The Court of the Eurasian Economic Union

Legal basis: Appendix No. 2 of the Treaty on the Eurasian Economic Union 2014

Composition/structure. The basic structure of the Court was outlined in the Statute of the Court in the Treaty of Eurasian Economic Union. The main and most important component of the Court are judges. The Supreme Eurasian Economic Council appoints two judges from each member state to the Court, each with a serving term of nine years. All activities of the Court are led by Chairman, who is elected among and by Court judges. The Chairman and the Deputy Chairman should necessarily come from different member states. Their terms are three years in office. Judges are not in any case allowed to represent the interests of their states or any other entities. In order to judges avoid conflict of interests, they are prohibited from participating in profitable activities, i.e. full-time work.

The Chairman appoints and approves advisors and judicial assistants to the judges. To receive a position within the Court, a candidate should be nominated by the Member States and then elected by a special committee, the competition commission. Assisting bodies of the Court are the Administration and the Secretariat, which serve as organizational support. The hiring of staff requires an approval of the Supreme Eurasian Economic Council. The Secretariat is led by the Head of Secretariat, who also has two deputies, all of whom should again originate from different member states.

When the Court is conducted, the composition of the Court comes in three types: the Grand Panel, the Panel, and the Appeals Chamber. The Grand Panel consists of all judges of the Court and gather to decide the interpretations and cases proposed by Member states. The Panel should consist of, at least, one judge from each Member state and is called upon to decide cases brought by economic entities. The Appeals Chamber, which is regarded when the decision of the Court is being appealed, should consist of the judge, which did not partake in the decision that is being contested. There are also specialized groups, which consist of experts and that gather for specific purposes to assess facts of the cases that involve state subsidies and other regulations. These groups assemble once, after which they are dismissed. Experts for these specialized groups are presented by Member states. The result that these experts present, in most situations, is non-binding.

Key functions/jurisdiction. The Court of Eurasian Economic Union was created with a purpose of ensuring coherent implementation of the policies within EAEU and ensuring compliance of member states and bodies of the Union. The most important responsibility of the Court is to resolve disputes that occur on the territory of the EAEU that concern economic functioning. However, the Court can only conduct procedures at the request of a Member state or of an economic entity. Businesses, located within the Member states of the Union, can challenge policies or treaties that were enforced by the Commission if those policies or directives negatively impact the functioning of the businesses. Moreover, economic entities can also challenge the compliance of the Commission with the Union law. The decisions of the Court are binding, but the application can be revoked at any time during the procedure by the parties. The Court can also be asked for an interpretation of certain policies of EAEU treaties and can consult with national courts, the resulting advice of which is not binding.

When it comes to jurisdiction, the Court has a hierarchy of legal rules, that it abides. (Karlyuk 2017) The priority among legal rules is allocated to the Union laws, which is essentially the treaties of EAEU. Then EAEU treaties with third parties are considered after the Union law. No supremacy of the Union law over the national laws was introduced.

Decision-making rules. The Court can only make decisions if both parties consent to settle their dispute in the Court of EAEU. National Courts can request clarifications or consultation of the Court of EAEU regarding the Union laws and international treaties. The Court acts according to laws and regulations, all of which are outlined in the Treaties and according to the decisions EAEU bodies. The procedural side of the activities of the Court reminds the procedure of the usual courts, that is expertise groups are ensured independence and immunity, while the information of the cases stays private. However, if the decision of the dispute affects a Member State or the Commission, they may be allowed to intervene with the permission of the Court, if necessary.

The Court, at the end of the procedures, can admit or reject, suspend or resume and terminate the application. The Court has 90 days to make the decision since the obtainment of the application. The decisions of the Court are binding. Nevertheless, the decision of the Court cannot change or override the law of the Union, neither can it create new ones.

Inter-institutional dynamics and accountability. The judges can be replaced by the Commission in cases of misconduct and inappropriate behavior; however, it is not clarified in the Treaty of EAEU what is meant under “inappropriate behavior”. Official treaty of the Union states that any economic entity or body of the Union, that functions on the territory of the Member States can challenge the decisions and policies of the Commission through applying to the Court. Although, the Commission can ask the Court to deny such requests if there is not enough evidence on how is the applicants' rights are violated by the decision of the Commission. In the history of the court, in the vast majority of cases, the Court took the side of the Commission against any other entity or body. Regardless of that, the Court can suspend the judge on the request of the Commission, therefore, the Court can be considered accountable to the Commission.

