2009 was a difficult year for Russia: hard hit by the economic crisis; facing questions over election irregularities; and marked by several tragic deaths of human rights defenders and journalists. The arbitrarily-detained anti-corruption lawyer Sergei Magnitsky died in prison after being denied medical treatment, whilst Mikhail Khodorkovsky and Platon Lebedev defended themselves for the past 10 months in their absurd, second show trial. Former Soviet dissidents even went as far as saying that their work is more dangerous now than under Communism. These developments combined to cast a shadow over the past year.
A year and a half has elapsed since Dmitry Medvedev took over as President, yet in 2009 the new administration did not succeed in making real progress correcting the harmful habits and practices of the past. Uncertainty over the future path Russia is taking remains for investors inside and outside of Russia, and for the broader international community. While President Medvedev called for modernisation and a softening of foreign policy, Prime Minister Vladimir Putin continued to insist that the existing models function well and that an aggressive foreign policy is necessary. Hopes persist that President Medvedev will lead the country down a more progressive and prosperous path. For now, President Medvedev has yet to live up to the aspirations of Russia's civil society by implementing more bold and substantive reforms for the sake of Russia's economic and political stability. The old methods continue to hold back the country despite the desperate need for modernization.
ENERGY CHARTER TREATY RULING
In December, former Yukos majority shareholders won a crucial ruling that allows them to pursue a claim for up to $100 billion in damages from the Russian government for the unlawful takeover of Yukos. This will potentially be a high price for Russia to pay for a personal and political vendetta against Khodorkovsky and the company he successfully led for over five years. An international arbitral tribunal in the Hague ruled that Russia is in fact bound by its signature of the Energy Charter Treaty, despite the Russian parliament's subsequent failure to ratify. The decision clears the way for an independent review of the dispute over the takeover of Yukos, in which lawyers are expected to argue that the Russian government improperly bankrupted and expropriated the company through the pretext of unpaid back taxes.
The decision recognising that the Russian Federation is bound by its signature of the Energy Charter Treaty was welcomed by the US Helsinki Commission as an 'important step for Russia in promoting investor confidence, investment protection, corporate transparency and adherence to international treaties'.
Although Khodorkovsky is not pursuing any claim in the arbitration, shortly after the December decision was announced, Prime Minister Putin lashed out against the former head of Yukos, exposing the ongoing political motivations behind the persecution of Khodorkovsky.
RUSSIAN SUPREME COURT AGREES WITH ECHR ON ILLEGALITY OF LEBEDEV ARREST
In response to a ruling two years ago by the European Court of Human Rights finding Lebedev's rights were violated during his 2003 arrest and pretrial detention, this December Russia's Supreme Court agreed that Lebedev had indeed been treated illegally. Although the Supreme Court's ruling is not expected to impact the current trial, the decision opens the door to possible similar future claims to be considered.
LOOKING TO 2010
As an increasing number of legal decisions outside of Russia continue to undermine the credibility of the proceedings against Yukos, Khodorkovsky, Lebedev and many other individuals related to the Yukos Affair, 2010 will see intensified scrutiny of efforts to combat corruption in Russia.
President Medvedev's recent vow to overhaul the prison system in Russia, including a law against the jailing of tax crime suspects, will hopefully come into effect early in the new year.
The $98 billion complaint against Russia by former Yukos management, which was scheduled for January 14th, has been postponed once more and will now take place on March 4th due to the unavailability of both Russia's ad hoc judge, Andrei Bushev, and its representative government agent, Georgy Matyushkin.
While Khodorkovsky and Lebedev continue their struggle for the country's future prosperity and an end to "legal nihilism," reforms will not succeed without the full and effective backing of President Medvedev. By taking genuine steps to reform his country, President Medvedev could become one of Russia's greatest leaders and an important figure in world history. As we look ahead to 2010 and beyond, there is strong support both domestically and internationally for President Medvedev to close the book on the last decade and establish a new path for Russia.
