The Court of the Eurasian Economic Union: an unlikely facilitator of integration

One of the most prominent theories of international relations that is being utilized quite heavily in international law is the principal agent theory and how it relates to the relationship between governments and international courts. As pointed out by Alter (2008), many scholars have argued that states are “actually controlling what merely appear to be independent International Courts” (p. 34). Moreover, Ispolinov (2016) argued that understanding the fact that the courts need to be independent and impartial to effectively carry out functions assigned to them, governments try to establish various instruments and mechanisms of control while drafting the legal basis for their functioning (p. 154). The history of the Court of the EAEU and its statute may serve as interesting examples of the development of the relationship between governments and international courts. From experiencing a reduction in powers after its’ active judicial position as the Court of EurAsEC to being subject to impressive control mechanisms from member states over the implementation and legitimacy of its decisions under the Astana Treaty, the Court of the EAEU has gone through some changes just like the Union as a whole. Currently, however, due to such reasons as lack of judicial independence and many treaty provisions undermining the legitimacy of its decisions, the Court of the Eurasian Economic Union is very unlikely to engage in judicial activism by creating a common legal order in the EAEU territory and by pushing for further integration in the region.

When it comes to the Court of the Eurasian Economic Union, there seems to be somewhat of a broad consensus among scholars focused on this topic. Just a brief look at the legal basis for the Court’s operations laid out in the Astana Treaty and the Statute of the Court shows how limited its’ powers have become in comparison to its predecessor - the Court of the Eurasian Economic Community. As pointed out by Dragneva and Wolczuk (2017), the founding treaty of the EAEU has excluded “decisions of the court from the category ‘law of the Union’” and also has stipulated “in a rather convoluted fashion that the decisions ‘do not change and/or invalidate any norms of the law of the Union in force and the legislation of the member states, nor create new ones’” (p. 16) in the Article 102 of the Statute of the Court. In addition to that, Karliuk (2015) claims that “the drafters of the EAEU Treaty were careful to limit the scope for CJEU-like judicial activism” (p. 20) and this is supported by such stark differences between the two courts such as the absence of a preliminary rulings procedure and the inability of the Commission to file actions against the member states in the Court of the Eurasian Economic Union. So, it’s quite evident that in comparison with its predecessor and the CJEU, the Court of the Eurasian Economic Union has been given limited powers and resources to practice judicial activism to a great extent. Interestingly enough, Kembayev (2016) speculates that the creators of the Treaty on the Eurasian Economic Union must have had a decent knowledge of the history of the development of European integration and, namely, the role played by the CJEU, and with that knowledge they did everything they could to limit the possibilities of the Court to create an EU-like legal system in the territory of EAEU (p.44). In their exhaustive analysis of the Court of the EAEU, Diyachenko and Entin (2017) point out to three major challenges faced by the Court: “a limited competence, the lack of procedural mechanisms to ensure the dissemination of its case-law among national courts and a relatively small number of applications from economic entities” (p. 55). All of these three obstacles are mentioned continuously throughout the literature on this issue.

Overall, the broad consensus suggests that breaking through the legal limitations set by the member states is going to be a rather difficult task to achieve.

To start the analysis of the Court’s powers or lack thereof, it is necessary to consider its’ composition and the selection of the judges themselves. According to Annex 2 of the Treaty on the EAEU, the Court of the Eurasian Economic Union consists of two judges from each member state elected for a term of 9 years. The judges are elected by the Supreme Eurasian Economic Council on the proposal of the member states. Prior to this, the judges were elected by the Parliamentary Council according to the Article 5 of the Statute of the Court of EurAsEC. In addition to that, as argued by Ispolinov (2016) the selection process of the candidates on a national level is not regulated in any way and, just like in other international courts, this fact leads to a lack of transparency and politicization of the process (p. 157). The question of judicial independence also arises when looking into the issue of accountability of the judges. The judges of the Court of EAEU may be dismissed by the Member State he or she represents and by the Supreme Eurasian Economic Council on the grounds of Paragraph 12 of the Statute of the Court of the EAEU. This can again be contrasted with the CJEU, where judges can only be dismissed by the unanimous opinion of all the judges and Advocate Generals. Along with the issues of accountability, the Court of the EAEU doesn’t practice the notion of collegiality, which is argued to boost judicial independence (Shuibhne, 2017, p. 166). All in all, such limitations to the independence of the Court threaten its supranational nature.

