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Special Judicial Control Exercised by Arbitration Courts Over Compliance of the Rules of Normative Acts With Federal Laws
This report is the result of the problem of the judicial control exercised by arbitration courts discussed within the framework of the meeting of the Moscow regional work group of TACIS project "Legal Protection of Business Entities" held in Moscow on 17-19 January 2001.
Special Judicial Control Exercised by Arbitration Courts
The use of judicial vehicles in solving the problem of ensuring compliance of the normative acts with federal laws is very important both for the subsequent course of the judicial reform and the social and economic development of the country, improvement of the judicial control forms, especially in the sphere of economic activities.
The existing structure of the judicial system, where the arbitration courts function as specialized courts for entertainment of economic disputes and other cases in the sphere of economic relations, as well as the practical experience accumulated by the arbitration courts in enforcement of normative acts of economic nature governs, as it seems, the regularity in vesting the arbitration courts with the authorities to check compliance of the above acts with federal laws and with other normative acts having a greater legal force.
The grounds for vesting the arbitration courts with the authorities in the sphere of special judicial control (as opposed to incidental judicial control, i.e. exercised in connection with consideration of a particular case[1]) follow from the provisions of the Federal Constitutional Law On Arbitration Courts in the Russian Federation dated 28 April 1995, No. 1-FKZ. In particular, Article 5 of the above law specifies that the principal tasks of the arbitration courts in the Russian Federation in entertainment of disputes falling under their jurisdiction are not only protection of the infringed or challenged rights and lawful interests of organizations and individuals in the sphere of entrepreneural and other economic activities, but also facilitating of strengthening of lawfulness and prevention of infractions in the above spheres. In this sense, special judicial control may undoubtedly be regarded as an effective vehicle for guaranteeing lawfulness and law and order in the sphere of economic relations.
The above conclusion also follows from the legal position of the Constitutional Court of the Russian Federation which in its Ruling dated 16 June 1998, No. 19-P explained that Articles 125, 126, and 127 of the Russian Constitution do not exclude the possibility to verify, by arbitration courts included, irrespective of entertainment of a particular case, the compliance of normative acts below the level of a federal law listed in Article 125 (subsections a and b, part 2) of the Constitution of RF with another act having greater legal force, except with the Russian Constitution[2].
At the same time it should be noted that the legislator has already pursued the way of vesting the above authorities in the arbitration courts. This, in particular, has found its reflection in the Law of RF dated 22 March 1991 On Competition and Restriction of Monopolistic Activities on the Commodity Markets, Federal Law On State Regulation of Tariffs on Electric and Heat Power in the Russian Federation: "The disputes related to state regulation of tariffs on electric and heat power, including the differences unsettled by the Federal Energy Commission are subject to arbitration".
In accordance with Article 12 and para 1, Article 29 of the Law On Competition and Restriction of Monopolistic Activities on the Commodity Markets the Federal antimonopoly authorities are entitled to issue injunctions mandatory for execution by federal executive authorities, executive authorities of the subjects of the Russian Federation, and municipal authorities on cancellation or amendment of wrongful acts adopted by these authorities, which run contrary to the current law, and in case of the failure to execute the injunctions concerned the antimonopoly authorities may apply to the arbitration court seeking recognition of the respective act as invalid. Nevertheless, it should be noted that the above provision is construed by the arbitration courts somewhat differently. In particular, the newsletter of the Presidium of the High Arbitration Court dated 2 July 1997, No. 16 On Non-Jurisdiction of Arbitration Courts Over the Actions of Antimonopoly Authorities Seeking Recognition of Normative Acts as Invalid contains the following directions: "When the antimonopoly authorities file the above actions with the arbitration courts, it should be taken into account that pursuant to Article 4 of the Federal Constitutional Law On Arbitration Courts in the Russian Federation the arbitration courts administer justice by resolving economic disputes and other cases referred to their jurisdiction by the Constitution of the Russian Federation, the above Federal Constitutional Law, the Code of Arbitration Practice of the Russian Federation and other federal laws adopted in compliance therewith. Article 22 of the Code of Arbitration Practice (CAP) sets forth jurisdiction of the arbitration courts over the disputes seeking recognition of non-normative acts running contrary to other normative legislative acts and infringing the rights and lawful interests of individuals and organizations. Article 29 of the Federal Law On Competition and Restriction of Monopolistic Activities on the Commodity Markets does not directly refer the disputes over actions of the antimonopoly authorities seeking recognition of normative acts as invalid to the jurisdiction of the arbitration courts. Neither the substantive, nor the procedural law sets forth the jurisdiction of the arbitration courts over the above disputes. The right of antimonopoly authorities to judicial protection of public interests can be exercised by filing the above actions with the common courts".
Finally, para 2, Article 138 of the Tax Code contains a direct reference to the authority of the arbitration courts to exercise special judicial control: "Court appeal by organizations and individual entrepreneurs against the acts (normative included) of tax authorities, actions or omission to act of their officials is done by filing a statement of claim with the arbitration court in compliance with the law of arbitration procedure".
The practice of implementation of the above authority has shown and confirmed the effectiveness of special judicial control exercised precisely in the framework of the system of arbitration courts.
The decisive factor of the effectiveness of the special judicial control mechanism in the authorities of the arbitration courts, as it seems, is the principle of a peculiar procedural economy attained at the expense of targeted "attack" of interested subjects whose rights are infringed as a result of effect of a wrongful normative act directly on the given normative act. The wrongfulness of a normative act (in other words, its failure to comply with another act having greater legal force) can be also revealed in the course of assessing the rightfulness of the said act enforcement. In this case the so-called incidental judicial control takes place, which consists of verification of the lawfulness and rightfulness of the normative act serving as the basis for adoption of the individual act assessed within the framework of a particular case.
