DECISION OF ECONOMIC COURT OF COMMONWEALTH OF INDEPENDENT STATES

of June 27, 2000 No. 01-1/1-2000

About restriction of the privileges and immunities provided to MTRK "World" when implementing the business activity which is not connected with professional functions

Economic Court of the Commonwealth of Independent States in structure:

the chairman - the Chairman of Economic Court Kazhenov A. B.,

judges of Economic Court: Vylkov I., Zhoroyev K., Kerimbayeva A. Sh., Makhmudova L. Sh., Miroshnik V. I., Sarsenbayeva A. O., Simonyana G. V., Tolibova X.,

in case of the court clerk Medvedeva T. E.,

with participation of the General adviser of Economic Court Pronina M. G., representatives of Mir Intergovernmental TV & Radio Company (MTRK "World") of the consultant for legal issues MTRK "World" Sukhanov M. E. and legal adviser of National representation of MTRK "World" in the Republic of Belarus Shulyakovskaya N. V.,

having considered case on request of Mir Intergovernmental TV & Radio Company on interpretation in proceeding in open court, established:

The Mir Intergovernmental TV & Radio Company appealed to Economic Court of the Commonwealth of Independent States with request about interpretation of provisions of preamble and articles 2-5, 10 of the Agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993 regarding whether MTRK "World" specified in the Agreement of guarantee as the international organization taking into account the purposes of its creation are provided. In reasons for request of MTRK "World" specified that it is the interstate organization allocated with complex of the privileges and privileges commonly accepted for such organizations, however, due to the lack in the legislation of the Russian Federation of the regulations regulating activities of the international joint-stock companies, MTRK "World" was registered as regular joint-stock company in Registration chamber under City government of Moscow. This circumstance led to the fact that MTRK "World" and its branches founded in the State Parties are considered as residents of these states that creates essential difficulties in the organization of activities of the Company as whole on accomplishment of its authorized tasks. For example, the currency restrictions set by the national legal system of the states for residents make impossible: free acquisition by the Company and its national branches of currency of other State Parties; movement of financial resources on the consolidated account of the Company or in branches; payment from the consolidated account of the acquired import equipment for project implementation of the multipurpose telebroadcasting satellite World system for the State Parties of the Commonwealth of Independent States.

Having heard the judge-speaker Kerimbayeva A. Sh., representative of MTRK "World" Sukhanov M. E., having discussed the conclusions of the leading researcher of Institute of the state and the right of the Russian Academy of Sciences, the doctor of jurisprudence, professor Velyaminov G. M., the senior consultant Sektor of private international law of the Supreme Arbitration Court of the Russian Federation Sharamova G. I., the General adviser of Economic Court, the doctor of jurisprudence, professor Pronina M. G., having studied the materials which are available in case, the Economic Court came to the following conclusions.

The agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993 is signed by the Azerbaijan Republic, the Republic of Armenia, the Republic of Belarus, Georgia, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, the Republic of Tajikistan, the Republic of Uzbekistan. The Republic of Moldova joined the Agreement on September 20, 1996. The agreement became effective concerning all states which signed it except for of Georgia in the territory of which it is applied temporarily. The specified states are also founders of MTRK "World".

According to the Agreement of December 24, 1993 the Company, its property and assets use immunity from administrative and judicial intervention and executive actions (Article 3); archives and documents of the Company, and also its room are inviolable (Article 4); the corporate property is not subject to search, requisition, confiscation and withdrawal administratively (Article 5); The Company, its property are exempted from the direct taxes and charges of any nature, from customs fees and restrictions when importing and exporting objects, held for use for the purpose of, MTRK "World" provided by the Charter (Article 6); privileges and immunities are provided also to representatives of the states (governments) in the Company to accomplishment of official functions by them, and also to the officials who are not citizens of the state of stay of the Company (Articles 7, 9).

The analysis of the Agreement and, in particular, the specified Articles, shows that the State Parties provided to Mir Intergovernmental TV & Radio Company of the privilege and the immunities having international legal character which mode is settled at the universal level by the Vienna convention on the diplomatic intercourses of April 18, 1961.

In this case privileges and immunities are provided by the states on contractual basis and as appears from the Agreement preamble, have functional nature as are designed to create international legal guarantees of free and independent implementation of professional activity of MTRK "World" in the territories of the State Parties as the interstate organization. For explanation of sense of the concept "interstate organization" used in the Agreement the Economic Court addressed the analysis of all set of constituent documents MTRK "World", considering that only in their general context the status of the Company, feature of its organization, the main authorized objectives and the carried-out functions can be determined.