Part Two

Research question. In 2012, the Court of Eurasian Economic Community was established, which three years later evolved into the Court of Eurasian Economic Union. The Court is one of the three permanent bodies of the Union. (Treaty of EAEU, Section 1, Article 19) The creation of the EAEU, in general, provoked a lot of attention from the mass media. Many were concerned that the EAEU is the revival of the reformed Soviet Union, and the Court as the EAEU’s new jurisdictional body will challenge national sovereignty and the laws of member states. De jure, the judges and the Court, in general, are impartial and are meant not to represent the interests of the Member States. Any successful integration project needs its legislative body in place. The Courts can be a driving force for the integration and deeper cooperation of countries with totally different legislative systems. It can push for the creation of the common law. In the current system of EAEU, can the Court issue decisions effectively without the consideration of the interests of the Member States or is it a politicized tool of the Union?

Literature review. Almost all the literature on the Court of EAEU state that there is a lack of competence within the Court, that is lack of experience appears to affect the functioning of the Court. Even the judges that are a part of the Court, themselves point out the importance of having professionalism as the main trait of the Court.

Mark Entin and Vadim Voynikov (2019) argue that the Court and legal framework of EAEU lack supranationalism that the European Court of Justice has. However, that has more positive impacts than bad ones. Entin and Voynikov assert that EAEU, in general, is too premature to accommodate such mechanisms. The Court of EAEU marked a clean line between the national and international law, while the EU incorporated the EU legal system into the national legislature. Therefore, the European Court of Justice was an instrument because of which the European Union could achieve the supremacy of EU law and the autonomy of the legislature. ECJ resembles the structure of the state more than the structure of international organizations and acts as a guard of the EU law. For now, even if the EAEU tries to acquire some degree of supranationalism, it does not have any incentives to expand the Union policies to the security and foreign policy issues. The article concludes by saying that EU and ECJ took a long time to become a state-like entity, therefore there is no need for the Court of EAEU to rush and push for a radical change, although the Court should strive for further extension of its influence.

Tatiana Neshataeva, the judge of the Court of EAEU, and Pavel Myslivskiy, Judge’s Advisor in EAEU, (2019) define the major obstacles that the Court is encountering at a current point in time. Their article, in contrast to the article of Entin et. al, argue that even if there is not any foundation for the supranational approach of the Court defined in the Treaty of EAEU, the Court exercises its supranationalism through judicial practice in reality. Its decisions are erga omnes and ab initio, which mean binding and the consequences of which apply to all. It is also pointed out in the article, that independence of the judges does not only mean independence from its Member States, but also independence from internal pressures. The Chairman and their Deputy should actively eradicate such internal pressures on judges, which might come in forms of personal and professional pressure. It was not mentioned if those instances happened in the Court of EAEU, but the concluding thoughts of the article highlighted the importance of autonomous judges because otherwise such incidents would result in making unjust decisions.

Diyachenko and Entin (2017), both of whom are also a part of the Court of EAEU, claim that the main measure of the effectiveness of the Court is how many cases have been decided in favor of economic business entities. They also state that the help of the Court is accessible to most businesses because the criteria by which the entity can challenge the Commission in the Court is how harmed the rights of those entities were from that policy. The authors, therefore, point out that because of such a broad definition, more businesses can apply to the Court, which indicates that more businesses are protected. Lastly, they argue that one of the reasons the Court is not so active in status-quo is that there are not a lot of applications coming. Diyachenko and Entin say that after a while when the reputation of the Court gets established as a reliable institution, the businesses will apply to the Court. The time is needed for economic entities to get used to the presence of the Court and start trusting it. Moreover, they point out the difference with the TFEU, which lets a party apply to the Court only within 90 days after the incident has happened, while the Court of the EAEU does not have such a limit. That is to say that the party can apply to the Court of EAEU throughout the unlimited time. In brief, the authors explained that the Court of EAEU is accessible to many business communities and acts in the best interests of people.

