The Odessa File: Post Socialist Property Rights in English Courts

Published date01 September 1997
Date01 September 1997
AuthorEmily Haslam
The Odessa File: Post Socialist Property Rights in
English Courts
Emily Haslam*
Since the disintegration of the Soviet Union in 1991 property relations in former
Soviet states have been in a state of flux. This period of transition has raised
significant practical and theoretical questions concerning the nature of ownership,
because even before full privatisation many former state enterprises have been
reaping the benefits of greater economic independence. In The ‘Nazym Khikmet’
the Court of Appeal was called upon to analyse some of the effects of these
developments and was faced with socialist legal concepts that are without parallel
in English jurisprudence.
For the majority of the twentieth century state ownership of the means of
production and central planning of the economy were the ideological and economic
twin pillars of socialist states.
From 1923 in the territory of the former Soviet
Union state property was managed by various enterprises under the theory of
‘operative management’. According to Bregman and Lawrence, ‘[u]nder operative
management principles, the Soviet state assigns limited ownership rights to various
state organisations that produce goods and perform services. These assigned rights
include the possession, use and disposition of the property.’
These enterprises
were vested with legal personality and were charged with ensuring that state
property was used efficiently. State enterprises (not the treasury) were responsible
for the debts that their activities generated.
However, they remained subject to the
national economic plan and therefore they did not enjoy independence during the
socialist hegemony. State ownership raised problems for western businessmen who
were concerned about its effects on their security since, according to article 20 of
the Merchant Shipping Code of the Soviet Union, state owned ships could only be
arrested with the consent of the Council of Ministers. In practice, however,
business may often have been conducted in a way to allay such fears. It seems, for
example, that Soviet shipping companies often provided other security to avoid
disputes over in rem proceedings.
The Modern Law Review Limited 1997 (MLR 60:5, September). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA.710
* University of Wales, Aberystwyth.
My thanks go to Mr Ralph Evers of Messrs Clyde & Co. for kindly allowing me to use a transcript of the
first instance decision before the judgment was published, and to Robert Burrell and Richard Ireland of the
University of Wales, Aberystwyth.
1 [1996] 2 Lloyd’s L Rep, 362 (Sir Thomas Bingham, Evans LJ, and Thorpe LJ).
2 For example, articles 10 and 16 of the Constitution of the Union of Soviet Socialist Republics 1977,
translated in Butler, Basic Documents on the Soviet Legal System (USA: Oceana Press, 1991) 3. On
state ownership see Butler, ‘Marxian Concepts of Ownership in Soviet Law’ (1985) 23 Columbia
Journal of Transnational Law 281; Paul B. Stephan, ‘Perestroyka and Property: The Law of
Ownership in the Post-Socialist Soviet Union’ (1991) 39 American Journal of Comparative Law 35.
3 Bregman and Lawrence, ‘New Developments in Soviet Property Law’ (1990) 28 Columbia Journal of
Transnational Law’ 189, 191.
4 Hazard, ‘Gorbachev’s Attack on Stalin’s Etatisation of Ownership’ (1990) 28 Columbia Journal of
Transnational Law 207, 210.
5 Butler, ‘Marxian Concepts of Ownership in Soviet Law’ (1985) 23 Columbia Journal of
Transnational Law’ 281, 289.

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