not believe that in the case of Yukos they were exhausted, but not to us indicate this to Strasbourg - we are not a supervisory authority. We were guided by the fact that there are two public law and order: the rule of law, determined by the Convention, and the rule of law, determined by our constitution. Russia ratified the Convention when there were no contradictions between them, but then, due to interpretations, the contradictions arose.

Valery Zorkin

The ECHR found that in Russia, fines and compensation were incorrectly collected from the Yukos, since there was the use of the retroactive force of the Tax Code on the three years of the statute of limitations for prosecution. But earlier we already considered this issue and explained that if taxpayers used the statute of limitations to avoid taxes, then the courts can collect taxes from them and after the statute of limitations. This interpretation was given by us back in 2005, during the Yukos process. The company believed that if three years have passed, then everything can be recovered more, but we did not agree with this. And even the ECHR noted that at the time of liquidation of the company, she had debts of 227 billion rubles, this is an unprecedented case. Of course, both the taxpayer has the right to count on both us and in other countries that although he was hiding in every way, he did not submit documents, but the deadline would end - and he formally said goodbye to his debts to the state. Therefore, we considered that retroactive collection of debts does not violate the constitutional rights of the taxpayer.

- Is it possible to assume that a point is set in this case?

There is a leadership with huge income, but there is an ordinary shareholder who did not take part in the management of the company

- Russia will not pay after such a decision, otherwise not just the decision of the Constitutional Court will be violated, but the constitution itself. I think no one will go to Russia for this. But still there are reserves for payments to shareholders. Of course, not legally, no shareholder has the right to demand this, because the joint -stock company is arranged so that all shareholders take responsibility for what the governing bodies do. Please collect the general meeting and re -elect them. Moreover, in this case, international auditors drew attention to the fact that tax payments do not correspond to the spirit of Russian legislation. But the shareholders believed that since they receive money from shares, so what to worry. Well, then what - "you like to ride, love and carry sledges."

Nevertheless, from the point of view of the highest justice, there is a leadership with huge incomes, but there is an ordinary shareholder who has not participated in the management of the company, and in this sense it can be conditionally called conscientious. He has no right to demand anything from the state, we have freedom of entrepreneurship, he acted at his own risk. But still, in a sense, it can be calculated to the victims, and if the property exists unaccounted for-maybe some accounts unlocked, some other wealth, then it must be seized and returned. Thus, a fair procedure for the return of this remaining property - between creditors and these shareholders, may be launched, ”Valery Zorkin believes.

In addition to the decision of the Constitutional Court, it is expected that two more special opinions of judges will be published.

Lawyer Olga Zeitlina considers the decision to be quite expected.

Russia is a member of the Council of Europe and the signal of the Convention, so it is obliged to execute the solutions of the ECHR

-In fact, when this question faced the Constitutional Court, no one expected that the court would seem anything else. In my opinion, this resolution lies more in the political plane than in the legal. And it does not mean at all that now it will be possible to do the same with any decision of the ECHR, that is, not to fulfill it. This is wrong. This is a separate case that raises separate issues, and, in particular, the main thing here is that Russia does not want to pay a fairly large compensation and uses all kinds of tricks for this, for example, the situation that the decisions of the Constitutional Court have priority in Russia. In fact, Russia is a member of the Council of Europe and the signal of the Convention, so it is obliged to execute the solutions of the ECHR.

But our Constitutional Court ruled that the shareholders of the Yukos can not be paid - just as he solved the issue of Crimea in a day - that his annexation does not violate anyone's rights and does not violate our constitution. So, here, this decision does not lie in the legal plane. Moreover, we see a selective approach to shareholders-we will pay someone, someone does not, and it is completely incomprehensible what the criteria are and what are the mechanisms of these payments. But it is already clear that these mechanisms will be very complex. I believe that the Constitutional Court has spoke out in a specific case when I did not want to comply with the decision of the ECHR in terms of payment, because it is a gigantic amount, and Russia cannot repay all these payments at the moment.

Lawyer Gleb Lavrentiev believes that in the Yukos case it was a question of violations by state bodies, and not the management of the company.

Here, pressure levers on Russia may be the suspension of its membership in the Council of Europe

- That is why the European court awarded the shareholders of the Yukos compensation by the state - he revealed human rights violations committed precisely from the state. This business is iconic, and the amounts there are rather big. Earlier, all the decisions of the ECHR were implemented, and this was a certain guarantee that Russia would not be excluded from the Council of Europe, the recognition of the jurisdiction of the European Court of Human Rights - this was one of the prerequisite of EU membership.

