ENSURING LEGAL ENTITIES AND NATURAL PERSONS
THE RIGHT OF RELIEF
Ensuring individuals and organizations the constitutional right of relief depends in many respects on the effectiveness of courts, on real access to justice of those whose rights are violated and (or) challenged.
The effectiveness of justice depends on many factors. One of them is delivery of correct, i.e. lawful and grounded, fair and reasonable judgments and other judicial acts. A judgment must not be only lawful and grounded, but also fair. Both parties to a dispute should perceive the judgment as reasonable and fair. The parties’ voluntary execution of the judgment proves the parties’ acknowledgment thereof.
Is it possible to recognize activities of arbitration courts as effective, proceeding from the absence of appeals against the awards rendered by courts of first and (or) second instances? I find this criterion at least doubtful. The High Arbitration Court annually cites statistics of the number of adjudicated cases, the number of appeals against the awards and rulings of judicial instances, and on the reversed, changed, and passed anew awards. The statistics show that the majority of awards of courts of first (second) instance are not appealed against and come into force upon expiry of the term of appeal or as soon as a ruling is made by the court of appeal. But it does not necessarily mean that all awards not appealed against are correct and protecting those who have the right of relief. There are many cases when awards are not appealed against, not in the least because they are correct. The reason of the parties waiving the right to appeal may be that the parties and other participants in the case cannot afford to bear further legal costs or have missed the statutory term of appeal and are denied renewal thereof; or the defendant who has lost the case is confident that the award will never be enforced because of the reasons solely dependent on him, as well as for other motives unrelated to the parties’ acknowledgment of the judgment.
High effectiveness of judgments is of great importance both for the contesting parties and for the state and society. Lawful and grounded, fair and reasonable judgments facilitate formation of an adequate law and order in the country, determine subsequent conduct in their business relations of the participants (as well as non-participants) in legal proceedings. In this connection it is very important to bring the delivered judgments to the notice of as many people as possible. It is good that Vestnik Vysshego Arbitrazhnogo Suda (Bulletin of the High Arbitration Court), as well as respective editions of federal circuit courts are published. Such practice should be extended. Collected judgments published in full and not only extracts therefrom should be printed. It is particularly desirable that the awards and judgments of the High Arbitration Court of RF and the Supreme Court of RF delivered as a result of protests consideration in exercise of supervisory power are published in full.
Evaluation of the effectiveness of judgments is also affected by difficulties in their enforcement. If a judgment is unenforceable, then it is meaningless. Consequently, the courts’ potential to take preliminary measures for securing judgment enforcement should be extended. The courts should be entitled to secure claims of a prospective claimant, i.e. before the latter actually files an action. Of course, the adverse consequences for claimants must be anticipated in the event the action is not filed in future, as well as compensation of losses to those against whom such securing measures have been undertaken etc. Such experience has been accumulated, for example, by the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Chamber of Commerce and Industry of RF.
The draft Code of the Arbitration Practice of RF (the CAP of RF) provides for the possibility to take such securing measures. It is good. But already today it is possible to apply them to some categories of cases. This concerns Article 388 of the Merchant Shipping Code of RF (the MSC of RF), pursuant to which in order to secure an interested person’s claim a vessel may be arrested following the ruling of a court, arbitration court or an admiralty arbitration court authorized to make arrests. A vessel may be arrested even in case the maritime claim, in compliance with the contract or any other cause, is subject to proceeding in a court or arbitration court of another country. Therefore, the MSC of RF provided for the rule known to legislation of many countries of a court’s right to arrest a vessel prior to filing an action with the court if either party has a maritime claim to the shipowner (an exhaustive list of these claims is set forth in Art. 389 of the MSC of RF). Common or arbitration courts are obliged to accept such claims for consideration.
But neither common, nor arbitration courts take over claims seeking arrest of vessels, referring to absence of the procedure of such claims consideration in the procedural law. However, matters regarding the jurisdiction over the cases are determined, as a rule, by the substantive law. Para 5, Art. 22 of the CAP states explicitly that a federal law may refer some other cases (apart from those listed in the CAP) to the jurisdiction of an arbitration court. The MSC is exactly such law and its rules must be enforced by courts. Absence from the codes of practice of the rules related to a court’s jurisdiction over these cases and to the trial procedure thereof must not be regarded as an obstacle for accepting and consideration of such claims.
The procedure of a property attachment as a security for claim is known to courts and widely used against claimants’ requests at any stage of a legal process. Therefore, there should be no difficulties in consideration of claims for vessels arrest prior to filing an action before the court, or with respect to the vessel which is the subject-matter of a claim filed (or to be filed) before another court. The MSC contains a general commission to the courts to take such actions (which are, by the way, provided for by the international convention ratified by Russia), and its fulfillment is compulsory.
Rejection of such claims is nothing else but a denial of a relief, and this gives no credit to our judicial system. Persons, very often foreigners, interested in vessels arrest, frequently do not appeal against a Russian court’s rejection of claims for a vessel arrest not because they acknowledge that our courts are right, but, as they say, because it is impossible or hardly possible to achieve something in Russia. The vessel, as claimants say, will not stay in the same port, it will enter another port (for example, Riga, Tallinn), and there it will be arrested with no problem.
