6 November 2013

Russia Considers Merger of Supreme and Arbitration Courts

In October, the Russian government submitted to the State Duma a bill comprised of constitutional amendments that would combine Russia’s Supreme Court and Supreme Arbitration Court. President Putin had previously proposed the merger during the St. Petersburg International Economic Forum in June, saying it was necessary “to ensure unified approaches to the solution of disputes” involving individuals, government bodies and organizations. Lawmakers are expected to debate the bill this autumn.
Russia Considers Merger of Supreme and Arbitration Courts

The Russian judicial system is divided into three courts: the Constitutional Court, the Supreme Court and the Supreme Arbitration Court. The Constitutional Court is largely independent and separate from the other two courts. It only hears cases concerning disputes between state institutions and matters related to the Russian Constitution. The Supreme Court, Russia’s highest court, oversees lower courts of general jurisdiction. Finally, the Supreme Arbitration Court, or the commercial court, presides over economic issues such as bankruptcy, contractual agreements, loans, and ownership rights.
The proposed bill is designed to unify and streamline the Russian judicial system. By abolishing the Supreme Arbitration Court, Putin hopes to remove the potential for disputes and deviations within the courts and to establish consistent legal precedents within the Russian judicial system. In order to achieve that uniformity, the draft law calls for the dissolution of the Supreme Arbitration Court within six months of the law’s enactment.

The new unified Supreme Court, which would expand its responsibilities to include those of the Supreme Arbitration Court, would consist of 170 judges (the Supreme Arbitration Court currently has 53 judges, while the Supreme Court is comprised of 125). These judges would be selected by a board of 27 representatives, including one representative of the Russian President, one from the All-Russian Public Association of Lawyers, and one from the Public Chamber (an organization that facilitates coordination between individuals, NGOs, and state authorities to resolve societal issues). The Judicial Council of Subjects, a permanent body of the Russian judiciary responsible for judicial reform, would choose the remaining 24 members of this judicial selection panel.  The current head of the Supreme Court, Vyacheslav Lebedev, is considered a frontrunner to lead the new court.

Because three separate courts are prescribed for the Russian judiciary in the Constitution, a constitutional amendment would be required in order to abolish the Supreme Arbitration Court. Therefore, in order for the legislation to become law, the set of constitutional amendments must pass the State Duma with a two-thirds majority, the Federation Council with a three-fourths majority, and then receive the support of no less than two-thirds of Russia’s constituent regions. 
The response to this proposed initiative has generally been negative. Critics such as Lyudmila Novoselova, head of the Russian Intellectual Property Court, argue that combining the Supreme and Arbitration courts would “reduce the quality of the administration of justice.” Others in the legal community have questioned how a body with 170 judges will function efficiently.

News of the court merger has also raised concern in the business community. Georgy Sur, a lawyer with Egorov, Puginsky, Afanasiev & Partners, said, “if the main role [of the Supreme Arbitration Court] is given to the general courts, which have much less experience in considering commercial disputes, it will complicate the development of the business community”. Michael Harms, chairman of the Russian-German Chamber of Commerce, emphasized the favorable reputation of the Supreme Arbitration Court among international businesses due to its “very clear, independent and competent” work.

The draft bill also lacks support from arbitration judges. Within a week of the bill’s submission, at least seven Supreme Arbitration justices resigned. The unwillingness to relocate to St. Petersburg, where the new merged court will be housed, along with the reluctance to participate in the modified selection process for new judges, is said to have played a role in their resignations. The modified selection process proposed in the bill allows Supreme Court judges to maintain their current posts, but requires arbitration judges to take an exam before a Special Commission (comprised of academics, Supreme Court judges, and representatives of the Association of Russian Lawyers and the Russian Presidential Administration) in order to qualify for the new court positions.
Influential leaders such as First Deputy Speaker of the State Duma Alexander Zhukov believe that the bill could well be adopted before the end of the year. However, Pavel Krasheninnikov, Chairman of the Duma’s Committee on Civil, Arbitrational, Criminal, and Procedural Legislation, doubted the bill would be passed before the year’s end due to its complex procedural requirements. Regardless of the timeframe, it seems likely that this set of consolidation measures will eventually become law.