According to Gleb Lavrentiev, the Constitutional Court earlier made a general decision that Russia may not execute the decision of the ECHR in some cases, but this could not lead to exclusion from the EU. But the decision on the possibility of not paying the compensation awarded by the Yukos shareholders awarded to the Civil Code is the first precedent of a particular case, and here the levers of pressure on Russia may be the suspension of its membership in the Council of Europe.

The Constitutional Court of Russia examined the possibility of paying to the Yukos compensation to the Yukos compensation, awarded by the ECHR in mid -December. The position of the Ministry of Justice was then presented by Deputy Minister of Justice Georgy Matyushkin :

George Matyushkin

- From our point of view, the interpretation of the European Convention on the Protection of Human Rights and Fundamental Freedoms diverges with the Constitution of the Russian Federation in the interpretation of its constitutional court. Our request consists of three blocks. The first block disputes the position of the ECHR, which recognized the interpretation of Article 113 of the Tax Code, given in 2013 by the Constitutional Court of the Russian Federation, that the three -year period for bringing to tax liability cannot be unconditional if the taxpayer actively evaded tax audit. In relation to Yukos, this was established by both Russian courts and the ECHR itself. The second request block applies to the fact that the ECHR has interpreted a seven percent executive fee, collected from the company Yukos, regardless of its legal nature. But the Constitutional Court back in 2001 said that this collection is penal. The ECHR considered that this amount was disproportionate to the costs of the enforcement proceedings that the bailiffs incurred to recover from the Yukos of this amount, and considered that this amount should be returned from the Russian budget.

This approach is unpredictable, unfair, it violates the current practice of the ECHR

The third block of our argument is due to the fact that the APCH awarding the amount of the so -called fair compensation was unpredictable and selective in violation of the Convention itself, because compensation was awarded to shareholders who did not participate in the ECHR, did not declare their requirements. This approach is unpredictable, unfair, it violates the current practice of the ECHR itself.

Almost everyone who performed after George Matyushkin demonstrated solidarity with the position of the Ministry of Justice. Plenipotentiary representative of the Federation Council in the Constitutional Court Andrei Klishas is sure that if there is a controversial situation, then priority should be given not to the interpretations of the ECHR, but to the interpretations of the Russian Constitution:

Andrey Klishas

-There is no question of whether to pay or not to pay, how to pay-we are talking about what to do in a situation when, due to violation of legislation, recognized not only by the Constitutional Court of Russia, but also by the ECHR, some penalties were imposed on the company of Yukos. Here we are considering the interpretation of the Tax Code, previously data from the Constitutional Court, we consider the issues of the supremacy and the highest power of the Constitution of the Russian Federation, but we have the most important question: how can we do in a situation where the interpretation of Russian laws given by the Constitutional Court is contrary to the interpretations given by the ECHR? For us as legislators from the Federation Council, the answer is quite obvious: we should be guided by the provisions of the Constitution and its supremacy in the territory of the Russian Federation.

We must be guided by the provisions of the Constitution and its supremacy in the territory of the Russian Federation

The Plenipotentiary of the President of Russia in the Constitutional Court Mikhail Krotov, with numerous examples, proved that according to the practice of the European Court of Human Rights, compensation is exclusively awarded to applicants who were directly affected by the alleged violation of the Convention. According to Krotov, in the case of Yukos against the Russian Federation, the ECHR defended the shareholders who were not subject to protection in this process:

- Given the fact that the Permanent Arbitration Court in The Hague has already awarded the shareholders of the same company for much larger amounts of compensation, the decision of the ECHR on additional payment created the ground for unreasonable, and therefore unfair enrichment of shareholders. In all jurisdictions, shareholders receive the right to compensation only after full settlement with creditors, but this did not affect the decision of the ECHR. In this case, the debt to the creditors made significant amounts that many times exceeding the amount of the penalty, which, according to the ECHR, was carried out with the company in violation of the requirements of the Constitution of the Russian Federation. As follows from the developed ECHR approach, participants in economic societies cannot be considered victims of violation of the rights of their companies, with the exception of special situations, but the case of Yukos does not fall under these exceptions. All this demonstrates the electoral approach to determining the procedural status of a separate group of persons-shareholders of Yukos outside legal procedures and without resolving the issue of causing these persons of any harm as a result of the actions of the Russian authorities.

Mikhail Krotov considers it necessary when considering this case to take into account the positive practice of foreign courts regarding the complete or partial blocking of the decisions of the European Court. The conclusion of Krotov is unequivocal: the decisions of the ECHR are subject to implementation only upon recognition of the Constitution of the Russian Federation with the highest legal force.