One cannot but note that the absence of a special statutory procedure of verification of the lawfulness and validity of awards rendered by private arbitration courts in the course of consideration of applications for delivery of execution writs pursuant to the awards rendered by the above courts does not prevent the judges from such verification. As is known, pursuant to the Interim Provision on Private Arbitration Courts an arbitration court is entitled to forbear from delivery of an execution writ, if in the process of consideration of an application therefor it is established that the award of the private arbitration court does not comply with law or has been rendered relying on unexplored materials. In this event the arbitration court refers the case for a review to the private arbitration court, who has rendered it. When verifying the lawfulness and validity of an arbitration court award some of the judges consider applications for delivery of an execution writ with summoning of the parties and hearing their explanations in the court hearing. Such proceedings and the procedure of denial of an execution writ delivery on the ground of unlawfulness and invalidity of the private arbitration court award are not provided for by either the Interim Provision or the CAP. Special procedure for consideration by common courts of appeals against the awards rendered by an international commercial arbitration is not provided for, either. Nevertheless, for many years these courts have been considering such appeals and have been adopting respective judicial acts. At present, arbitration courts have begun accepting claims for acknowledgment and enforcement of foreign awards in the territory of the Russian Federation, having no clear idea of their consideration procedure.
This practice confirms that the absence of special procedural rules cannot impede the courts from accepting applications for security provided for by the federal law (the MSC of RF).
It would be desirable that the High Arbitration Court of RF (the HAC of RF) and the Supreme Court of RF (the SC of RF) give some explanations with respect to application of respective rules of the MSC of RF in order to put an end to the practice of rejection of applications for vessels arrest if a claimant has a maritime claim provided for by Art. 389 of the MSC of RF.
Unlawful or groundless rejections of these, as well as of the applications already known in the court practice, considerably restrict the right to the court protection of rights and interests of individuals and organizations guaranteed by the Constitution of RF. Both the legislation and the court practice need improvement in order to minimize such cases.
M.Sh. Patsatsiya has advanced his opinion on admissibility of an analogy in the procedural law. The issue of possibility to apply procedural rules by analogy is raised by the author in connection with the fact that far from all procedural situations arising in actual court practice may be regulated by the procedural law.
Currently, this issue with respect to the procedural form of activities of common courts is regulated by the Federal Law dated 07.08.2000 On Amending and Supplementing the Code of Civil Practice of RSFSR. Article 1 of the CCP of RSFSR is supplemented with a new rule whereby in absence of rules of the procedural law regulating relations arising in civil proceedings, a court may apply a rule regulating analogous relations (analogy of a legislative act), and in absence thereof the court acts following the principles of justice administration in the Russian Federation (analogy of a law) . Proceedings conducted by a common court with respect to appeals against awards of an international commercial arbitration rendered in Russia following the procedure specified for appeals to the court of cassation have been thus validated.
Another issue I would like to dwell on concerns suggestion to extend the scope of application of mandatory claim procedure prior to filing an action before an arbitration court. Such comprehensive procedure in Soviet times was quite justified by conditions of the planned economy. The mandatory claim procedure was aimed at strengthening of the statutory discipline in relations between socialist organizations, as it was then stated, and the failure to follow it impeded recourse to the state arbitration for protection.
Nowadays, a claim procedure to be followed prior to a recourse to courts, which is obligatory for all entrepreneurs (legal entities and natural persons) and whose non-observance would deprive them of the right of relief, is not only inexpedient, but even harmful, since it is contrary to the principle of the free will of parties to civil relations and restricts considerably the right of relief. Establishment of such procedure by the state is possible in strictly limited cases conditioned by the specific nature of protected relations. It is not always necessary even for relations in transportation. For example, the MSC extended the mandatory procedure of filing claims against a shipping agent only with respect to coasting shipping. It is quite reasonable, since no state applies such procedure to participants of foreign sea shipping. Such claim procedure must be also followed in the cases provided for by an international treaty or if it is established by the free will of the parties to civil relations. The fact that nowadays some (if not most of) entrepreneurs have a strong tendency to default on their obligations must not be disregarded. A claim filed prior to legal proceedings may become a good warning for «concealment» of the money or other property which might be forfeited by a court ruling. In this connection it should be noted that it is hardly reasonable to retain in the Code of Arbitration Practice of RF a claimant’s obligation to provide the other party with a copy of a statement of claim prior to filing it with a court.
Sometimes, accessibility of relief is connected with intensification of courts’ activities in the course of consideration of the claims filed.
As such, this provokes no objections. But some aspects of the problem are still doubtful. For example, considerations are expressed that the court should assist a party which cannot defend itself with the help of a qualified legal representative in a dispute with an adversary that can.
The court is a complex system. Not all seeking relief are able to orient themselves in court proceedings. Of course, a party having enough money may obtain qualified assistants - attorneys and other legal experts. But this does not necessarily mean that in this event the court should assist the other party in exercise of its procedural rights. In such situation the principle of procedural equality of the parties may be violated. It is the state’s and not the court’s responsibility to take care so that its citizens can retain for a minimal fee (or even free of charge) a legal expert for presenting their cases in courts. The budgets of the Russian Federation and its subjects should provide for the funds to be allocated to the members of the Bar and other organizations charged with protection of the rights of natural persons and legal entities in order to represent indigent parties in civil cases.