In terms of its substantive jurisdiction, the Court of the EAEU can hear cases on disputes arising in connection with the implementation of the Treaty, international treaties within the Union and decisions of the other EAEU institutions. When it comes to procedural jurisdiction, only member states and economic entities can access the Court of the EAEU for direct actions. Here, a significant change from the previous Court’s statute is demonstrated - the Commission no longer has the ability to file actions against non-compliant member states. It is evident that giving the right tools of surveillance of member states’ compliance levels to supranational agencies is an important factor in facilitating successful integration. The unwillingness of EAEU member states to provide such tools to its institutions may serve as a sign of their doubts and reluctance about the Eurasian integration project as a whole. When it comes to economic entities, despite being allowed to access the Court, they face certain limitations: according to paragraph 108 of the Statute of the Court, economic entities can only appeal against the Commission decisions directly affecting their rights and legitimate interests and, most interestingly, according to paragraph 43 of the Statute of the Court, a dispute may only be sent to the Court’s examination after a pretrial negotiation between the applicants and the member state or the Commission.

The powers of the Court in the Eurasian integration process have not always been as limited as they are now. As briefly pointed out above, the EurAsEC court enjoyed the ability to practice two functions that are now unavailable for its successor, one of them being the ability to provide preliminary rulings to national courts. Unsurprisingly, this rollback is considered to be a great limitation to the Court’s powers by many scholars, some of them pointing out that “it’s exactly this function that most resembled the EU’s preliminary rulings procedure, which was designed to ensure the uniform application of the EU law across national courts and played a great role in the formation of the EU legal order” (Ispolinov as cited in Kembayev, 2016, p. 38). Despite only being used once, the pushback it received from the member states is quite understandable with a closer examination of the case. The Decision of July 10, 2013 of the Grand Panel of EurAsEC Court concerning a reference submitted by the Supreme Economic Court of the Republic of Belarus stated that the Court’s decision is binding, is not subject to appeal, and is directly effective on the territory of member states of the Customs Union. Besides, the decision requires national courts of member states to take account of the legal positions laid out by the Court of the EAEU in the decision itself. Looking at this brief example of the decision’s wording, it is no surprise that Ispolinov (2016) claims that the decision of member states to take away the function of providing preliminary rulings from the court acts as peculiar response to its first and last preliminary ruling (p. 159). In addition to that, Karliuk (2016) claims that this reduction in powers is a result of “the assertive attitude of the EURASEC Court coupled with the overreaction of the member states” (p. 9). That assertive attitude of the previous court can be demonstrated through one of its first judgements - Iuzhnii Kuzbass case. A joint-stock company named “Iuzhnii Kuzbass” filed an action against the Commission, claiming one of its decisions to be inconsistent with the Agreement on the Creation of a Single Customs Territory and the Formation of the Customs Union of October 6 of 2007. Even though the legal basis of the Court of the EurAsEC didn’t provide it with the explicit right to so, the Court “declared the Commission’s decision void, decided on the time when it became void, and made the judgment applicable not only to the parties of the dispute, but erga omnes” (Karliuk, 2016, p. 8). Along with the member states’ general desire to maintain the intergovernmental nature of the union, the level of judicial activism demonstrated by the previous court is one of the reasons why its successor was left with such a small room for action.

The Court of the EAEU faces many limitations in terms of the legitimacy and further implementation of its decisions. As briefly mentioned above, Article 102 of the Statute of the Court sets a significant restraint on the court’s power by stating that the decisions of the court cannot override or change the effective rules of the Union or the laws of the member states; they also cannot create new laws. This statute may serve as a way for member states to discard and ignore the inconvenient decisions of the court, which once again greatly limits its ability to create a functioning legal order in the Union (Ispolinov, 2016, p. 162). In addition to this, Article 111 of the Statute of the Court states that any decision of the Commission named inconsistent with the founding Treaty or the international agreements of the Union by the court is to continue in effect even after the entry into force of the relevant court decision until that decision is executed by the Commission. This provision highlights the member states desire to prevent any sort of judicial activism by the court through restricting the scope, legitimacy, and weight of its decisions. However, the process of confining the court using the treaty does not end here. According to articles 114 and 115, in case of failure to execute the decision of the Court, the respective member states or economic entities may apply to the Supreme Eurasian Economic Council for further resolution of the proceeding. So, the Court not only lacks the power to issue penalties, but its’ decisions are put into somewhat of a subordinate nature in relation to the political body of the Union - the Supreme Eurasian Economic Council. It is necessary to keep in mind that the Supreme Eurasian Economic Council consists of the heads of governments of member states and makes decisions by unanimity. So, the previously mentioned statute is another way member states can neglect the Court’s decisions through noncompliance and a further transfer of the case to “their own hands”. All in all, it is evident that the member states put a lot of effort into trying to avoid facing undesirable outcomes as a result of the Court’s activity either through decreasing judicial independence or limiting the legitimacy of the Court’s decisions.