Taking into account a colossal work load on the courts and judges actually of all judicial bodies in the Russian Federation, the assessment of rightfulness of the normative act which serves as a basis for taking subsequent illegal decisions would make it possible to avoid (or substantially reduce) the necessity to repeatedly consider in the proceedings the rightfulness of all other acts adopted on the basis of the "primary" act. Thus, vesting of authorities in the arbitration courts in the sphere of the judicial control would significantly facilitate the effectiveness of justice in resolution of economic disputes[3]. The initiative of business entities would make it possible to quickly and efficiently identify and eliminate in the framework of a dynamic arbitration process those "defective" layers of normative material that infringe their lawful and substantiated rights and interests.
Attention should also be paid to another important factor determining the role of special judicial control as a vehicle of court protection. The practices of the European Union countries demonstrate a special mission of special (or abstract) judicial control. Being related to the interests of a particular person (applicant), the special judicial control is perceived in the doctrine as a special vehicle connected with the discharge of the court's function of qualified assessment of normative acts as elements of a legal system whose effect goes beyond the framework of the particular applicant's interests. This predetermines not only the procedural peculiarities in consideration of respective cases (in particular, the elements of an inquisitive process), but also reasonable restrictions of the court's authorities, first of all as applied to the jurisdiction of the court in this particular category of cases.
Nevertheless, in order to make a conclusion whether it would be reasonable to widen the sphere of the special judicial control in the Russian Federation, a number of specifically Russian factors should be taken into account, among which, in particular, the following should be noted:
- the transitional and revolutionary nature of the Russian legal system development in connection with formation of the market economy which, in its turn, predetermines the intensity of lawmaking of the state;
- the federative structure at the stage of formation and, as a consequence, natural origination of legal conflicts between the federal and regional laws;
- active by-lawmaking, predetermined by an inadequate and essentially running contrary to the principles of the rule-of-law state understanding of "implied authorities" to issue normative acts pertaining to the competence of executive authorities without a respective balance of goals, means, and limits of by-law regulation;
- as was noted above, the excessive work load on the courts, primarily - arbitration courts, of the cases arising from administrative relations;
- historically formed in the latest Russian history of law a dualistic (in the opinion of a number of experts - duplicating[4]) system of arbitration and common courts with fairly specific criteria of jurisdiction determination.
Taking into account, inter alia, the above considerations and being guided by para 1, Article 104 of the Constitution of RF and sub-para 2, para 1, Article 13 of the Federal Constitutional Law On Arbitration Courts in the Russian Federation, the Plenary Session of the High Arbitration Court of the Russian Federation of 2 April 2000 ruled to approve the draft Federal Constitutional Law On Authorities of Arbitration Courts to Verify the Compliance of Normative Legislative Acts with Federal Constitutional Laws, Federal Laws, Other Normative Acts Having Greater Legal Force and to submit the above draft to the State Duma of the Federal Assembly of the Russian Federation as a legislative initiative of the High Arbitration Court of the Russian Federation. In accordance with the resolution of the Council of the State Duma of RF, the draft concerned has been delivered to the President of RF, committees of the State Duma, the Council of Federation of the Federal Assembly of RF, the Russian Government, the Constitutional Court of RF, the Supreme Court of RF for comments and suggestions, as well as to the Legal Department of the State Duma Administration for legal opinion.
A more reasoned analysis of the expediency and usefulness of vesting the arbitration courts with the authorities to exercise special judicial control may be carried out in comparison between the law draft model and the current procedure of judicial control within the framework of common court system.
Arbitration and Common Courts as Judicial Control Agents
The current law is oriented on the whole to the principle of referring the general and concurrently residual authorities in the sphere of judicial control to the competence of common courts.
Based on the rules of Articles 1 and 3 of the Law of RF dated 27 April 1993 On Appeal Against Actions and Resolutions Infringing Rights and Freedoms of Citizens, paragraph 2, part 2, Article 115 and paragraph 2, part 1, Article 116 of the Code of Civil Procedure, common courts (the Supreme Court of RF and the courts of the subjects of RF) exercise today the judicial control in all categories of cases, except for the cases when a special jurisdiction of other judicial authorities is set forth over exercise of such special form of judicial protection[5].
The common courts' rulings testify that challenged in the common courts are normative acts (both in full and in part - paragraphs, articles, sections) adopted by various governmental authorities and officials at the federal level and at the level of the subjects of the Federation, local authorities and their officials. The acts differ not only in the subjects who issued them, but in the object of legal regulation, limits of their effect and other features.
The scope of normative acts verification of whose legality is the competence of common courts is so wide that it is impossible to determine these in a closed list. Besides, this would be hardly reasonable by virtue of a general provision pertaining to judicial protection of the rights and freedoms protected by law and set forth in Articles 18 and 46 (paragraphs 1 and 2) of the Constitution of RF.
Besides, a number of laws contain special rules on judicial recognition as invalid of the normative acts as running contrary to a respective law or other legislative acts. In particular, by virtue of provisions of the Federal Law dated 17 November 1995 On the Department of Public Prosecution the public prosecutor is entitled to request from the court recognition as inoperative of normative acts issued by federal ministries and departments, representative (legislative) and executive authorities of the subjects of the Russian Federation, local authorities, military authorities, control authorities and their officials. As regards the authorities of the Department of Public Prosecution to initiate the judicial control, the Constitutional Court of RF, nevertheless, has repeatedly formulated certain legal positions aimed at restriction of the above authorities. In particular, the Ruling on the case of verification of the compliance with the Constitution of certain provisions of para 2, Article 1, para 1, article 21, and para 3, Article 22 of the Federal Law On the Department of Public Prosecution[6] the Constitutional Court noted that the common courts may verify the laws of the subjects of RF and recognize these as inoperative against the application of the public prosecutor, but they cannot recognize them as invalid. A legislative act can be rendered forceless only either by the legislative authority which has enacted the act concerned, or by the Constitutional Court, whereas a common court may only recognize such act as running contrary to the federal laws and subject to no application. In other words, recognition by the court of a law of the subject of RF as invalid is not the final stage of reconciliation of the legislation of the subject with federal legislation. Subsequently, being guided by the court ruling, the legislature of the subject of RF must finalize the matter and amend the law. Anything else would be adverse to the constitutional principles of people's power through legislative (representative) authorities. The Constitutional Court has not found that the provisions of the Law On the Department of Public Prosecution run contrary to the Constitution of RF under review as regards vesting the court with the right to recognize the laws of the subjects of RF as inoperative against the public prosecutor's application. At the same time, the provisions concerned were recognized as running contrary to the Constitution as regards the courts' right to recognize the laws of the subjects of RF as invalid and loosing their legal force.
