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  • Writer's pictureThe Paladins

Russian Legal English as a form of cryptology

The phrase “Russian legal English” might sound like an oxymoron: Russia has no rule of law to speak of and anyway Russian law is written in Russian, not in English. In fact both these suppositions turn out to be false, because in fact Russia has an extremely sophisticated and voluminous even if it is also a very bad system of law. Moreover it turns out that the greater majority of important Russian legal documents are in fact written in English, and they have developed their own system of expressions and phrases that appear to have the same meaning as words and phrases in the English legal vocabulary but in fact they often mean something rather different. The reason important or senior Russians use English, by the way, and also employ English court jurisdiction or arbitration clauses in their contracts, is because the Russian courts are so diabolical. They are not diabolically bad in the sense of shambolic or disorganised; rather they are bad in quite the opposite way: in efficiently and systematically undertaking the miscellaneous ruthless dictates of the President of Russia and those close to him the names of very few of which are public.

Hence Russian legal English developed out of a desire on the part of Russians to have recourse to dispute resolution mechanisms that they perceived as fair and that would gladly take their cases. The English courts are obliging in the sense that they will accept cases from all over the world without any connection with England - if the parties ask them to do so. They are widely perceived across the world as fair, indeed possibly the fairest courts in the world, willing to dispense justice without fear or fervour or political influence and bias being pertinent to their decision-making. The legal professions in England are also in general held in high regard for their integrity, honesty and apolitical devotion to a client’s cause - if rather expensive, but Russians like expensive things. Hence a whole branch of Russian legal English developed to cater for the fact that the Russians are (or at least were) the biggest users of the senior English courts and arbitration tribunals in the world. Russian legal English was also influenced by the language of corporate finance law, a common parlance between London and New York, being the language used in the complex legal documentation that records the world’s principal mergers, acquisitions, stock market listings, private equity deals, and so on and so forth. That is in large part because in the 1990’s, a lot of English and US corporate law firms established presences in Moscow in order to cater for the demand for loan financing and other financial arrangements into Russia. Virtually all of those deals went sour with the Russian banking crisis of 1998 and subsequent events. Nevertheless this is approximately the process of amalgamation by which a language we shall call Russian Legal English evolved.

Russian legal English was always a cypher. Its initial purpose was to dress up in the language of legitimate corporate finance deals the murky and corrupt exercise of “de-nationalisation” of Soviet industrial and infrastructure assets into ostensibly privately owned companies with widely held share bases. In practice things did not turn out like that, as the process of privatisation was ineptly managed and Russia’s principal infrastructure and other assets ended up being owned by conglomerates each with a single shareholder. These people became known as the “oligarchs”, and they stole Russia’s natural industrial and hydrocarbon wealth by borrowing money from western banks ostensibly pledged against these assets which they then stole and left Russia’s domestic banks liable for debts they could not pay to the west. This was the origin of the 1998 Russian banking crisis and indeed in the rise of Russian President Vladimir Putin, who was both appointed by the nomenklatura (Russia’s class of internal security and intelligence professions that had dominated power during the Soviet era) as well as being elected in a popular vote. His mandate was to clean up the mess left by the Oligarchs, something he is still doing to this day, and his principal tool was always, and ever increasingly has been, the sword.

With this historical digression in mind, we now come to consider the tenets of Russian legal English as a form of cryptology. As with any form of cryptology, the background context of the communicating parties is essential to understand what they are trying to say to one another with the tools they are using. The common themes in Russian politics and life about which people are wanton to speak in ciphers can be summarised in the following approximate list:

  1. Murder by the state for transgressions against known dictates.

  2. Indefinite incarceration in miserable conditions as an alternative lesser punishment, often in remote prison colonies but also in psychiatric hospitals (general hospitals are places where one is more likely to be murdered than to be locked away indefinitely, so they fall into category 1 above).

  3. Sexual impropriety, including sex with other people’s husbands and wives, etcetera; homosexuality; domestic violence, and other similar dark themes.

  4. Mysterious activities of Russian security and intelligence services.

  5. Corruption and theft from the state (it being understood that all assets in Russia are really owned by one person, namely the President of Russia).

All in all, the list of subjects in respect of which Russians use ciphers, including Russian legal English, is a pretty miserable one. Therefore Russian legal English should be assumed to be sinister in its meaning or intent: as a general rule, something very bad is going to happen. It is often a warning of some kind, or a statement of some rather bleak facts such as that someone has been murdered. Or it may be a statement of intent to murder somebody either unconditionally or if certain conditions apply. However it can be used by the intelligent non-Russian cryptologist to express happier themes, which is one of its interesting features. It can be as obscure or overt as you like. A lot of Russian legal English isn’t really intended to keep the actual message from the third party reader at all, but to make it all too clear what is really meant. It can also conceal hidden meanings if the communicants have a commonly understood private dictionary.