It is necessary to point out that despite all of these restrictions, there seem to be certain signs of the Court pushing for more integration. Kalinichenko (2017) argues that “the Court formulated the ‘direct effect’ principle in order to coordinate between EAEU law and the domestic legal orders of the EAEU Member States” in its Advisory opinion from April 4, 2017 to the request made by the Ministry of Justice of Belarus. Indeed, a closer examination of the case provides some valuable insight into the Court’s stance on competition law and policy areas of supranational competence in the Union in general. In this opinion, the Court replied to a question concerning the de minimis rule for vertical agreements between companies within markets. According to Article 6 of chapter II of Annex 19 to the Treaty establishing the EAEU, vertical agreements between economic entities within the same market are allowed only if the individual market shares of participants to the agreement do not exceed 20% of the total market share. The Ministry of Justice of Belarus wanted a clarification of the compatibility of EAEU law with their national draft law provision which wanted to lower the previously mentioned standard of domestic shares to 15%. The Court stated that the Commission has supranational competence in the area of competition policy in transboundary markets and conclude that the reading of the aforementioned parts of the Treaty does not provide the member states with the right to change the established rules regarding vertical agreements. Also, as stated in the beginning, Kalinichenko (2017) argues that for the first time in its history the Court of the Eurasian Economic Union used the notion of the ‘direct effect’ doctrine and it “concluded that “common rules of competition have a direct effect and should be applied by the Member States directly as international treaty provisions” (indent 1 par. 2 section IV of the Advisory Opinion)” (p. 2). Despite such a promising move, in addition to the previously mentioned limitations to the Court’s ability to enforce and develop this principle, the author mentions some other constraints to the Court’s power in this issue such as the activist approach taken by the Constitutional Court of Russia to limit the impact of decisions made by international institutions on the Russian legal order and the ambiguity of the stance taken by the Court in this particular case (p. 3).

Looking at the current treaty provisions, it is hard to imagine the Court of the Eurasian Economic Union taking an active judicial position similar to that of the CJEU or even to the Court of EurAsEC. Many restrictions set by the member states demonstrate their devotion to maintaining as much control as possible over the EAEU institutions and their concern over surrendering part of their power to supranational agencies. However, if the Eurasian Economic Union is to live up to the expectations set out in the Astana Treaty, a functioning court that is able to create a common legal order in the region is necessary. If the member states are to uphold their commitment to regional integration, the current legal basis for the Court’s functioning will have to be revised.

References

Advisory Opinion of 4 April 2017, Advisory Opinion of the Court of the Eurasian Economic Council, Case No SE-2-1/1-17-BK, available at: https://docs.eaeunion.org/docs/en-us/01414091/ac_05062017.

Alter K., J. (2008). Agents or Trustees? International Courts in Their Political Context. European Journal of International Relations, 14(1), 33-63.

Dragneva, R., & Wolczuk, K. (2017). The Eurasian Economic Union: Deals, Rules and the Exercise of Power. Chatham House Briefing Paper, 1-27.

Diyachenko, E., & Entin, K. (2017). The Court of the Eurasian Economic Union: Challenges and Perspectives, Russian Law Journal, 5(2), 53–74.

Kalinichenko, P. (2017, May 16). A Principle of Direct Effect: The Eurasian Economic Union’s Court pushes for more Integration [Blog post]. Retrieved from: https://verfassungsblog.de/theprinciple-of-direct-effect-the-eurasian-economic-unions-court-pushes-for-more-integration/.

Karliuk, M. (2015). The Eurasian Economic Union: an EU-like legal order in the post-soviet space? Higher School of Economics Working Papers. No. WP BRP 53/LAW/2015.

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Ispolinov, A. S. (2016). Statut Suda EAJeS kak otrazhenie opasenij i somnenij gosudarstv-chlenov Evrazijskogo jekonomicheskogo sojuza [The Statute of the Court of the EAEU as a Reflection the EAEU Member States’ Concerns and Doubts]. Law. The Journal of the Higher School of Economics, (4), 152-166.

Judgement of 5 September 2012, Yuzhny Kuzbass OJSC v. Commission, Case No 1-7/1-2012, available at http://courteurasian.org/page-20811.

Judgement of 10 July 2013, Reference for a preliminary ruling submitted by the Supreme Economic Court of the Republic of Belarus, Case No. 1-6/1-2013, available at http://courteurasian.org/page-20991.

Shuibhne, N. N. (2017). The Court of Justice: European Integration and Judicial Institutions. In Hodson D., & Peterson. J. (Eds), Institutions of the European Union (4th ed., pp. 163-182). Oxford, UK: Oxford University Press.

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