Analytical framework. In the legal system of the European Union, judges play an increasingly important role, because they are the ones who control the policy outcomes. (Hix and Høyland, 2011) The Court in the EU has an ability to either introduce or repel certain decisions, which in return gives the Court a capacity on acting on certain preferences. From the intergovernmentalist perspective, national courts and governments allowed the European Court of Justice to make decisions and promote the legal integration of the EU because it serves in the interests of the Member States in the long-term. The ECJ tries not to have a conflict with the governments, but it still enforces some policies that can be harmful to some industries in one way or another. Regardless of that, the nation-states gain more political and economic benefits, even at the expense of some local industries. The Member States have incentives to obey the decisions of ECJ as a result of such bargaining. Therefore, the ECJ has a capacity to lead to deeper integration, but with limitations. That being said, if the costs get too high for certain Member States, the ECJ does not want to provoke confrontation or threats from the Member states or other political actors.

The Court of EAEU does not have the capacity to adopt judicial activism, which led ECJ to successful integration. In fact, specifically because of the judicial activism, that happened at the beginning of the Court’s functioning during the Eurasian Economic Community, the autonomy of the Court was restricted substantially. (Karliuk, 2017) The Court decided against the Commission in the case of Yuzhnii Kuzbass, and as a result, the Court was deprived of having so much power. The Court decided to present the judgment, which was binding to all states. The case decided against the Commission in not implementing its obligations and forced the Russian Federation to pay a fine to Yukos shareholders. Next, the Constitutional Court of Russia decided to reference the European Convention on Human rights, under which they have weighed in with the statement that the Russian state does not necessarily have to comply with the International agreements if it endangers the right for sovereignty and non-interference. By that logic, Russia can revoke to comply with any international agreement, including the current Court of EAEU. That was the first and the last time when the procedure on such issues was used by the Court, after which the Court was banned from overriding the Commission’s decisions. This is an example of how the Court became a source of tensions within the Eurasian territory, from which the Member states and the Commission learned their lesson.

Analysis. The main goal Eurasian Economic Union was created is to promote economic growth, by liberating the border controls and tariffs. The goal was to encourage the business communities around Eurasia to expand and collaborate. Then, the purpose of the Court is to resolve the arising disputes that happen throughout such integration. The Court was meant to be a counterbalancing mechanism for businesses, that functions as a protector and promoter of the interests if these businesses. However, after a while, it became clear that the Court of EAEU does not act independently from the member states, but is, in fact, a highly politicized body that acts as a promoter of the states’ interests at the expense of the businesses. On that account, it is necessary to look at the way interactions of the Court and the Member states happen.

Interactions between the Court and the Member states are very careful and considering.

Under the current system of EAEU, the Member states have a lot of freedom for non-compliance with the Union law, and the Court does not take a lot of actions to prevent that. The infringement procedure, that presses accusations against the Member state with non-compliance of the certain Treaty or policy of the Union law, can only be brought by another Member State. (Karliuk, 2017) In times of Eurasian Economic Community, infringement procedure could have been initiated by the economic entities. Although limited, but the Court had some amount of leverage over the Member States to ensure compliance with the law. At this point, EAEU is not a Union that is only concentrated on economic development, but it is also a political union in some sense, where de jure the influence and weight of each state is considered equal, however, de facto the chances for one state to infringe against the other are non-existent. In the realms of current politics, smaller member states are unlikely to bring the case against the bigger states into the Court, because outside of EAEU, these states are highly dependent on others. If the infringement procedure gets brought into the Court, there might be some pushback later. Therefore, there is no body to hold the Member states, especially the large ones, accountable. That disincentivizes the governments to comply with the Union laws. Consequently, in turn, it creates a collective action problem, where neither the Court nor the Union has the capacity to make an effective decision, that will have on the impact of the Member states.

Another factor worth looking at is the possible decision of the Court against the Member State or the Commission. It does not happen often, but there were a few cases. The case of “Yuzhnii Kuzbass”, where the joint-stock company initiated a procedure of objection against the decision of the Commission regarding Customs Union, at first was successful in the Court. (The EurAsEC Court judgment of April 8, 2013) However, the Commission of EAEU interfered in the procedure with a statement that such contesting is not in line with international treaties. The case was applied to the Court in September of 2012 and was finally set in November of 2013, after long procedures of appeal in favor of the Commission. Because joint-stock company “Coal Company “South Kuzbass” functions on the territory of Russia, the case directly challenges the functioning of the Customs Union and implementation of it on the territory of the Russian Federation. It seems like initially, Russia was one of the initiators of the EAEU along with other countries, so it is logical to assume that there would not be any tensions or contradictions between the Union and the Russian government. However, when the Court tried to take an activist position in its judicial practices, the Russian state made it clear that it was not going to tolerate such practices. Many Member States in EAEU might see such judicial activism as a direct confrontation with the sovereignty of the nation.

