Constitutional Court Denies Duty Fee Exemption to Military Academy

The Constitutional Court of the Russian Federation has determined that state and municipal institutions cannot be exempt from paying state duty when participating in arbitration disputes. This position was formulated during the consideration of a complaint from the S.M. Kirov Military Medical Academy (VMA).

The reason for the court appeal was a dispute between the academy and a private contractor. VMA, acting as the customer under a state contract for the supply of medical products for participants of the special military operation, sought to recover a penalty of 5.1 million rubles (approximately $51,000) from the company that violated the terms. The Arbitration Court of St. Petersburg and the Leningrad Region, and then the district court, denied the claim. The academy was also ordered to pay 50,000 rubles (about $500) in state duty for filing a cassation appeal.

Lawyers for the Military Medical Academy insisted on exemption from this payment, citing the Tax Code. They argued that the academy, as an institution of the Ministry of Defense, is equivalent to state bodies for which corresponding benefits are provided.

The Constitutional Court rejected this argument. In the ruling published on 26 January, it stated that the Tax Code “under no circumstances implies exemption from paying state duty for any state or municipal institutions.” The judges emphasized that by concluding a state contract for supply, VMA acted as an economic entity in civil legal relations, and not as a state authority function, even if the supplies were intended for the needs of the special military operation.

According to the Constitutional Court, the disputed tax regulations ensure equality of parties in the arbitration process and “do not contain uncertainty in access to the court.” Thus, the academy«s right to judicial protection was not violated.

The decision was made against the backdrop of a significant increase in state duty rates, which occurred in September 2024. For example, the fee for filing cassation appeals to arbitration increased almost 17-fold. According to data for the first half of 2025, exemption from duty was granted to applicants in 204.9 thousand cases, which accounts for 27% of the total number of cases considered by arbitration courts.