We should also mention something about the profession of being a lawyer, at least in Moscow at the senior levels. Being a Moscow lawyer is rather a sinister profession, related somehow to the Russian security and intelligence services and they act as a sort of regulator of their clients by Russian intelligence from whom they are permitted to steal as their fee for doing so. Therefore they are rather the opposite of an English lawyer, in the sense that their job is not to help their client achieve his goals but rather to hinder him from doing so in the name of Russian intelligence and ultimately at the instance of the Russian President; and to take such money as they see fit from their Oligarch clients as their fees for undertaking Russian government activities. The international law firms with Moscow offices have mostly now closed, particularly in the last few years as Russian hostilities towards Ukraine boiled over for a variety of reasons outside the scope of this essay. However when they were at their hight their Moscow offices were a peculiar amalgam of international corporate finance lawyers undertaking western-style corporate legal work, and Russian lawyers serving as agents of the FSB, Russia’s principal internal security service, disciplining the various Oligarch clients. This made the legal documents emerging from the Russian Federation in the first decade of the twenty-first century in particular very peculiar indeed.

Let us now give a concrete example of a Russian legal English cipher. Everyone in Russian corporate law knows what a “Russian roulette” clause means but we will explain it for the sake of clarity. People in Russia do not like sharing power, because they perceive that it creates squabbles and conflicts and they are right. Russians are notoriously litigious. They far prefer an environment, whether in business or in politics, in which a single person is in charge (in business, often called “the Shareholder”) and he (for they virtually always are men) makes all the decisions. That is precisely why the Russian President likes to force the Oligarchs to work together - to divide and conquer - and we call this strategy “joint venture agreements”. A joint venture agreement is not what we in the West might consider it to be. It is not a mutually realised agreement to cooperate to increase net utility. Instead it is an entirely disagreeable arrangement imposed upon the Oligarchs by the Russian President or his inner circle, to discipline them and weaken them by causing them to fight with one-another. And every Russian joint venture agreement has an exit clause for the parties. It is called a Russian roulette clause, and it is very bad indeed for more than one reason as the reader can probably anticipate just from the name.

A typical Russian roulette clause might read as follows (this is the author’s own drafting, not taken from any specific agreement; they can be incredibly long and complicated but they all boil down to the same thing):

Article XX. Exit from joint venture

If either Party A or Party B desires to leave the Joint Venture as herein above defined, then the party so desiring (the “Serving Party”) shall deliver by registered mail a letter to the other Party (“the Receiving Party”) containing an original signature of an authorised officer of the Serving Party and shall be received against an original signature of an authorised officer of the Receiving Party (“the Notice”). The Notice shall prescribe a price at which all the shares in the Joint Venture Entity are to be purchased. The Receiving Party shall then, within seven days of receipt of the Notice, serve upon the Serving Party by registered mail a letter to the Serving Party containing an original signature of an authorised officer of the Receiving Party stating whether the Receiving Party elects to buy the Sending Party’s shares in the Joint Venture Entity at the price stated in the Notice or elects to sell the Receiving Party’s shares in the Joint Venture Entity at the price stated in the Notice (“the Counter-Notice”). The Counter-Notice shall be received by an authorised officer of the Serving Party with an original signature.

Whatever else you may say about Russian lawyers, never let it be said that they are stupid. Whatever this clause means, it is obviously a horror. If anyone tried to exit a joint venture agreement using such a mechanism there would be endless litigation (which Russians do enjoy). But more fundamentally it is an outrageously dangerous way of trying to leave a joint venture agreement by reason of the legal uncertainty involved: you can’t guess what your counterpart is going to do, and therefore you cannot serve any such notice (unless you intentionally make it faulty or compliance with form highly borderline, a game that many Russian lawyers like to play with these clauses) and therefore you cannot exit the joint venture agreement.

The other way of reading a Russian roulette clause is of course much more simple: if either of you try to leave this agreement, someone is going to be murdered. Russian roulette is of course the “game” of holding a partially loaded revolver to one’s head after spinning the bullet chamber at random, and then pulling the trigger. In drafting a Russian roulette clause for your joint venture agreement you are using Russian legal English to make everything look ostensibly legitimate (there is after all a theoretical argument that this is a sensible way to exit a joint venture agreement) and yet everything is really obviously extremely sinister and there is something extremely wrong with everything that is going on.

And just to emphasise the point, the Joint Venture Entity is typically a BVI shell company with no assets. So the idea of stating a value for the shares is quite preposterous. The Parties will typically also be BVI shell companies with no assets. The entire document is just a shadow cipher for the balance of power between certain people alluded to by incomprehensibly named BVI companies. (It is not just the BVI that is used but the BVI has always been the most popular jurisdiction for this sort of thing.) The companies may have names comprised of two words in English that make no sense together, for example (and these are this author’s own creations) Fieldair Limited or Shortwield Limited. These names are almost invariably completely meaningless but they sound just as though they might possibly be genuine company names. There has also been a habit of using strange numbers as the names of companies, e.g. 19256426 Limited, although this is less common. Generally, strings of apparently arbitrary numbers are very bad things in Russian legal English. Whatever they refer to is probably something to do with one of the above captioned topics.