As was already noted, the sphere of jurisdiction of the common courts to verify the lawfulness of the normative acts has certain restrictions.
To delimit the competence (jurisdiction) between the judicial systems, provisions of the law (federal constitutional, federal law) stipulating captions from the common jurisdiction sphere should be taken into account. Such captions are related primarily to the sphere of jurisdiction of the Constitutional Court of RF. This issue will be detailed below.
Other captions are related to those normative acts with respect to which the law, as an exception, stipulates the possibility of challenging these in the arbitration court. It is the implementation of such possibility that the above draft of the High Arbitration Court of RF is aimed at.
In assessment of the current situation one should note that the existing system of judicial control actually deprives a businessman (or an association of businessmen) of any stimuli of initiation of the proceedings to recognize as invalid (or inoperative) a certain normative provision in the system of common courts to the extent the protection of interests of a particular businessman has already been accomplished as applicable to a concrete arbitration case.
In other words, having exercised incidental judicial control within the framework of a particular case, the arbitration court may only "advise" to apply to a competent common court for a "prophylactic" means - recognition of a normative act as invalid -whereas a respective estimate of the normative act concerned has already been "incidentally" made by the arbitration court.
Attention should be also paid to other evident advantages of widening the scope of authorities of arbitration courts in the sphere of judicial control at the expense of a respective limitation of common courts' authorities.
Arbitration Process.
Historically formed duplicating (in relation to the civil proceedings) branch of Russian law - the law of arbitration procedure - developed proceeding from orientation to the necessity to develop procedural mechanisms accommodated to the solution of tasks of ensuring the protection of economic subjects. More rigid procedural forms, though following from the presumed procedural liability of economic subjects, ensure a significant (as compared to the civil process) dynamism of the arbitration process. Orientation of arbitration courts to resolution of a case in the first instance within actually 2 months makes it possible to conclude that the arbitration courts as agents of judicial control have a procedural advantage.
Specialization of Courts And Qualification of Judges.
The experience accumulated in resolution of economic disputes between business entities and disputes in the sphere of management makes it possible to conclude on a better qualification of arbitration courts and arbitrators for solution of the most complicated tasks of judicial control. Besides, it seems that the abstract assessment of a rule of law may be efficient only in case its true application is evaluated objectively. The latter condition predetermines a certain skepticism as regards the ability of the common court judges to assess notionally the "life" of a rule of law, which is fairly distanced from the subject of their professional competence.
Institutional Structure of the Judicial System.
The availability of the intermediate link in the system of federal district arbitration courts whose jurisdiction goes beyond the boundaries of a separate subject of RF makes it possible to rely on a greater independence of the court in resolving the issues of normative acts of respective subjects of the Russian Federation. A similar link is currently absent from the common court system[7].
Having noted the above advantages, the attention, nevertheless, should be paid to inevitable problems which may arise in connection with uncertainty in determining the jurisdiction over this category of cases which, in its turn, may result in an actual limitation of the access to justice.
In particular, implementation of the concept of the High Arbitration Court draft may result in fairly unseemly conflict situations related to the duplicating (coinciding or different) assessment of one and the same act by the two judicial systems. Implementation of mechanisms restricting, on the one hand, the claimant's search for the most favorable judicial conditions and, on the other hand, guaranteeing inadmissibility of transfer of the statement of action from one judicial system to another on the basis of the lack of jurisdiction over the case concerned seems to be not quite clear.
The above problem, nevertheless, cannot be solved exclusively in the framework of the discussion of the court authorities in the sphere of judicial control. It is to a great extent acute for other categories of cases, as well. Representatives of both judicial systems should participate in the discussion concerned. The practice of drafting and adoption of joint resolutions of the plenary sessions of the High Arbitration Court and the Supreme Court of RF may be one of the forms of such discussion and solution. In any case, it is evident that it is necessary, on the one part, to abandon the attempts to impose the priority of one judicial system over the other and, on the other part, to make a deeper cooperation of both courts in solution of the above problem. Aggressive policy of the highest judicial authorities aimed at "redistribution and pulling over" of competence, accompanied by legislative initiative in the above sphere, should also be noted as inadmissible.
Judicial Control and Concept of Administrative Court System Development in RF
On November 22 the State Duma of RF adopted in the first reading the draft Federal Law On Federal Administrative Courts in the Russian Federation initiated by the Supreme Court of RF.
As is noted in the explanatory note to the draft, the necessity to establish administrative justice to effect administrative proceedings is based on Articles 118 and 126 of the Constitution of RF, subject to which the justice is administered in common courts through civil, criminal, and administrative proceedings, and the Supreme Court of the Russian Federation is the highest judicial authority in civil, criminal, administrative and other cases subject to the jurisdiction of the common courts.
With references to the increasing number and special importance of the cases following from administrative relations, the Supreme Court has noted that the above categories of cases, in particular recognition as invalid of normative acts issued by various branches of power (including those issued by the subjects of the Russian Federation) and certain other disputes arising in the sphere of administrative relations are becoming more and more topical.
