Decision of Economic court of the Commonwealth of Independent States

of May 15, 1997 No. C-1/19-96

(extraction)

The interstate economic committee of Economic union appealed to Economic Court of the Commonwealth of Independent States with request about interpretation of part four of article 31 of the Agreement on creation of Economic union of September 24, 1993 providing for state members of Economic union possibility of settlement of matters of argument in other international judicial authorities in addition to Economic Court.

In this regard the Interstate economic committee asks to explain to what interstate judicial authorities the State Parties of the Commonwealth of Independent States can address and with what finance costs such address can be connected.

The economic Court came to the following conclusions.

Interpretation of part four of article 31 of the Agreement on creation of Economic union shall be performed in interrelation with provisions of parts one and the second mentioned Article.

The provision of part one of article 31 of the Agreement determines that "Contracting parties shall resolve the matters of argument connected with interpretation and accomplishment of this Agreement by negotiations or by the appeal to Economic Court of the Commonwealth of Independent States".

The obligation of the State Parties of the Agreement on creation of Economic union provided in this regulation to resolve the matters of argument which arose between them connected with interpretation and agreement performance in Economic Court of the Commonwealth of Independent States was assumed by all states which signed and ratifying the Agreement.

According to depositary, the Agreement was signed and ratified by the Azerbaijan Republic, the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Moldova, the Russian Federation, the Republic of Tajikistan, the Republic of Uzbekistan.

All specified states, and also Georgia and Turkmenistan which joined the Agreement acquired the status of state members of Economic union.

As the associated member Ukraine joined Economic union.

According to Court, the obligation of the State Parties of the Agreement fixed in part one of article 31 of the Agreement to appeal to Economic Court for the dispute resolution acts as the unconditional basis of obligatory jurisdiction of Economic Court of the Commonwealth of Independent States for state members of Economic union on the meant circle of matters of argument.

This conclusion is validated by provision of part two of article 31 of the Agreement which establishes: "If the Economic Court recognizes that any state member of Economic union did not execute one of obligations assigned to it by this Agreement, this state shall take the measures connected with accomplishment of the decision of Economic Court".

The analysis of regulations of the Agreement on creation of Economic union in total allows to draw conclusion on possibility of the appeal to Economic Court of state members of Economic union as well in case of the disputes following from the agreements signed in pursuance of obligations assumed under the Agreement.

Jurisdiction of Economic Court does not demand from state members of Economic union of the conclusion of the special agreement (compromise) about transfer for consideration of Economic Court of the matters of argument which arose between them. Based on parts one and the second the Agreement on creation of Economic union the interested states can appeal to Economic Court unilaterally and as it is direct, passing stage of negotiations, and in case of not achievement of positive results during negotiation process.

State members of Economic union undertook to resolve among themselves matters of argument by two methods: by negotiations or by use of the international judicial process - appeals to Economic Court of the Commonwealth of Independent States, also have the right to use any of the specified methods.

Logical interpretation of parts one, the second and fourth article 31 of the Agreement on creation of Economic union allows to draw conclusion that state members of Economic union, having recognized jurisdiction of Economic Court obligatory in case of permission of the matters of argument connected with interpretation and agreement performance, and also the agreements signed in pursuance of obligations assumed under the Agreement cannot address to other international judicial authorities, passing Economic Court. Violation of the provisions containing in parts one and the second Agreements will take otherwise place.

Proceeding from obligation of decisions of Economic Court for state members of Economic union, the part four of article 31 of the Agreement determining that "in case of impossibility to settle matters of argument by negotiations or through Economic Court of the Commonwealth of Independent States Contracting Parties agreed to solve them in other international judicial authorities according to their rules and procedures" cannot form also the basis for the solution of question of possibility of appeal of the decision of Economic Court in other international judicial authority. The decision of Economic Court according to Item 10 parts 2 Provisions on Economic Court of the Commonwealth of Independent States approved by the Agreement on the status of Economic Court of the Commonwealth of Independent States of July 6, 1992 can be appealed by the interested states only in the Plenum of Economic Court.

According to Court, the provision of part four of article 31 of the Agreement has declarative character as in it consensus of state members of Economic union is fixed to resolve matters of argument in other international judicial authorities. But also at the same time this regulation contains the precedent condition of realization of such consent - impossibility of settlement of matters of argument by negotiations or through Economic Court.

Taking into account stated the Court considers that the impossibility of the dispute resolution in Economic Court can come only according to the procedure, established by rules of practice. The regulations of Economic Court of the Commonwealth of Independent States provide the termination of proceeedings by Court if there are no premises necessary for substantive prosecution (the subitem "d" of Item 8. 54). In this case state members of Economic union have the right to submit matters of argument of other international judicial authorities.

The analysis of system of the international judicial authorities including as directly international courts, and arbitral authorities which is carried out by Economic Court for the purposes of this interpretation shows that disputes of state members of Economic union fall under jurisdiction universal (on coverage of jurisdiction and subject of competence) international judicial authorities - UN International court and Permanent chamber of Reference tribunal.

Legal basis for the appeal to the specified courts are:

- the conclusion the parties of the special agreement (compromise) concerning permission of specific dispute in UN International court or Permanent chamber of Reference tribunal;

- submission by the state of the statement for recognition of obligatory jurisdiction according to all legal issues on disputes with the states which made the same statement as the basis for the unilateral appeal to UN International court.

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