Which brings us to a list of interesting Russian ciphers. None of these are really secret or disputed; they are just some of the most obvious ones that everyone knows. This list does not even remotely attempt to be complete; that would require an entire book and as far as this author is aware none has actually been written. But here are a few.

  1. Miscellaneous strings of numbers: numbers of prisoners, hospital or mental hospital patients, bank account numbers that should not exist, etcetera.

  2. Investigations: some sort of Russian intelligence related procedure of an extremely opaque kind.

  3. Procedures: something without a procedure.

  4. References to obscure pieces of Russian legislation. These are often very clever, in that the reference to the Russian legislation in question will appear genuine (Russian legislation tends to be inordinately long and to have the prima facie appearance of establishing a legitimate set of institutions, but its real purpose is to obscure the actual procedures and operations of the Russian government) but really it is a reference to something sinister if you look at the text of the legislation and think what it might mean if you are completely paranoid and assume that everything written is in bad faith.

  5. Complex law and jurisdiction clauses are often references to places. Where one finds law and jurisdiction clauses, they may be absolutely legitimate or they may be ciphers for something else or they may be both. Some of them can be ludicrously convoluted (for example - again the author’s own - “the aspects of formal validity of this Agreement shall be governed by Russian law, and aspects of the material validity of this Agreement shall be governed by English law”) may indicate something entirely opaque to the external reader. These sorts of clauses have also been the origin of copious quantities of expensive litigation, much to the financial benefit but intellectual bafflement of the English legal classes. (“Why on earth did they choose such a choice of law clause?”. The answer is that nobody has the slightest idea except the parties who drafted it.)

  6. In some cases this author suspects that impossibly complex law and jurisdiction clauses are another form of Russian roulette clause: in other words, someone is explaining to the parties that they cannot get out of the deal because if they try they will just spend years litigating over law and forum and getting nowhere. However it is really not clear.

  7. References to things like administrative fees is sometimes a reference to illicit payments of some kind or other, for example corrupt payments, kickbacks, and other financial arrangements of an obscure kind and for an obscure purpose. Each case depends upon the context. Some of them are obvious; a reference to “no administrative fees” might be a reference to a favour or a favour being returned or it might be a reference to the Russian government doing its job properly. You have to understand the context of each clause.

  8. Somewhere in complex Russian legal agreements there will typically be a list of things that the President or his inner circle expect people to do. This might be a list of joint venture obligations or something of this kind. This list is usually carefully drafted (actually all these agreements and documents tend to be very carefully drafted) and it is usually very important.

  9. Russian agreements like to be long so that they can be confusing. Therefore expect them to be replete with long-winded boilerplate clauses, many of which will be meaningless but some of which might have meaning. Recall that one goal of Russian legal English is to confuse - possibly to confuse everyone, and leave everything in a permanent state of tension so that everyone knows who is really in charge.

So Russian legal English turns out to be really rather interesting. Interpreting what is really going on from the thousands of pages of legal documents that Russian businesses tend to churn out is quite an art and it can only be learned from experience, because nobody is actually going to tell you any of these things or what is really going on. Indeed lots of people participating in the process of drafting may not even know themselves. Which makes the entire process rather humorous or ironic. Because what often emerges is really a truly incomprehensible document as all sorts of hidden voices or levers have taken their turns in contributing in one or more obscure ways to the drafting; messages get lost and confused; the lawyers (western or Russian) do not know how to reconcile the competing interests; and then you get a mess. Which was probably the purpose all along: to hamstring everyone so that everyone understands who is really in charge.

It is usually highly valuable when studying documents written in Russian legal English to study with great care the stamps. Russians love documents with stamps on them): are they real? (Anyone can make a company stamp in a local shop in virtually any town in the world, so why are they so obsessed with stamps? If they are fake, or the company does not exist (this is quite common), then what is this supposed to indicate? Did the company ever exist? If not, it is probably supposed to indicate that something is bogus or a sham but it might be used to indicate that the powers involved are so senior that they don’t need to be bothered even with company incorporation. This author once saw a case called A_______ Ltd v B_______ Ltd and C_______ Ltd with no identification of the companies’ jurisdictions, corporate numbers or anything else. He declined to act in this matter because it seemed just too peculiar and what it was really about he has no idea and can barely even guess. Also study the directors of these companies. Are they real people? Are they dead people? Did they ever exist? The signatures may be fake. Facsimiles are used but facsimile signatures are not necessarily unlawful - for example if the facsimile is used with the signatory’s express or implied permission. Signatures that are not facsimiles probably reveal something very significant. And on it goes.

Finally, those who understand the curious cryptological properties of Russian legal English can turn it round to create their own communicant-specific meanings. Procedures can become acts of love, and similar. Mysterious numbers can express union and bonding. Administrative fees can be encrypted references to legitimate payments for desirable purposes. And so on and so forth. We like Russian legal English. What about you?

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