In consequence of the complexity of the above category of cases, their consideration and correct resolution undoubtedly require a high qualification of judges. But since the majority of these cases are considered in civil proceedings by district courts and regional courts, it is very difficult to ensure such qualification. The Supreme Court of RF also noted the complaints which cast doubt over the objectiveness of the judgements rendered in cases of appeals against the actions of highest officials of the Russian Federation, representative authorities on the grounds that due to the lack of financing the courts are compelled to receive from such authorities certain financial assistance and, hence, as the applicants believe, the courts are influenced to a certain extent by such authorities. In the opinion of the Supreme Court of RF it is possible to overcome negative tendencies in consideration of administrative cases by creation of independent administrative courts in the system of common courts, which would not be related to the existing territorial and administrative division of the country. For this purpose it is suggested to set up 21 federal district administrative courts within the respective federal districts (the jurisdiction of these courts will comprise several subjects of the Russian Federation) and federal interregional administrative courts whose jurisdiction will comprise several regions of the subjects of the Russian Federation.
Besides, it is suggested to set up an Administrative Board at the Supreme Court of the Russian Federation and, whenever necessary, respective boards in the regional courts.
It is assumed that federal district administrative courts will consider as a court of first instance the cases of verifying the legality of decisions taken by the heads of the subjects of the Russian Federation and their representative authorities, as well as the disputes between the subjects of the Russian Federation. They will also act as a court of second instance in regard of the cases considered in administrative boards of the regional courts.
Having admitted the expediency and necessity of gradual formation of judicial and procedural framework of the administrative proceedings following directly from the Constitution of RF, one cannot but pose a few questions regarding this concept.
First, will the creation of a sub-system of administrative courts, moreover, within the framework of the common court system, be able to solve a declared task of a qualified assessment of normative acts in the process of judicial control? It is in the course of development of the arbitration court system in RF that qualified judicial cadres are currently formed who are capable to professionally solve complicated categories of cases related to abstract assessment of normative acts especially important for business entities.
Second, implementation of the draft concept will require colossal expenditures and efforts, both material and organizational. At the same time, exercise and gradual development of authorities of arbitration courts in the sphere of judicial control are possible actually without additional measures of transitional nature.
Third, it should be acknowledged that for the efficient functioning of administrative courts there are no respective procedural frameworks and boundaries. Doctrinal and legislative amorphism of the administrative process does not make it possible to quickly elaborate effective procedural forms of administrative courts operation.
Hence, solution of the problem of the effective special judicial control within the framework of administrative court system under creation seems unreasonable. On the contrary, development and subsequent summing up of the experience in special judicial control both in the system of arbitration and common courts on the basis of the existing jurisdiction will make it possible to elaborate necessary principles and the program of subsequent development of administrative proceedings in the Russian Federation.
Normative Acts As an Object of Assessment of Arbitration Courts
The problems of hierarchy of normative acts goes beyond the framework of discussion of the arbitration courts' authorities in the sphere of judicial control. Nevertheless, it should be acknowledged that the draft of the High Arbitration Court, having a limited sphere of enforcement, still may be regarded as a substantiated initiative aimed at solution of a number of doctrinal and practical problems related to juridical conflicts and means of their resolution, even if only in the context of respective authorities of arbitration courts.
In particular, both in the doctrine and in practice there are many problems related to unsubstantiated multiplicity of types and forms of bylaws in the Russian Federation. Such an eclecticism, apart from historic and juridical and technical traditions, has a number of other explanations: federative structure; abundant and various ministries, departments of any kinds, and other executive authorities both on the federal and regional levels; a double status of a number of state authorities or agencies (e.g. the Central Bank of RF); the absence of transparency of common administrative procedures, and other factors.
One cannot but agree to the necessity to elaborate, sooner or later, the general principles of verification of legality of bylaws irrespective of the variety of their forms, types, and titles.
In this connection, one cannot avoid the problems of the so-called "masked" normative acts - the acts adopted by public authorities in order to avoid compliance with the rules of publication and issue of normative acts. Paragraph 2 of the Rules for Preparation of Normative Legislative Acts of Executive Authorities and Their Statutory Registration approved by the Decree of the Government of RF dated 13 August 1997, for instance, directly stipulates inadmissibility of normative act adoption in the form of letters or cables. Special legislation, e.g. civil and tax legislation, stipulate that normative regulation of issues using the instructions and other acts having "exceptionally internal effect" is inadmissible.
The practice, including court rulings, manifests that spreading of judicial control over such acts, which do not formally fall into the category of normative acts, though in reality being normative acts, has become a topical problem. This may be exemplified as follows.
The Orenburg regional court, terminating the proceedings in a case initiated pursuant to the complaint of an individual businessman about the Resolution On Taxation of the First Deputy Head of the Orenburg Administration, proceeded from the fact that the case was subject to consideration by the arbitration court. In confirmation of its conclusion, the court referred to the explanation contained in para 4 of the Resolution of the Plenary Session of the Supreme Court of RF and the Plenary Session of the High Arbitration Court of RF dated 18 August 1992 On Certain Issues of Jurisdiction of the Common and Arbitration Courts to the effect that the requests of organizations and individual businessmen to acknowledge as wrongful the actions of officials violating the rights and protected by law interests of the above organizations and individuals, provided the actions appealed against are formalized as directives or other documents, are not subject to consideration by the common courts. The Judicial Board for Civil Cases of the Supreme Court of RF, setting aside the determination rendered by the regional court, founded its decision as follows. With reference to Art. 22 of the Code of Arbitration Practice of RF of 1992 in force at that time (before 1 July 1995), it pointed out that such disputes would be subject to consideration by the arbitration court if the acts concerned were addressed to concrete persons or a group of persons and infringed the rights and interests of organizations and individual entrepreneurs protected by law. In this particular case of interest is windowed estimate of the nature of public authority act as a normative act, despite inadequate use of its form of a directive document, rather than solution of a jurisdictional matter by the court.
