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Vedomosti: Gazprom warns foreign investors against judicial corruption in Russia

Gazprom has warned that Russian courts may favour national companies, and that foreign investors might face corruption and “political resistance” to the execution of judgments awarded to them by international arbitration, the Russian energy giant said in an investment memorandum. This is a formality, but a very prejudicial one to national justice, say experts.

In its memo on the issue of Eurobonds, worth $15 billion, Gazprom spoke a well-known truism, confirms MDM-Bank analyst Mikhail Galkin.

But a legal expert with a major oil company said that all judges should not be tarred with the same brush, adding that his corporation never made such statements. He is surprised at Gazprom’s fears: “What sways courts now is bureaucratic brawn, which the monopoly enjoys in full.”

Yevgeny Rashchevsky, a lawyer with the Yukov, Khrenov and Partners bar association, thinks Gazprom is being overcautious: “Indeed, why not mention the risks in case investors consider the Russian judiciary ineffective?”

But judges disagree with the charges of inexperience, lack of commitment and corruption aimed at them. “Such statements are backed up neither with arguments nor statistics,” protests Tatyana Neshatayeva, a judge with the Superior Court of Arbitration.

“Our courts have been hearing cases involving foreign nationals for 11 years now, up to 2,000 a year.” She said that despite the absence of bilateral agreements, Russian courts implemented the rulings of foreign courts in favor of Yukos shareholders.

“Of late, the Russian arbitration system has been functioning very consistently. And they have been removing any unclear points that might provoke abuses, both on the part of business and judges,” she said.

Big corporations themselves have helped cultivate disrespect for the national judicial system, said Alexander Shmakov, a partner with the law firm Russkiye Eksperty.

“In their day, they corrupted the courts, making them tools in their corporate wars,” he said. “As a result, there is now massive contempt for our judiciary. British law is the guarantee of transactional fairness now, and a village court in Cyprus now enjoys more trust.” 

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