1. The Proposal for a Legal Ombudsman.
In order to effectively combat corruption in Ukrainian courts and administrative agencies, and more quickly develop the rule of law in Ukraine, the British Ukrainian Chamber of Commerce ("BUCC") proposesthe creation of a Legal Ombudsman for Ukraine, whowould be appointed by the Board of a Non-Governmental Organization ("NGO") created by Ukraine's leading chambers of commerce and business associations. (Possibly, the Legal Ombudsman's appointment could also be ratified by Parliament, and the Ombudsman could also have certain special statutory powers, as suggested below.) This Legal Ombudsman could serve as an autonomous unit of a leading Ukrainian legal studies institution, like the V. M. Koretsky Institute of State and Law that is the principal independent legal adviser for the Ukrainian Parliament.
2. The Need for Such an Independent Legal Authority to Review Judicial and Administrative Action for Abuses of Justice.
Based on the unsatisfactory experience of many foreignand domestic investors before Ukrainian courtsand administrative agencies, and the numerous resulting claims by these investors for gross abuses of justice, the BUCC has concluded that the creation of such a Legal Ombudsman is presently necessary in order to respond in a timely manner to such abuses and there by improve the rule of law in Ukraine. This proposal addresses, in particular, the virtually total absence oftimely and effective independent review of Ukrainian judicial and administrative action.
While some abused investors have successfully prevailed in disputes over such abuses of justice by Ukrainian courts, most recently in several bi-literal investment treaty arbitrations that have attracted attention because the abused parties received multi-million dollar awards, these cases are expensive and take many years. For foreign investors from countries having bi-lateral investment treaties with Ukraine, typically two to three years are necessary to run the required full appeals process in the Ukrainian courts, and then, assuming that the abuse is not remedied, another two to four years is required to prevail in an arbitration under the applicable bi-lateral investment treaty, for a total of up to seven years. By the time justice is served, the judges and officials involved have usually moved on to other jobs, and the effects of the abuse cannot beundone, so the only remedy is damages.
Domestic investors, and investors from countries without bi-lateral investment treaties with Ukraine, are in a much worse position, as they have no outside independent arbitration tribunal to appeal to. As a practical matter,this often leaves such investors in Ukraine without any effective protection against abuses of justice.
3. How the Legal Ombudsman Will Function.
The proposed Legal Ombudsman should function much like an independent arbitrator in a bi-lateral arbitration tribunal, but with a more pro-active roleto collect evidence in order to hear claims and render opinions on abuses in months rather than years, so asto protect investors from losing their businesses, property and other rights while this is still possible, as wellas to evaluate damage claims. For practical reasons, presently in the after math of so many widely publicized problems in the Ukrainian legal system, the proposed Legal Ombudsman should initially be an eminent jurist who is foreign and therefore independent of local Ukrainian pressures. There are many respected foreign judges and lawyers, with a sufficient knowledge of Ukrainian law (and ability to read and speak Ukrainian), who are eminently qualified to fill this position.
The principal role of this Legal Ombudsman will beto timely provide a source of authoritative legal opinionson claims of abuse of justice that can then be recognized and implemented by the Ukrainian Presidentand Presidential Administration, the Governmentand the Parliament to secure remedies for the identified abuses.
Such independent review, effectively supervising judicial and administrative behaviour, should provide a legal basis for corrective action.
The establishment of such a Legal Ombudsman for Ukraine should have the same impact as the Swedish Parliamentary Ombudsman (the original Ombudsmanand still the leading model for the World), the creation of which to address corruption and abuses of justice turned Sweden from being a country with acorruption problem in the early 1900s into one of the world’s least corrupt countries.
Thus, the creation of the Legal Ombudsman could address the problem that often arises for the Ukrainian President and Presidential Administration, the Government and the Parliament, which generally do not act as legal experts, when claimsof legal abuse are brought to them without the benefit of a legal review by an authoritative independentlegal expert body. They are, in essence, asked to side with a claim on an abuse of justice by a particular person or his, her or its lawyer, or the claimant’s ambassador, chamber, business association or someother non-legal authority (like the EBRD’s “Business Ombudsman”, who is not a lawyer), against the legal decisions of the judicial branch of the State of Ukraine, which decisions non-lawyers cannot ordinary evaluateas a matter of law. Under the proposal made above, the President, Government and Parliament will be able to act based on authoritative legal opinions that are rendered independent of the claimant. Likewise, such legal opinions of the Legal Ombudsman, to the extent that they validate and verify legal claims, will there by also provide ambassadors, the Business Ombudsman, chambers, business associations and others with avalid legal basis to support remedies for the confirmed abuses of justice.