Another case, though not based on economic relations, is an example of efficient judicial unveiling of a bad faith practice in choosing the form of a bylaw. An individual applied to the Supreme Court of RF requesting recognition as invalid of four orders of the Ministry of Defense of RF, which are of a normative nature. The motive of such request was that the acts had not been registered with the Ministry of Justice of RF in a statutory manner, nor had they been published, and therefore they are illegal and cannot be enforced. Besides, the applicant requested to obligate the Minister of Defense of RF to re-work, register, and publish the acts concerned. In the course of the hearing the representative of the Ministry objected to such requests, having explained that the challenged orders are the internal documents of the Ministry and need no statutory registration. Having studied the materials of the case, the court found that the orders of the Ministry were illegal, and that in this respect the requests should be upheld. Having analyzed Article 15 of the Constitution of RF, provisions of the Presidential and Governmental Decrees defining the procedure of registration and publication of the normative acts of federal executive authorities, the Supreme Court stated that the acts of such authorities affecting the rights, freedoms, and duties of a man and a citizen, apart from the acts and their individual provisions containing information which is a state secret or confidential, are subject to registration and publication. Having found at the court hearing that the orders of the Ministry of Defense challenged by the applicant are normative acts affecting the rights, freedoms, and duties of a man and a citizen, which had not been registered with the Ministry of Justice of RF and published in a prescribed manner, the court found that the challenged orders cannot be recognized as lawful. The legal basis of such decision testifies to the fact that the court in the given example checked the "outward effect" (the rights and duties of third parties) of the normative act.
Thus, revealing a normative character of a challenged act may predetermine the competence of the court to consider a respective case, the nature of the case under consideration, and the procedure of subsequent proceedings.
By virtue of the above, it seems that the draft of the High Arbitration Court should either simply point out that the subject of the assessment by the arbitration courts may be "other acts exhibiting characteristic features of normative acts", or try to define respective characteristic features[8]. This will make it possible to introduce in the sphere of judicial control a bad faith practice of issuing normative acts, avoiding general legislative framework of law drafting corresponding to the principles of the state of law. On the other hand, such provision will make it possible to avoid the situation when the court is compelled to acknowledge that it has no jurisdiction over the particular case exclusively on the basis of formal characteristic features of the challenged act, without consideration and finding out its true legal nature.
The Structure, Place, and Form of the High Arbitration Court Draft
The draft structure directly follows from the requirement to identify the court authorities to exercise the special judicial control, which have been formulated in para 3 of the operative part of the above Ruling of the Constitutional Court of RF dated 16 June 1998 On the Case of Construction of Individual Provisions of Articles 125, 126, and 127 of the Constitution of RF.
The approach used by the draft initiators, which implies that the most principal provisions pertaining to broadening of the authorities of arbitration courts should be fixed in a small federal constitutional law, seems to be quite reasonable. In the event such law is promptly passed, individual more detailed provisions of the special judicial control procedure could be fixed in a codified and more complex new draft Code of Arbitration Practice.
Nevertheless, attention should be paid to the necessity of additional approval of the contents of normative provisions of the draft under review and the draft of a respective chapter of the Code of Arbitration Practice. The text differences in the wordings may be justified, on the one hand, by the difference in objectives, tasks, and system of the two drafts, but on the other hand will inevitably entail problems at the enforcement stage, in the event the drafts are approved.
The advantages of implementation of the concept of vesting the arbitration courts with additional authorities in the sphere of special judicial control in the form of a constitutional law obviously follow from the priority enforcement of its provisions in the future: the stability of the federal constitutional law (FCL) predetermines the difficulty of rash and careless modification of the concept of the judicial system development fixed in the above law and redistribution of authorities among different courts. The necessity to adopt this law exactly in the form of a FCL is also substantiated with the reference to an express requirement in para 3, Article 128 of the Constitution of RF: "The authorities, procedure of formation and operation of the Constitutional Court of the Russian Federation, Supreme Court of the Russian Federation, High Arbitration Court of the Russian Federation and other federal courts are set forth by a federal constitutional law".
Finally, express references to admissibility of judicial control exercised by the court only if the requirements to the form of vesting such authorities in the courts are met (including an ultimatum requirement that the law be a federal constitutional law), are contained in a number of decisions of the Constitutional Court of RF.
Nevertheless, the framework of the scientific and practical discussion allows, at least, to contemplate certain outlines of the alternative approach to the problem concerned. Based on the absolute priority of ensuring the citizens' right of relief within the framework of the accessible and effective process (para 1 and para 2, Article 46 of the Constitution of RF), we can try to substantiate admissibility of another interpretation of para 3, Article 128 of the Constitution which, in its turn, predetermines the possibility to implement the concept of distribution of judicial control authorities by adoption of a usual federal law.
The necessity to search for the grounds for implementation of such approach is explained by political rather than legal considerations. It is easy to predict that extensive authorities of federal courts to assess rule-making of the executive authorities, on the one hand, and of the regional legislator, on the other hand, may be opposed at various stages of law making process both on the part of departmental lobbyists in the State Duma of RF and regional representatives in the Council of Federation of RF. The necessity to get a qualified support of both chambers of the parliament may predetermine a tragic destiny of the draft concerned. In this connection appearance of a less stable, but more operative ordinary legislative regulation of this issue would promise much more advantages for ensuring protection of the subject of economic activities than the failure of the respective federal constitutional law draft.
