Russia has abolished its highest commercial court and given president Vladimir Putin more power over prosecutors in what many legal experts and businesses decry as a move further undermining the country’s legal system.
The Federal Council, the upper house of parliament, on Wednesday changed the constitution to allow the merger of the Supreme Court of Arbitration into the Supreme Court and to transfer the right of appointing and firing prosecutors in the regions from the prosecutor-general to the president.
Business executives and lawyers said the arbitration courts that rule on commercial disputes in Russia were more professional and less prone to political interference than civil and criminal courts.
“Getting rid of the highest organ will severely weaken the system of commercial courts,” said a senior official at a local court of arbitration who declined to be named. “It makes it even more likely that the courts will be used against businesspeople who fall foul of the Kremlin.”
The changes come as companies’ unwillingness to invest has caused growth to grind to a halt in the world’s fifth-largest economy. Entrepreneurs frequently cite doubts over the rule of law and the weakness of investor protection as the top concerns that keep them from investing in Russia.
Human rights advocates and lawyers say that the country’s courts have once again become an instrument for disciplining or defeating political opponents. The case of Mikhail Khodorkovsky, the business magnate-turned politician serving a nine-year sentence on fraud charges is seen as the turning point . Mr Khodorkovsky, once Russia’s richest man, had the assets of his Yukos conglomerate distributed among business rivals and state companies after his arrest.
In June, when Mr Putin first proposed the changes to the court system, he argued that the Supreme Court of Arbitration had become a source of legal insecurity itself because businesses dissatisfied with the results of legal action in a civil court would turn to the other branch and receive a different ruling.
But legal professionals have said that the reform raises far greater risks.
Last week, more than 80 law firms opposed the changes in an open letter to Mr Putin. Anton Ivanov, the head of the Supreme Court of Arbitration, has also warned that the merged top court would lead to a dramatic drop in the quality of rulings.
“The influence a court like that will have on court practice will drop dramatically,” he said.
Some observers see the changes as another sign that Dmitry Medvedev, the relatively liberal prime minister, is losing a power struggle within Mr Putin’s administration. Mr Ivanov was a law school classmate of Mr Medvedev.
This month, Mr Putin called for giving law enforcement organs the right to start criminal investigations related to companies’ tax records without informing the Federal Tax Service. The proposal triggered a rare public protest from Mr Medvedev as it would overturn one of the reforms he implemented during his term as president.
Copyright The Financial Times Limited