The way the Court interacts with economic entities is most apparent during the procedures. There are too many undefined principles that the Court makes its decision upon. Apart from the treaty of the EAEU, there are many other treaties and, in addition to which there are EAEU treaties that are made with third parties. As an impact of such diverse sources, there is no single rule-making mechanism. (Tolstykh, 2019) Hence, when asked to decide, the Court can refer to any one of them or even act from the Court’s own ideas of justice (i.e. positive law, principles of International law, pacta sunt servanda, etc). The Court also refers to its past decision, which establishes the system of precedence, but there are still exceptions to that. Moreover, the Court has a capacity not to accept certain evidence or prioritize some types of evidence but not the others during the procedures and the Court does not explain their rationale regarding the value of the evidence. All this ambiguity on the Court's performance gives a lot of space on deciding the case and when the Court decided in favor of a certain party, it is easily justified due to a variety of different Treaties and gets hard for the applicants to appeal to the decisions. In nine years of existence of the Court, the number of cases that were decided against the Commission is only 3 out of 31 received objections. Huge amounts of uncertainty and gaps in the Union laws that are present during the decision-making is the Court’s interest. As a result, the ruling of the Court might be biased in deciding in favor of a certain party, rather than trying to make a fair decision and conclusion of the cases.

According to the documents, the Court has a lot of responsibilities, that can influence the membership in the Union and define the rules by which the Member States should apply. However, for a Court to be that effective, it has to expand the area of influence of its laws.

Because countries still have a great amount of their autonomy in place, many of the Member States are parts of the external treaties, which might be mutually exclusive with the EAEU Treaties that the Court complies with. (Tolstykh, 2019) Even if the solidarity exists between member states, there is not enough will for deeper integration. The Member states do not have an incentive to let the Court be autonomous, because in that way many of the domestic national laws would be undermined without gaining any payback from that integration. As a result, business communities distrust and feel dissatisfied with decisions the Court, deciding not even to apply to the Court in the first place. There is a lack of reliability on the Court as a source of disputes resolutions, which is an impact of its politicization by the Member states.

In conclusion, the functioning of the Court and its decision-making is an indicator that to preserve its institution, the Court highly depends on the approval of the Member states. It has to take into account the position and the interests of the governments, even if such a situation comes at the cost of the economic entities. Despite the formal presence of the elements of the Court’s supranationalism in the Union, the Court is heavily entitled to the intergovernmental features and can play the role of integrational mechanism only when the Member states decide to endorse that.

References

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and Perspectives, 5(2) russian Law Journal 53–74 (2017),

Maksim Karliuk, Russian Legal Order and the Legal Order of the Eurasian Economic Union:

An Uneasy Relationship, 5(2) russian Law Journal 33–52 (2017),

Mark Entin & Vadim Voynikov, Institutional and Legal Development of EAEU and EU in

Comparative Perspective, 7(3) russian Law Journal 155– 168 (2019),

Simon Hix and Bjørn Høyland (2011) ‘Judicial Politics,’ in Id. The Political System of the

European Union, 3rd edition, Basingstoke, Hampshire: Palgrave Macmillan,

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open joint stock company “Coal Company “South Kuzbass” for clarification and enforcement of the judgment of the Chamber of the Court of September 5, 2012 delivered in the case on the Coal Company’s application where it contested paragraph 1 of the decision of the Commission of the Customs Union of August 17, 2010 no. 335 “On issues of concern related to the functioning of the common customs territory, and implementation of the Customs Union’s mechanisms”, Retrieved from http://courteurasian.org/page-20791

TREATY ON THE EURASIAN ECONOMIC UNION 2014, ANNEX 2 to the Treaty on the

Eurasian Economic Union, STATUTE of the Court of the Eurasian Economic Union. Retrieved from http://www.eaeunion.org/?lang=en#info

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Court of the EAEU from 2012–2019, 7(3) russian Law Journal 194–219 (2019).