Finally, the idea of adoption of a simple federal law on this issue may find a purely legal argumentation, as well. Attention should be paid, first of all, to the vagueness in comprehension of para 3, Article 128 of the Constitution of RF as regards definition of the scope and substance of the terms "authorities" and "the procedure of operation" of the arbitration courts as a subject of regulation of respective constitutional laws. Construction of the article concerned actually undertaken in the Ruling of the Constitutional Court of 16 July 1998 goes, first of all, outside the framework of construction by the Constitutional Court in this particular case and, secondly, contains no comprehensive estimate of the contents of the article concerned in aggregate with other provisions of the Constitution of RF, in particular, those of Article 18 and paragraphs 1 and 2 of Article 46.
Besides, if observed consecutively, the principle "arbitration courts' authorities - only pursuant to a FCL" may result in an involuntary discrediting of those legislative decisions on the basis of which the arbitration courts currently efficiently execute their public and legal mission in the form of the judicial control, as well as put to doubt an extensive and positive practice gained in respect to this issue. Mostly this observation refers to the practice of enforcement of para 2, Article 138 of the Tax Code of RF on the basis of which court appeal against the acts (including normative ones) of tax authorities by organizations and individual entrepreneurs is made by filing a statement of action with the arbitration court in compliance with the law of arbitration procedure.
Correlation Between the Court Authorities to Verify Legality of Normative Acts
Proceeding from interpretation of the current law by Rulings of the Constitutional Court of RF, Plenary Sessions of the Supreme Court of RF and the High Arbitration Court of RF[9], any actions (resolutions) of governmental authorities and local authorities, except the actions (resolutions) whose verification is referred to the exclusive competence of the Constitutional Court of RF or in regard of which another procedure for appeal is prescribed, may be appealed in court.
Hence, the first restriction of the arbitration court authorities in the sphere of judicial control, which found a fair reflection in the High Arbitration Court's draft, is the authorities of the Constitutional Court of RF.
These authorities include, in particular, resolving of cases of compliance with the Constitution of RF (para 2, Article 125 of the Constitution of RF) of:
a) federal laws, normative acts of the President of the Russian Federation, Council of Federation, State Duma, Government of the Russian Federation;
b) constitutions of the Republics, charters, as well as laws and other normative acts of the subjects of the Russian Federation issued on the matters related to the competence of state power bodies of the Russian Federation and joint competence of the state power bodies of the Russian Federation and its subjects.
Proceeding from the construction given by the Constitutional Court of RF, it does not follow directly from the Constitution that the courts are entitled to exercise judicial control over normative acts listed in Article 125 irrespective of a particular case and recognize these as inoperative due to the discrepancy with another normative act of greater legal force. At the same time, construction of Articles 76, 118, 120, 125, 126, 127 and 128 of the Russian Constitution does not exclude the legislator's right to specially stipulate exercise by the common and arbitration courts in administrative proceedings of the authorities to verify the compliance of normative acts below the level of a federal act listed in Article 125 (sub-paragraphs "a" and "b" of para 2) with another act having greater legal force, except with the Constitution of RF.
The second and third restrictions of arbitration courts' authorities in the sphere of judicial control follow from the above ascertainment:
- a normative act should be below the level of a federal law, since in this particular case it is the compliance with the Constitution that is discussed;
- no verification of compliance with the Constitution of RF can be made.
These provisions should be taken into account in the High Arbitration Court's draft for the purpose of differentiation of authorities within the framework of a judicial system. In other words, the federal laws as a target of judicial control should be excluded from the list of normative acts, verification of whose compliance with federal constitutional laws may be within the jurisdiction of the High Arbitration Court.
Nevertheless, one cannot but express doubt in substantiation of such broadening, as it seems, construction of the authorities of the Constitutional Court of RF. Is the said court entitled to construe the Constitution in the sense of depriving certain judicial bodies of the right to verify the laws and constitutional laws as regards the issues of their special competence and will it mean, first, restriction of the right of relief and, second, redistribution of authorities by the Constitutional Court in its favor, i.e. "judgement rendered in its own case" on the part of the Constitutional Court of RF[10]?
The text of the draft under review contained no restrictions of the arbitration courts' authorities as regards jurisdictional matters, apart from the reference to inadmissibility of consideration of the issues attributed to the exclusive competence of the Constitutional Court of RF.
Nevertheless, the draft new version of the Code of Arbitration Practice, developing the concept of the draft under review as regards the arbitration courts' authorities, refers to the fact that the application to challenge a normative act is not subject to consideration, if it is "challenging of normative acts whose recognition is referred to the competence of common court".
It seems that the above rule is insufficiently consecutive in reflection of the principle of vesting the arbitration courts with special authorities in the sphere of verification of compliance of normative acts with other normative acts within the special competence of arbitration courts. Proceeding from the general principle of the guarantee of the right of relief, the authorities of the common courts should, as a rule, be more general as compared to the authorities of the arbitration courts. It seems that the above rule will be reasonable only in case only special (in this particular case - super special) matters are excluded from the authorities of arbitration courts to exercise judicial control, which have been explicitly referred to the competence of common courts being, judging by general characteristic features (in the context of the draft under review), within the competence of the arbitration courts.
Otherwise, mutually relinquishing rules may appear in the new version of the law of civil procedure and the draft Code of Arbitration Practice. Thus, for instance, Article 253 of the draft Civil Code stipulates the rights of individuals, associations of individuals, and organizations to file applications with the court seeking recognition of the normative legislative act as running contrary to the law in full or in part. The circumstance which precludes consideration of such applications is the case when verification of compliance of normative legislative acts with the Constitution is within the competence of the arbitration court. Such lack of coordination seems to be inadmissible.
Causes and Subject of Consideration of an Application
The High Arbitration Court's draft stipulates that the material cause for filing a respective application with the arbitration court is the adoption of the challenged normative legislative act infringing the rights and lawful interests of the applicant.
