The Russian Court System Overview
The judicial system of the Russian Federation is made up of several types of courts: the Constitutional Court, civil courts (or “courts of general jurisdiction”), “arbitrazh” courts, justices of the peace, and military tribunals. The principal law governing the fundamental principles of the Russian court system is the 1996 Federal Constitutional Law "On the Judicial System of the Russian Federation." Parties may also agree to submit their commercial disputes to arbitration tribunals.
Under Russian law, foreign individuals and legal entities enjoy the same rights to sue and be sued in Russian courts as Russian individuals and companies. Which court has jurisdiction over a particular dispute depends mainly upon the nature of the dispute and applicable Russian legislation. As a general rule, economic and commercial disputes among legal entities and/or individual entrepreneurs, foreign or Russian, are considered by arbitrazh courts, and non-commercial disputes among individuals and legal entities by civil courts.
Russian civil procedure has traditionally been acknowledged by Western specialists to be a “procedurally efficient system”. Delays are, as a rule, substantially less than in the Anglo-American system, and the Civil Procedure Code is not sympathetic to delaying tactics at discovery stage. There are two principal general criticisms made of civil litigation in Russia: judges are inexperienced in commercial cases; the costs of instituting litigation can be relatively high.
The inexperience of judges is obvious given the recent development of the market economy. Cases are often of first impression, the legislation is first- or second-generation in most commercial matters, and the relevant legal principles and rules are often at an early stage of development. Time will likely improve this situation.
The Constitutional Court of the Russian Federation
The Constitutional Court of the Russian Federation commenced its activities in December 1991 and is the first judicial body of constitutional review in the history of Russia. The Constitutional Court operates by virtue of the Russian Constitution and the 1994 Federal Constitutional Law “On the Constitutional Court of the Russian Federation.”
Generally, the legal status of the Constitutional Court is characterized by a number of peculiarities. It stands apart from the other courts and does not fulfill the same functions as a court of cassation, court of appeal, or court of review in relation to the civil courts. Rather, it reviews cases that concern the constitutionality of laws, interprets the Russian Constitution, and verifies the legality of presidential impeachment proceedings. The Court always limits its considerations to matters of law and refrains from examination of facts whenever such activity falls within the competence of another court or another authority. The rulings are final and may not be appealed. The provisions of laws declared to be unconstitutional are deemed to be de facto null and void, since the Constitutional Court’s rulings require no further confirmation by any other bodies.
In its work, the Constitutional Court relies on the Russian Constitution and international law. This allows for opportunity to implement the democratic procedures and standards recognized by the European and world community. Such an approach is particularly important in connection with the recent accession of Russia to the Council of Europe, which has given Russian citizens the opportunity to seek protection of their constitutional rights and freedoms in the European Court of Human Rights, as well.
Arbitrazh courts are specialized courts for settling property and commercial disputes between companies and individual entrepreneurs, both Russian and foreign. Arbitrazh courts are structured as a three-tier system. The activity of arbitrazh courts is currently regulated by the 1995 Federal Constitutional Law "On Arbitrazh Courts in the Russian Federation" and the 2002 Arbitrazh Procedure Code of the Russian Federation.
Arbitrazh courts are granted special jurisdiction over disputes arising out of the application of legislation governing corporations, and consequently, disputes between companies and among shareholders and participants in Russian companies on all matters excluding employment issues. Arbitrazh courts also have exclusive jurisdiction over the recognition and enforcement of foreign court decisions and arbitral awards for disputes arising out of commercial activity. These courts also consider claims of companies to invalidate acts of state authorities that infringe their rights and violate their lawful interests. These include tax, land and other disputes arising from administrative, financial and other legal relations.
The first (lower) tier consists of more than 80 arbitrazh courts, each covering a defined territory in the Russia's region (constituent entity). These courts hear cases in the first instance and also consider appeals of a first instance decision (appeals are directed to the same court but must be considered by different judges). The second tier of arbitrazh courts consists of ten federal circuit arbitrazh courts, each of which is responsible for a broad territory. These courts hear cassational appeals of the decisions of the lower courts.
The Higher Arbitrazh Court of the Russian Federation operates as the supreme tier in the arbitrazh court system. It is authorized to settle commercial and other disputes considered by lower arbitrazh courts and to carry out judicial supervision over their activities. It acts as the court of first instance in some specific cases, e.g., in cases involving invalidation of the non-normative acts of the president, government, and the Russia's Parliament that are contrary to the law and /or violate the rights of citizens. It also has exclusive jurisdiction over commercial disputes between the Russian Federation and its regions (constituent entities).
The jurisdiction of civil courts include, among others: (i) all criminal cases; (ii) appeals of administrative and other state actions that do not fall within the jurisdiction of other courts; (iii) labor and employment disputes; (iv) family, inheritance issues, consumer protection, and certain others. The jurisdiction of these courts over commercial disputes is very limited. Civil courts operate under the 1996 Federal Constitutional Law "On the Judicial System of the Russian Federation," the 2002 Civil Procedure Code of the Russian Federation, the 1998 Federal Law "On Justices of the Peace" and the 1999 Federal Constitutional Law "On Military Courts." The Supreme Court of the Russian Federation is the supreme judicial body for civil, criminal, administrative, and other cases under the jurisdiction of civil courts. For certain category of cases it acts as a court of first instance (generally those which are considered to be of “special importance” or “special public interest”). The Supreme Court also supervises the legality, validity, and substantiality of rulings of lower courts (including military courts) and provides clarifications of law on the issues of court proceedings.
Court judgments in Russia are not officially considered to be sources of law and are not binding precedents for future cases. However, the Higher Arbitrazh Court and the Supreme Court of the Russian Federation summarize lower court practice and issue court practice explanations in the forms of informational letters and overviews. Such letters and explanations are used as interpretative recommendations and guidelines for lower courts when dealing with similar issues.