There is one more important issue connected with ensuring accessibility of justice. It concerns the current procedure of review of judicial acts in the court with supervisory powers.
The principles of optional and adversarial nature of civil proceedings, as well as the right of relief operate here, to put it mildly, in a rather weakened way, since the access of interested persons to supervisory instances is extremely restricted. Only respective officers of courts and the Department of Public Prosecution are entitled to initiate proceedings in the supervisory instance. Access to justice of interested persons depends exclusively on the will of authorized officers, and not on their own will.
The current procedure of initiating proceedings in the supervisory instance thus impedes exercise by the interested persons of their constitutional right of relief. A respective officer decides to file a protest relying most often on the statement of claim of one of the interested parties disregarding opinions of other participants in the case and without granting to both parties the right to present their cases before the decision to file a protest or to refuse the same is made. It is necessary to drastically change the procedure of initiation of supervisory proceedings. The right to initiate review proceedings must be vested in judges rather than in officers of courts or those of the Department of Public Prosecution. It is reasonable that public prosecutors should retain the right to file a protest against judicial acts only if these have been passed with respect to the actions filed by the public prosecutors, or if a person involved in the case addressed a public prosecutor with a request to file a protest.
The current procedure of review of judicial acts in exercise of supervisory power is sometimes deemed to stem from the Constitution of RF pursuant to which the High Arbitration Court of RF and the Supreme Court of RF are entitled to supervise the courts’ activities related to settlement of disputes and other cases in procedural forms provided for by a federal law. However, neither the Constitution, nor the Law On the Judicial System, passed on the basis thereof, conveys the content of this procedural form. Therefore, the laws, such as the Federal Constitutional Law On the Judicial System in the Russian Federation, the Federal Constitutional Law On Arbitration Courts in the Russian Federation, the Code of Civil Practice of RSFSR, and the Code of Arbitration Practice of RF, may specify the content of the procedural form concerned in compliance with the rules of the Constitution of RF about the right of relief of every person in Russia.
Persons participating in a case should be provided with the right to apply directly to a court for a review of respective judicial acts in exercise of supervisory power. It stands to reason that the supervisory instance is an extraordinary stage of an arbitration process. Every recourse to courts should not entail initiation of proceedings in the supervisory instance. The Code of Civil Practice and the Code of Arbitration Practice should expressly specify the grounds whereby supervisory proceedings may be initiated.
There is one more important issue I would like to dwell on. Currently, pursuant to the laws in force an alternative jurisdiction for disputes consideration with participation of aliens has been formed. Pursuant to the CAP of RF arbitration courts are entitled to adjudicate the cases if these are related to business disputes and the parties thereto qualify the criteria established by the law of arbitration procedure. Pursuant to Art. 25 of the CCP of RSFSR common courts are also entitled to consider such disputes. Article 25 does not contain any restrictions as to the nature of a dispute to be tried involving alien participants.
Consequently, an alien is entitled to choose a court for consideration of his dispute to be adjudicated in Russia. Subjects of the Russian law are deprived of such right. Here arises the question of justification of such inequality. What is it caused by? Why do aliens in this event have more rights than Russians? Advocates of the dual jurisdiction have not advanced so far any relative and valid causes in justification of such situation. Since in this country there are two branches of the judicial authorities administering (in a broad sense) justice in civil cases according to the competence established for each of them, there are no grounds to retain such kind of dualism in the future. In 2000 arbitration courts have tried over 1500 cases with participation of aliens. Respective experience has been accumulated. The High Arbitration Court has repeatedly summarized such rulings. Currently, the two draft laws of procedure have been submitted for consideration by the State Duma: the CCP of RF and the CAP of RF. They should provide for a respective differentiation of competence of common and arbitration courts in trial of cases with participation of aliens.
There are more issues connected with enhancement of effectiveness of judicial activities and ensuring individuals and organizations the right of relief. This small article dwells on those of them which the author deems more obvious.
  Malkhaz Sh.Patsatsiya. Primenenie protsessualnoi analogii (Application of Procedural Analogy). EZH-Jurist. 2001, No. 7, p.10.
  It is to be noted that this rule vests too comprehensive powers in a common court which, in absence of a respective procedural rule in the CCP, may in fact apply any law containing procedural rules (for example, the Law On Administrative Offenses, the Code of Arbitration Practice, etc.). Such extensive approach to a law being an act of the public law, is hardly admissible. But internal analogy, i.e. within the framework of the CCP RSFSR, is quite justified.
  In my opinion, the rule of a mandatory claim procedure to be carried out prior to a recourse to a court should not be extended on coasting shipping either. But, evidently, the drafters of the MSC did not want to collide so decisively with the CC RF.
  The latest review is given in Vestnik Vysshego Arbitrazhnogo Suda (Bulletin of the High Arbitration Court), 2001, # 3, p.68