The practice of consideration of disputes in exercise of arbitration courts' authorities pursuant to Article 138 of the Tax Code demonstrates that the courts, as a rule, have no difficulty in determining the degree of the relation between the rights and interests of a particular applicant and the normative act challenged. Nevertheless, with reference to the experience of German courts in consideration of such cases, it seems reasonable to point out more express criteria for estimation of the material interest of the applicant in a respective provision of the draft. In particular, it may be specified as a prerequisite of challenging the normative act that the respective act should either directly infringe the applicant's rights by virtue of its enforcement in the nearest future in regard of the applicant or may infringe the applicant's rights by virtue of the danger of its enforcement in the future predetermined by the nature and subject of activities of the applicant.
Finally, it seems that the subject of discussion by the professionals may be the suggestion to broaden the circle of possible applicants at the expense of individuals not engaged in any business, provided the general rule that the challenged act should regulate the relations "in the sphere of entrepreneural and other economic activities".
This broadening provision would be aimed at widening of the individuals' access to justice in the specific form of special judicial control. In fact, the subject of estimation in this case will frequently be material relations traditionally referred to the competence of the arbitration court. Unavoidable problems related to the undefined jurisdiction over a particular case could be softened by assigning to this category of cases the status of alternative jurisdiction, i.e. by granting to an individual the right to choose the court for the purpose of judicial control exercise: the arbitration or common court.
Nevertheless, such suggestion may be fairly criticized from the position of the principle of a guaranteed access to justice: can we guarantee a substantiated procedural choice by the individual who determines whether he will pursue a more lengthy and sparing civil process or a dynamic, but more demanding arbitration process?
As regards the subject of verification of the normative act, it seems that even with due regard for a restricted sphere of enforcement of the High Arbitration Court's draft, a certain algorithm of assessment of the rightfulness of the normative act may be reflected in the provisions of arbitration court authorities.
In particular, the arbitration court may be charged with assessment of legality and compliance with law of the following circumstances.
Authorities of a body to issue (adopt) a respective act. Such assessment may be carried out using formal causes, but may also include the assessment of admissibility of a bylaw regulation (i.e. the assessment of the form of a normative act).
Procedure of issuance (adoption) of an act including adoption per se, required approval, signing, publishing, coming into force. With reference to the experience in developing judicial practice and doctrine in Germany in such category of cases, one cannot exclude the possibility of differentiated approach to the estimate of material and immaterial violations of adoption procedures in subsequent development of judicial practice.
Similar detailed reference to the subject of the arbitration court examination would make it possible to make the judges' work easier, especially at the initial stage of exercise by the arbitration courts of their authorities. The above special requirements would facilitate elaboration of criteria of legality and substantiation of judicial acts rendered in this category of cases. On the other hand, positive results of the initial assessment of a normative act (authorities and procedure) would relieve the parties and the court from the necessity of subsequent meaningful examination.
The contents of the normative act challenged. In order to develop subsequent judicial practice in this matter, it seems reasonable to include in the subject of verification at least the most general reference to the necessity of analysis and comparison between the objectives and means of a bylaw normative act and the objectives of the normative act for implementation of which the said bylaw was adopted.
The analysis of the draft as compared to the practice of consideration by the Constitutional Court and the Supreme Court of RF of the cases of legality of normative acts shows that adoption of the draft leaves open a number of questions subject to clarification in the course of exercise of the authorities granted.
It still remains unclear, for instance, whether the court may verify the legality of an unchallenged part of the act. Is the court bound, when rendering the judgement, by causes and arguments of the applicant or does it still have to find out all causes, irrespective of those quoted by the applicant and the interested parties in substantiation of their claims and objections, for which the challenged act may be recognized as invalid?
Solution of these and similar issues is closely related to the necessity of a balanced account for private interests and interests of public law and order. Matching of the two interests predetermines the substance of the special judicial control as a procedural institute. The court, balancing between the two interests, fulfills a fairly specific function in the process of consideration of this category of cases.
Certain approaches to their solution in the cases under review could be suggested as possible recommendations.
It seems that the court should recognize the normative act as invalid in full, even if it contains both the provisions that do not comply with law and those that comply with it, if provisions recognized as invalid run contrary to the law and are closely connected with the provisions that comply with law, and thus partial recognition of the act as invalid would make the existence of such act senseless.
When challenging the normative act in part, the court, as it seems, is entitled to go beyond the limits of challenging and to recognize the act as invalid in full in the event the normative act whose part is challenged (with due regard for the specifics of the regulation subject) represents a "complete legislative layer" including interacting rules, and verification of a certain part of it is unreasonable.
In the interests of legality and with due regard for the "normative character" of proving that prevails in such cases, the court is not bound by a legislative cause of the applicant's claim and may verify compliance of the challenged act with other acts, as well. However, this does not relieve the court from examination and assessment of the applicant's arguments and those of the adversary party which has adopted the challenged act[11].
Legal Effect of Judicial Control
The subject of subsequent discussion by the legal community may be the issue of the moment the normative act comes into force and legal consequences of the judgement recognizing the normative act as invalid.
The German approach to the problem is to ascertain that the normative act challenged is recognized as invalid as if from the moment of its adoption. Nevertheless, recognition as invalid does not entail change of the lawful force of any individual acts adopted (performed) on the basis of the normative act challenged.
Such restriction is primarily connected with the necessity to ensure stability of the law and order. Even if the judicial authority states that the legal system is erroneous as regards the act of rule-making, this should not challenge the efficiency of other mechanisms of the state.
It seems, on the other hand, that certain concern in implementation of such approach is quite substantiated. In the conditions of extremely aggressive and fiscal toward businessmen governmental policy, the absence of mechanisms of compensatory or penalty liability for adoption of illegal normative acts (which entailed damage as a result of their multiple enforcement) may result in actual minimization of the public effect of implementation of the concept of vesting the arbitration courts with authorities to exercise special judicial control.
