Determination of Economic Court of the Commonwealth of Independent States

of March 20, 1997 No. C-1/11-96

Economic Court of the Commonwealth of Independent States in structure:

the chairman - the chairman of Economic Court Safiullin D. N.,

judges of Economic Court of the Apostle D.D., Bekenov R. A., Vylkova I. K., Dashuka L. A., Kerimbayeva A. Sh., Makhmudova L. Sh., Miroshnik V. I., Plaksina S.A., Simonyana G. V., Tolibova X.,

having heard the judge of Economic Court Bekenov R. A. about official interpretation of the Decision of Economic Court of the Commonwealth of Independent States of September 4, 1996 No. C-1/11-96 about interpretation, established:

on requests of the Council of Ministers of Defense of the State Parties of the Commonwealth of Independent States and the Ministry of Defence of the Russian Federation the Decision of Economic Court of September 4, 1996 for No. C-1/11-96 this interpretation of provisions of the Agreement between the State Parties of the Commonwealth of Independent States on social and legal guarantees of the military personnel, persons discharged from military service and members of their families from February 14, 1992; Safeguards agreements of the rights of citizens of the State Parties of the Commonwealth of Independent States in the field of provision of pensions of March 13, 1992; Agreements on procedure for provision of pensions of the military personnel and their families and national insurance of the military personnel of the State Parties of the Commonwealth of Independent States of May 15, 1992 regarding compulsory national insurance of the military personnel and members of their families living in the territory of the State Parties of the Agreement for the purpose of permission of matters of argument in case of collision of regulations of the national legal system of the State Parties of the Commonwealth with the regulations containing in interstate (intergovernmental) agreements.

However, as practice shows, in the certain State Parties of the Commonwealth of Independent States, the Decision of Economic Court of September 4, 1996 is understood ambiguously. On its basis opposite conclusions concerning payments of insurance sums to members of the family of the died military personnel of the Armed Forces of the Russian Federation insured according to the legislation of Russia by the Military insurance company of the Russian Federation are drawn if these family members live outside Russia - in the territory of the State Parties of the Agreement of May 15, 1992. With respect thereto the Economic Court considers necessary on own initiative to interpret the Decision of Economic Court of the Commonwealth of Independent States of September 4, 1996 No. C-1/11-96, having explained on whom the obligation lies to make payments of insurance sums to members of the family of the died serviceman: the state in which the serviceman served and it was insured, or the state in the territory of which members of the family of the dead live.

Having studied the documents which are available in case, having discussed the conclusions of general advisers of Economic Court of V. Borovtsov and V. Zhdan, the Economic Court came to the following conclusions:

1. It is provided in article 1 of the Agreement of May 15, 1992 that provision of pensions and compulsory national insurance of the military personnel of Armed Forces of the State Parties of the Commonwealth and other military forming created by legislature of these states, the Joint Armed Forces of the Commonwealth, Armed Forces and other military forming of the former USSR, and also provision of pensions of families of this military personnel is performed on conditions, on regulations and according to the procedure which are established or will be established by the legislation of the State Parties in the territory of which the specified military personnel and their families live, and before adoption of legal acts by these states on the matters - on conditions, on regulations and according to the procedure, the established legislation of the former USSR.

The systematic and grammatical analysis of the provided Article shows that the Agreement differently approaches obligations of the states in the field of provision of pensions and compulsory national insurance of persons specified in the Agreement. Provision of pensions of the military personnel and members of their families is performed on conditions, on regulations and according to the procedure which are established (or will be established) by the legislation of the states in which the military personnel and their families lives respectively.

As for compulsory national insurance, the Agreement recognizes that insurance is performed on conditions, on regulations and according to the procedure, the established legislation of that state where live (lived at the time of the conclusion of the insurance contract) the military personnel. The economic Court in the Decision of September 4, 1996 legally stated that it logically follows from the nature of the relations developing in the course of compulsory national insurance as the serviceman, but not members of his family is subject to insurance.

Really, insurance legal relationship is, first, difficult on structure, secondly, - lasting. It arises at the time of the conclusion of the insurance agreement and stops after the end of all payments which need follows from the specified agreement. The insurance agreement on the basis of the legislation provides, in particular, who, in what sizes, in case of what approach of conditions, in what terms makes payments of insurance sums to whom the insurance sum in case of death of insured shall be paid. All these rules and conditions are determined by the legislation of that state in which the insurance contract is signed: practically this that state where the serviceman lives and serves. Therefore expenses on compulsory national insurance of the serviceman who sustained injuries, and in case of his death - to members of his family, are born by the state which interests were protected by the citizen, being on military service and which undertook the obligations following from the agreement of compulsory personal national insurance of the serviceman.

From here inevitably follows that irrespective of in the territory of what State Party the member of the family of the insured serviceman lives, payment to this member of the family of insurance sums or lump-sum allowance for the died serviceman is made by the state where the serviceman was insured. In turn, follows from this formulation that all obligations to the insured serviceman and members of his family following from the agreement of compulsory national insurance of the serviceman before their full implementation and termination of the contract are born by insurance company or other authorized body of the state where the serviceman served.

2. One more provision concerning compulsory national insurance of the military personnel contains in article 3 of the Agreement of May 15, 1992. In it it is determined that expenses on compulsory national insurance of the military personnel are performed by the State Parties at the expense of their budget without mutual calculations between the states.

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