In preamble of the Agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993 the State Parties confirmed the commitment to the conventional principles of the international exchange of information and announced the purpose creation of general information space. In constituent documents MTRK "World"; The agreement on creation of Intergovernmental TV & Radio Company of October 9, 1992; The Foundation agreement about the creation of Intergovernmental TV & Radio Company of February 12, 1993 signed by plenipotentiaries of the governments of the founder states; The Charter of Intergovernmental TV & Radio Company approved on January 22, 1993 by the Solution of heads of governments of the State Parties of the Agreement mentioned above; new edition of the Charter of the Mir Intergovernmental TV & Radio Company approved by the Decision of general shareholder meeting of September 5, 1997 as main objective of activities of MTRK "World" the State Parties specified need of unbiased and impartial interpretation of social and political, economic and cultural life of the states and their international backgrounds, ensuring broad information and cultural exchange between the states, provisions to the population of opportunities of wide choice of TV and radio programs.

Fixed in the called documents the purpose is answered the main idea of the Concept of the Intergovernmental TV & Radio Company signed by plenipotentiaries of the founder states on July 29, 1992, the idea of priority of human rights and freedoms, recognitions by their universal criterion for evaluation of any other aspirations and actions.

At the same time program and broadcasting policy of MTRK "World" is oriented to satisfaction of information requirements and spiritual needs of mass audience - the people living in the territories of the founder states.

Achievement of effective objectives of MTRK "World" provides by means of the production financed by the founder states and distribution of television and radio programs in the territory of the states, allocation of broadcasting time for the official information provided by representatives on that representatives of the states.

At the same time the Charter provides different Company of services in the field of broadcasting, communication, exchange of information, and also services in rendering assistance of the founder states to the national state teleradio organizations in development of their material and technical resources on contractual, paid basis. The charter does not determine profit earning as main objective of the Company, but resolves maintaining the business activity which is not prohibited by the law, distribution between founders of the got profit by it.

Thus, the analysis of constituent documents MTRK "World" shows that the main objective of creation and activities of the Company has humanitarian character which means of achievement is its professional activity on production and distribution of television and radio programs in the territory of the founder states. These activities are financed by the states. Besides, according to the Decision of Council of Heads of Government of the Commonwealth of Independent States on payment terms of work of staff of Mir Intergovernmental TV & Radio Company of January 25, 2000 compensation of staff of the Company is made at the expense of means of budgets of the states.

The economic Court considers that the business activity performed by the Company on rendering services in the field of broadcasting, communication, the exchange of information and other such services provided by the Charter has professional character and serves achievement of the common humanitarian goal. The business activity of the Company which is not connected with professional functions and permitted by the Charter has auxiliary nature.

The documents submitted at the request of Economic Court - the act of Department of the state financial control and audit of the Ministry of Finance of the Russian Federation, the conclusion of auditing firm and others, demonstrate that income from implementation of paid professional activity, and also from commercial transactions gained by MTRK "World" goes the Company for development financing and ensuring operability of the Company and enhancement of the multipurpose telebroadcasting satellite World system for the State Parties of the Commonwealth according to the Decision of Council of Heads of Government of the Commonwealth of Independent States of September 9, 1994, implementation of the cultural projects permitted by constituent documents and also for additional payment of staff of the Company for the purpose of maintenance at the certain professional level of personnel structure.

At the same time the Economic Court notes that unreasonable expansion of amount of the business activity which is not connected with professional functions of the Company can serve for the State Parties of the Agreement of December 24, 1993 as the basis to restriction with them of the privileges and immunities provided to the Company.

Also the fact that management and control of its activities are exercised by the representatives appointed by the governments of the states, and that the Interstate coordination council exercising general control of activities of the Company representatives of the states enter belongs to features of MTRK "World".

Proceeding from the fact that MTRK "World" is founded by the states by them it is controlled and the main authorized objectives of activities of the Company have the international humanitarian character, the Economic Court came to conclusion that the Mir Intergovernmental TV & Radio Company is specialized structure of the Commonwealth of Independent States the international legal entity whose status is determined by the constituent documents having the international character.

The status of MTRK "World" as legal entity has no collateral, auxiliary character as it takes place in the international organizations of humanitarian type, and serves as means for realization of the professional international activity having humanitarian focus. International nature of MTRK "World" also caused provision by it of international legal guarantees, privileges and immunities for ensuring free and independent implementation of activities.

That circumstance that general control of activities of MTRK "World" is exercised by representatives of the states, and also the fact that it is created for satisfaction of general interest of the founder states excludes possibility of control of the Company from any certain state. Meanwhile, subordination of the Company to the national right of any state can be considered as kind of such control.

MTRK "World" according to its humanitarian purpose is allocated also with the certain international legal competences designated in the Agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993. So, Item 2 of article 13 of this Agreement determines that "Nothing in this agreement interferes with the conclusion between the certain states and the Company of the protocols concretizing application of this agreement in the territories of such State Parties". Practice, however, goes on the way of use not of form of protocols, and agreements between the State Parties and Company. This circumstance does not involve legal effects as agreements and protocols are one of forms of the international treaty.

The company charter grants it the right to perform cooperation with the international and foreign broadcasting organizations. This right is exercised by the Company in case of agreement signature about cooperation concerning education, science and culture between the United Nations and Mir Intergovernmental TV & Radio Company of November 5, 1997.