In particular, this will be reflected in a significant decrease of motivation for the businessmen to enter this category of cases: being complicated and risky in its contents, a particular case may have a zero property effect for the claimant who has suffered damage as a result of enforcement of respective acts.
By virtue of the above consideration, it seems reasonable to discuss the issue of more freedom to be provided to courts in determination of the legal effect of the judgement to be rendered. This will allow the court to make a more windowed estimate of correlation between the applicant's private interest (as well as private interests of other persons) and the interests of ensuring the public law and order.
Since the judgement rendered in a case of this category will actually have the effect comparable to adoption or annulment of the challenged normative act, a special attention should be paid to the necessity of elaboration of detailed provisions relating to publishing of respective judicial acts.
In particular, inclusion of the requirement to publish officially, first of all, the full text of the judicial acts, secondly, all judicial acts issued in connection with consideration of this category of cases, including "negative" judgements confirming legality of the challenged normative acts, should be acknowledged substantiated. In any case, the search for solution of the issue concerned should be made concurrently to elaboration of an agreed approach to general problems of judicial acts publication and ensuring access and exchange of information on legal positions of judicial authorities.
[1] For the purposes of this report, the special judicial control is defined as a special variety of activities, carried out within certain procedural limits and in a certain procedural form, of authorized judicial bodies in checking the compliance of the normative acts with other normative acts pursuant to a special request of an authorized person or agency to carry out such check. It should be specifically noted that the use of the term "abstract judicial control" encountered, in particular, in the judgements of the Constitutional Court of RF as opposed to the term "incidental judicial control", i.e. exercised in connection with consideration of a particular case (in the meaning of para 3, Art. 5 of the Federal Constitutional Law dated 31 December 1996, No. 1-FKZ On Judicial System of the Russian Federation) should be acknowledged as not quite corresponding to the contents of the legal phenomenon under review: one of the causes for application to a court for recognition of a normative act as invalid or inoperative is, as a rule, a concrete substantiated legal interest of the applicant.
[2] It should be noted that the above Ruling of the Constitutional Court of RF contains a number of auxiliary terms and conditions defining admissibility of vesting the courts with the authorities to exercise special judicial control. A more detailed analysis of these conditions will follow below.
[3] Special judicial control as a vehicle or form of ensuring an effective judicial protection in the meaning of Article 18 and para 1 and 2 of Article 46 of the Constitution of the Russian Federation should be recognized as a substantiated and widely used position. See, e.g. Osoboe mnenie sudji Konstitutsionnogo Suda RF N.V. Vitruka (Dissenting Opinion of N.V. Vitruk, the judge of the Constitutional Court of RF) and para 2 and 3 of Osoboe mneniya sudji Konstitutsionnogo Suda RF G.A. Gadzhieva po delu o tolkovanii otdelnykh polozhenij statei 125, 126 i 127 Kostitutsii RF (Dissenting Opinion of G.A. Gadjiev, the judge of the Constitutional Court of RF, in the case of construction of individual provisions of Articles 125, 126 and 127 of the Constitution of RF).
[4] See, e.g., D.A. Fursov, Uchastie arbitrazhnykh zasedatelei v rassmotrenii i razreshenii ekonomicheskikh sporov (Participation of Arbitration Assessors in Consideration and Resolution of Economic Disputes) in: Vestnik Vysshego Arbitrazhnogo Suda, 1998, No.2, pp.72-73.
[5] See Ruling of the Plenary Session of the Supreme Court of RF dated 21 December 1993, No. 10 On Consideration by Courts of Complaints Against Wrongful Actions Infringing the Rights and Freedoms of Citizens (as amended on 25 October 1996, 14 February 2000).
[6] Attention should be paid to a number of additional provisions pertaining to judicial control and defined in the above Ruling: it is the opinion of the Constitutional Court that the Russian Constitution does not directly stipulate the possibility for the courts to verify the compliance of the laws of the subjects of the Federation with federal laws irrespective of any particular case. However, from the viewpoint of the Constitutional Court the common courts have the right to verify the compliance of the laws of the subjects of the Federation with a federal law in the event it does not involve verification of compliance of such law with the Constitution of RF. The courts are not entitled to set aside or recognize as invalid the provisions of the Constitutions and Statutes of the subjects of the Russian Federation, nor are they entitled to verify compliance of any normative acts of the subjects of RF with the Constitution of RF. True, if any law contains provisions similar to those that have already been recognized by the Constitutional Court as running contrary to the Constitution of RF, the courts may confirm invalidity of such laws.
[7] The model of the intermediate link of the courts independent of the jurisdictions of the subjects of RF is also contained in the draft Federal Law On Federal Administrative Courts in the Russian Federation initiated by the Supreme Court of RF. A more detailed estimate of the administrative courts concept as applicable to the authorities of judicial control will be given below.
[8] As a reference point for such definition respective rulings of the Supreme Court of RF may be used. The plenary session of the Supreme Court of RF in its Resolution of 27 April 1993 On Certain Issues Arising in Consideration of Cases Initiated by Public Prosecutors and Seeking Recognition of Legislative Acts as Running Contrary to Law (para 2) explained what acts are of normative nature, having outlined the features discerning these from individual acts. Normative acts comprise the acts establishing rules of law (rules of conduct) mandatory for an unspecified group of persons, intended for repeated enforcement, in effect irrespective of whether concrete relations specified in the act have arisen or ceased.
[9] See the above court acts.
[10] See paragraphs 1 and 3 of the Dissenting opinion of G.A. Gadzhiev, the judge of the Constitutional court of RF, in the case of construction of individual provisions of Articles 125, 126, and 127 of the Constitution of the Russian Federation.
[11] E. Uksusova, Osparivanie zakonnosti normativnykh aktov v sudakh obshchei yurisdiktsii (Challenging of Legality of Normative Acts in Common Courts), in: Rossijskaya Yustitsiya (Russian Justice), 1998, No.8
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