Mikhail Barschevsky

The authorized representative of the Russian government , Mikhail Barshchevsky, went to the stands and said a brief slogan: "Nobody."

- From my point of view, the ECHR considered two groups of issues: the executive fee and all other issues related to the taxation of Yukos. As for the performing fee, this issue, in principle, could not be considered the ECHR, since attempts to consider it within the national judicial system were not only not exhausted - they were not even begun. As for other issues, one thing is clear: the Russian Constitution and European legislation do not coincide. And what? A nightmare? In my opinion, no. This is a question of interpretation. When the Russian Federation signed the Convention, we proceeded from those norms and interpretations that existed at that time. And nothing contradicting the Constitution of the Russian Federation was then discovered. However, the interpretations of the Convention later appear, in particular, the decision in question, which does not correspond to the interpretation of the Constitution given by the Constitutional Court. It seems to me that if in this case we fulfill the decision of the ECHR, then we in fact recognize the fact that the ECHR has the right to interpret our constitution perfectly from our constitutional court. That is, we admit that our constitution is not the basic law of the Russian Federation, and the Basic Law is the interpretation of the norms of the Convention. And we will finally abandon our sovereignty. Then we are not formally, but in essence we will find ourselves in a situation where there is one large state of Europe, and all the rest - just territories, regions, and the regional Constitutional Court must obey the Supreme - the ECHR.

We will finally abandon our sovereignty

This position was supported by the plenipotentiary of the Prosecutor General of the Russian Federation in the Constitutional Court Tatyana Vasilieva :

- The European Court has repeatedly noted that the duties of interpretation and application of national legislation lie on national authorities and primarily on the courts of the country. It is the Constitutional Court of the Russian Federation that is the last instance of resolving the issue of the possibility of the implementation of the Decree of the ECHR.

Only a member of the Presidium of the Human Rights Council under the President of Russia Ilya Shablinsky did not see the contradictions between the resolution of the ECHR and the Russian Constitution. In particular, according to Shablinsky, the shareholders of the Yukos are considered by the ECHR not as applicants and the victim, but as recipients of fair compensation awarded to Yukos as a victim in the conditions when the company itself was liquidated. Shablinsky recalled that the ECHR has repeatedly indicated: if the complaint was filed with the actions of the state, which already during the consideration of the case led to bankruptcy and liquidation of the company, then the termination of the consideration of the case on this basis would encourage the state to benefit from its offenses, preventing such companies to protect their rights:

-The Ministry of Justice considers the 7-percent amount of the penalty only by its permissible maximum, which can be reduced by the law enforcer, and the European Court proceeds from the compensation nature of the performing fee and recognizes its recovery from the Yukos in the maximum version of the extremely disproportionate amount of expenses during the enforcement proceedings. But from this obvious difference in approaches it is impossible to conclude that it is impossible to execute the decision of the ECHR. The key factor here is the criterion of proportionality. In the request of the Ministry of Justice there is a reference to the fact that the applicant of the Yukos did not dispute the size of the fee in national courts, but this will not cancel other grounds for recognizing all measures aimed at compulsory the fulfillment of tax obligations. This approach to the problem of proportionality does not contradict the legal position of the Constitutional Court. В этом деле оспаривались также сроки взыскания недоимок по налоговым платежам и штрафов, а также признания основного предприятия компании – "Юганскнефтегаза" – первоочередным объектом продажи, что не могло не повлиять на исполнение санкционных платежей. На наш взгляд, правоприменительные решения национальных судов были абсолютно непропорциональны преследуемой совершенно законной цели: обеспечению выплаты компанией ЮКОС налоговых платежей. Именно эти судебные решения и привели к непропорциональному вмешательству государства в охраняемое Конвенцией право на уважение собственности.

Смысл государственного суверенитета, на наш взгляд, как раз и состоит в обеспечении прав человека

Как нам представляется, нет никаких оснований для выводов о том, что толкование Конвенции и решение Европейского суда как-либо расходится с положениями российской Конституции либо с постановлениями Конституционного суда. Рассматривая это решение, мы полагаем, что – используя метафору председателя КС – мы должны выстраивать не глухую стену, но мосты между нашей судебной системой и Европейским судом. И исходить из того приоритета, который указан в нашей Конституции, а именно из приоритета прав человека. А смысл государственного суверенитета, о котором тут столько говорилось, на наш взгляд, как раз и состоит в обеспечении этих прав.

Представитель заявителя по делу "ЮКОС против России" в ЕСПЧ адвокат Пирс Гарднер в Конституционный суд не приехал, его письменное представление было зачитано в конце заседания.