4. Implementation of the Opinions of the Legal Ombudsman.
Thus, on the basis of opinions of the Legal Ombudsman, the Ukrainian President, Government and Parliament should be able legally to deal with abuses of justice that are properly so analysed and recognised. The Legal Ombudsman’s authority should be largely based on respect for the quality of the legal analysis of his or her opinions, which should easily be recognised by all involved as being superior to that of the identified abusive decisions, as is usually the case for the Swedish Ombudsman. With the existence of such public authoritative review of their behaviour, Ukrainian courts and administrative officials should thereafter feel obliged carefully to respect applicable law in rendering their decisions.
Such implementation of the opinions of the Legal Ombudsman should, therefore, ideally be consensual, working with the President, Government and Parliament – and not necessarily based on some formal mechanism, so that, in effect, the Legal Ombudsmanis not just another court created on top of the judicial system. In practice, the Swedish Ombudsman is always an eminent former judge or lawyer capable of legal work of the highest quality and integrity, and hisor her legal decisions on abuses of law and other legal matters are ordinarily respected voluntarily, without the need for formal enforcement proceedings.
In addition, the threat of the possible impeachment of judges who are found to have committed gross abuses of justice is a measure that could potentially be used to encourage respect for the Legal Ombudsman’s legal opinions on such abuses. Under Article 126 of the Ukrainian Constitution, judges can be impeached by Parliament, inter alia, for violating their oath of office, under which oath a judge swears that heor she shall “objectively, impersonally, impartially, independently and fairly administer justice, complying only with the law, to honestly and faithfully perform the duties of a judge”. Parliament could therefore impeach judges based on abuses of justice identified by the Legal Ombudsman. As Parliament establishes the procedure for impeachment proceedings, it could also provide the Legal Ombudsman with the right to petition Parliament to initiate such impeachment of any judge whose decisions the Legal Ombudsman find sevidence a violation of his or her oath of office.
It should also be noted that, if an opinion of the Legal Ombudsman is not implemented to protect a foreign investor from a bi-literal investment treaty state froman abuse of justice, then this fact should, as a practical matter, greatly strengthen the case of the investorin any subsequent bi-lateral investment treaty arbitration.
This, by itself, should justify the Ukrainian Presidential Administration, Government and Parliament acting to remedy such identified abuses of justice.
However, if despite such mechanisms, it proves necessary to do more to implement the Legal Ombudsman’s legal opinions, then the Ukrainian Legal Ombudsman might also be given some statutory enforcement rights and powers, such as exist for the Swedish Ombudsman, for example to initiate proceedings to legally enforce the Legal Ombudsman’s legal opinions, as well as the formal power, suggested above, to bring petitions to Parliament to initiate impeachment proceedings. For this, Ukraine could consider also moving to Parliamentary ratification of the selection of the Legal Ombudsman by the NGO, as an additional foundation for providing the Legal Ombudsman with such formal statutory powers.
5. Conclusion.
The proposed Ukrainian Legal Ombudsman should greatly facilitate Ukraine’s fight against corruption in order to help Ukraine make a quick transition to the highest world standards, as Sweden did years ago. We would also recommend tocombine this with paying Ukrainian judges and administrative officials much higher salaries commensurate with the importance of their responsibilities.
International financial institutions and aid agencies, to make a genuine and rapid impact to actually combat corruption in Ukraine, should help fund such measures while Ukraine is not financially in a position easily to do so.
One important benefit of this proposal for the Ukrainian economy is that such a Legal Ombudsman should give investors, especially foreign investors, much greater confidence that they caninvest in Ukraine and be protected from corruptionand abuses of justice by courts and officials. Ukraine urgently needs to so encourage investmentto develop the Ukrainian economy.
– British Ukraininan Chamber of Commerce
