In early October, Vladimir Putin introduced a bill into the State Duma that would abolish Russia’s Supreme Arbitration Court and transfer its functions to the Supreme Court. IMR Advisor Ekaterina Mishina, a prominent legal scholar, contends that the bill destroys one of the few remaining accomplishments of Russia's judicial reforms.

 

 

Listen, if stars are lit it means—there is someone who needs it.
—Vladimir Mayakovsky

The best birthday present must be the one you give to yourself, because nobody else could possibly penetrate your innermost feelings and find there the idea of such a confusing, pointless, and, generally speaking, dangerous present. I cannot think of a different explanation for Bill No. 352924-6 that the president sent the State Duma for consideration. Every deliberate action is supposed to have a meaning, and this action was undoubtedly deliberate, since in our country, bills are not introduced to the State Duma by unconscious people. Or at least I would like to think so.

The official title of the bill, which proposes amending the Constitution of the Russian Federation, is “About the Supreme Court of the Russian Federation and Prosecutor’s Office of the Russian Federation.” This title does not in any way reflect the key part of this bill, which in reality is about the abolishment of the country’s Supreme Arbitration Court (SAC).

The explanatory note to this bill offers an attempt at justifying this destructive action: “With a view to improving the judicial system of the Russian Federation and to strengthening its integrity, it is proposed to form a single supreme judicial body to deal with civil, criminal, and administrative cases and economic disputes as well as other cases under the jurisdiction of the courts, created in accordance with the federal constitutional law. The Supreme Court of the Russian Federation could become such a body.” Apparently, this plan is supposed to guarantee a “unity of approaches in administering law with regard to both citizens and legal entities, to eliminate the possibility of a refusal of judicial protection in the event of a dispute over jurisdiction of the case, to establish general rules concerning the organization of legal procedures and to achieve consistency of court practice.” Also, this legislative initiative is supposed to represent a new round of Russian judicial reform, which some representatives of the political elite have been waving like a flag for more than twenty years. This flag that they have been waving, however, has long had a musty smell, as Russian musician Boris Grebenshchikov once sang. Furthermore, it doesn’t have much to do with reform.

Dictionaries and life experience suggest that reforms usually signify positive changes. Why is it, then, that in our country reforms usually consist of actions aimed at destroying something good, useful, and effective? In my opinion, such reform looks more like sabotage. A reform cannot and should not have a destructive character. One cannot bring oneself to call the drastic restriction of jury court jurisdiction, the abolition of the two-chamber structure of the Constitutional Court, the nomination rather than election of the chairman of the Russian Constitutional Court, and the many recent amendments to the Russian Criminal Code reforms.
Analysts have called this bill’s proposal an amalgamation of Russia's Supreme Arbitration Court and Supreme Court. However, according to the Civil Code, an amalgamation is in essence a merger, or a combination of two organizations into a new entity. Under this bill, however, the Supreme Arbitration Court will be abolished, and its jurisdiction and functions will be assigned to the Supreme Court; consequently, this will not be a merger, but an absorption. This rather reminds me of a procedure that in business is called a hostile takeover.

The political nature of arbitration courts is considerably less pronounced than that of regular courts, and they recur to punitive actions less often. As far as professionalism is concerned, there is enormous difference between them.

The bill and the anticipated consequences of its adoption raise many questions, among which the most important one is: Why must one of the real achievements of the Russian judicial reforms now be destroyed? The creation of a system of arbitration courts (commercial courts) through the adoption of the law of the Russian Soviet Federative Socialist Republic on arbitration courts in 1991 and of the Arbitration Procedure Code in 1992 was a milestone event for Russia. The passage of these pieces of legislation were convincing evidence that the country had launched real judicial reforms and had decided to adjust the judicial system to the demands of the market economy, the foundation of which was being created in Russia at the time. The Soviet system of state and departmental arbitration was unsuited to the modern world. Soviet arbitration tribunals were administrative bodies charged with handling economic disputes between socialist enterprises and were directed first of all at strengthening the state planning system. Soviet courts did not have any experience with considering economic disputes between legal entities.

Those who have had to deal with Russian arbitrators and judges of regular courts in any capacity have undoubtedly noticed an enormous difference between the two systems. Of course, I am not claiming that each and every Russian arbitrator is a corruption-free and virtuous person. They are evidently no strangers to corruption. However, let us not forget where we live. Transparency International’s 2012 Corruption Perception Index ranked Russia 133rd, whereas Estonia was ranked 32nd, Georgia (a symbol of corruption in Soviet times) was ranked 51st, and Europe's poorest country, Moldova, was ranked 94th. Thus, one should not expect arbitrators to be paragons of incorruptibility. Furthermore, arbitration courts are sometimes used as instruments of political pressure—suffice to remember the closure in 2002 of the independent television channel TV6 that was formally ordered by the SAC.

Nevertheless, the political nature of arbitration courts is considerably less pronounced than that of regular courts, and they recur to punitive actions less often. As far as professionalism is concerned, there is enormous difference between them. Russia’s decision to transition to a market economy resulted in the appearance of many new spheres of legal control that were connected with the creation of the institution of private property. Judges of the newly established arbitration courts had to deal with disputes arising out of legal relations in these new spheres. These judges had the same Soviet legal education as their colleagues in the regular court system. Naturally, considering the specific character of the Soviet regime, at the time, legal education did not include such disciplines as banking law, company law, telecommunications law, or many other branches of law that suddenly became relevant after the country began shifting to a market economy. Consequently, arbitrators were faced with the necessity of filling in the gaps in their education that had suddenly become apparent. On the other hand, many judges from the regular court system, especially those who considered criminal cases, did not have to go to all these lengths—they had the Criminal Code and the Criminal Procedural Code. Sometimes they did not even need the codes—post-socialist legal consciousness and the grandfatherly or grandmotherly advice of the court chairman were sufficient.

As a result, a new generation of highly qualified arbitrators has come of age in Russia who successfully deal with the most difficult legal conflicts. These judges are not scared or offended by the phrase “issue preclusion.” Nor is it only lawyers who are aware of the fundamentally higher quality of the judgments delivered by arbitrators compared with their colleagues from the regular court system—research conducted in 2011–12 by the World Bank on the relations between courts and media came to this conclusion as well. These judges will be affected by the forthcoming takeover of the Supreme Arbitration Court by the Supreme Court of the Russian Federation, since the intention to “guarantee the unity of approaches in administering law” does not mean bringing the regular court judges to the arbitrators’ level, but the other way around—which is another proof of the fact that the country does not value highly professional and well-educated judges. Nor does it value the system of administrative justice, which guarantees the proper protection of the rights and legal interests of citizens and legal entities in disputes with the state. It is a well-known fact that the 2001 draft of the federal constitutional law on administrative courts remains untouched because the contracting parties could not reach a compromise on this issue. Apparently, we do not need to use the experience of other countries in differentiating courts and creating separate bodies of administrative justice due to a specific character of this type of legal proceedings. The protection of the rights and legal interests of citizens is not on the priority list of the architects of Russian policy—which explains their specific understanding of the goals of our current judicial quasi-reform. Today, they have made the decision to abolish the well-organized and efficient Supreme Arbitration Court and to force the arbitrators back to their home turf. I wonder what else these architects will think of? Will they decide that the Constitutional Court has stayed too long in St. Petersburg and transfer it to Chelyabinsk, for instance? Such a decision would be as harmful and costly and would have the same destructive impact on the Russian judicial branch. The main thing to remember is that all this is being done in order to “improve the judicial system of the Russian Federation.” Poor judicial reform!

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