Why the European Court of Human Rights?
Since the original tax reassessment in 2003, the management of Yukos has pursued all available legal remedies against the Russian authorities, seeking to uphold its fiduciary responsibilities, and adhere to the rule of law. Unfortunately, there was no rule of law for Yukos in Russia.
That Russia’s judicial proceedings are often dominated by the state is a widely acknowledged fact. For example, the US State department, in its online report on Russia, says:
In spite of the general tendency to increase judicial independence ... many judges still see their role not as of impartial and independent arbiters, but as of government officials protecting state interests. ... The judiciary is not independent, is often subject to manipulation by political authorities, and is plagued by large case backlogs and trial delays.
Meanwhile in June 2009, a commission of the Parliamentary Assembly of the Council of Europe, presided over by Ms Leutheusser-Schnarrenberger, stated that:
In the light of meetings with senior representatives of the Supreme Court on the one hand and leading independent experts, former judges and lawyers on the other, my impression is that Russian judges are – still, and maybe even increasingly so – under serious pressure to function as expected by the powers-that-be.
The English Court of Appeal, in the Deripaska case, held that, even on the most favourable view of the evidence concerning the independence of the Russian courts, it was accepted on both sides that the Russian courts would lean towards the Russian Government, either where it was a party or where strategic interests were at stake:
In the present case what is of concern is that it appears to be common ground between the experts that, in certain cases, the arbitrazh courts cannot necessarily be expected to perform their task fairly and impartially. Professor Stephan characterizes that as only applicable in a case whose outcome will affect the direct and material strategic interest of the Russian state.
Finally, in its 2007 Nations in Transit report, the international human rights organisation Freedom House said:
Russia’s Constitution and legislation provide protections for political, civil, and human rights, but practices in the judicial systems frequently fall short of these ideals. Representatives of the state are often above the law and have great advantages compared with individual citizens. Thus, while processes for resolving commercial disputes have become more reliable, the state still intervenes where it has a strategic interest.
Freedom House concluded that:
Russia scores very poorly on ratings of judicial independence. The state uses the courts to protect its strategic interests and political goals. Many Russians believe that they cannot get justice in Russian courts and appeal to the European Court of Human Rights.
It was against this background that, on 23 April 2004 (a few days after the imposition of the 2000 retrospective tax assessment) Yukos submitted its application to the European Court of Human Rights.