Follows from the above that is right on the basis of which it is created and MTRK "World" is effective, is international in character which, according to Economic Court, cannot be the territorial right of the location of the headquarters of MTRK "World" as international legal entity. Thus the issue of application of the national legal system of any state concerning the legal entity of the international organization - the United Nations is resolved. According to the legal conclusion of United Nations secretariat neither the Articles of organization of the United Nations, nor in procedural rules of its bodies, nor in international treaties contain the regulation specifying the specific system of law applied to private transactions of the UN. In the same document Secretariat recommends to all organizations of the UN system to sign civil agreements on the basis of internal regulations of intergovernmental organizations.

It is also necessary to consider that in the modern international relations the tendency of expansion of business activity of specialized intergovernmental organizations was planned. The right to perform operational and economic, commercial functions allocates, in particular, such organizations as Committee on seabed, the International organization of satellite communication "INTELSAT", the European organization of satellite communication "EVTELSAT".

Stated above allows to draw conclusion that, despite the known complexity of differentiation humanitarian (public) and private-law (production and commercial) also its creation in such form of business as private company is more whole than professional activity of MTRK "World", does not mean that MTRK "World" as the international legal entity is lost by opportunity to have the privileges and immunities provided to it in contractual procedure. These privileges and immunities limited to framework of the multilateral agreement of December 24, 1993 shall be fixed and can be concretized in regulations of the bilateral agreements (protocols) signed between MTRK "World" and the governments of the State Parties of the Company about conditions of its stay and activities in the territory of these states. At the same time the states have no right to reduce the level of the privileges and immunities provided by the multilateral interstate Agreement of December 24, 1993, owing to action of the principle of "Pacta sunt servanda" "Agreements shall be performed".

The agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993 fixes provision (Item 1 of Article 2) according to which the State Parties of the Agreement provide to the Company and its officials in the territories such privileges and immunities which are necessary for ensuring activities of the Company according to its authorized tasks. Thus, the states which signed the specified Agreement and being both founders, and shareholders of MTRK "World" owing to the provisions containing in it shall create international legal guarantees of free and independent implementation of professional activity of MTRK "World" in the territories of the State Parties. Providing the designated guarantees requires signing of protocols between MTRK "World" and the governments of the State Parties of the Agreement. The economic Court states that agreements on conditions of stay of national branches MTRK "World" with the Republic of Belarus (on August 15, 1995), by the Republic of Moldova (on February 14, 1996), the Kyrgyz Republic are for this purpose signed (on August 21, 1996). And in the Agreement signed by MTRK "World" with the Kyrgyz Republic application of the Agreement of December 24, 1993 significantly is concretized, in particular, it is provided "... the right of MTRK "World" to dispose without any limit of all received revenue in any currency", "... to freely perform any settlement credit operations" that answers the purposes of the Agreement of December 24, 1993 - to providing international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company as international legal entity.

Based on stated and being guided by Items 5 and 16 of the Regulations on Economic Court of the Commonwealth of Independent States and Items 143 and 148 of Regulations of Economic Court of the Commonwealth of Independent States, the Economic Court solved:

Give the following interpretation at the request of Mir Intergovernmental TV & Radio Company:

1. The concept "interstate organization" used in the Agreement on international legal guarantees of free and independent implementation of activities of Mir Intergovernmental TV & Radio Company of December 24, 1993 (in relation to MTRK) is understood as not the international organization of general type, and specialized structure of the Commonwealth Independent the Gosudarstvmezhdunarodny legal entity allocated with the amount of the international legal capacity determined in Item 2 of article 13 of the specified Agreement.

2. Goal achievement of ensuring free and independent implementation of professional activity of MTRK "World" assumes according to Item 1 of Article 2 and Item 2 of article 13 of the Agreement of December 24, 1993 the conclusion between MTRK "World" and each of the states of agreement parties in the territory of which the Company and its branches, the protocols (agreements) fixing and concretizing circle of the privileges and immunities provided to MTRK "World" as to the international legal entity which level cannot be lower established by the specified Agreement are effective.

3. When implementing MTRK "World" of the business activity which is not connected with professional functions, the State Parties of the Agreement of December 24, 1993 have the right to limit the privilege and immunity, the provided Companies and to its branches.

4. Collect from MTRK "World" for benefit of Economic Court of the Commonwealth of Independent States court costs in the amount of 24 500 rubles of the Russian Federation with transfer into account 3012200388026 in the Minsk city directorate of JSC Belbusinessbank of Minsk, code 764.

5. The copy of the decision to send to Mir Intergovernmental TV & Radio Company, the State Parties of the Commonwealth of Independent States.

6. The decision to publish in editions of the Commonwealth and mass media of the State Parties of the Agreement on the status of Economic Court of the Commonwealth of Independent States of July 6, 1992.

7. The decision is final and is not subject to appeal.

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