Ukraine is facing a crisis over its constitutional court which analysts warn presents a watershed moment for President Volodymyr Zelensky.

In late October, the court issued a shock ruling that parts of Ukraine’s anti-corruption legislation were unconstitutional. The decision was a response to complaints by lawmakers from multi-millionaire Viktor Medvedchuk’s pro-Russian Opposition Platform for Life party, as well as deputies allied with oligarch Igor Kolomoisky.

The ruling meant that the National Agency on Corruption Prevention (NACP) would no longer be able to compel public officials to make annual asset declarations.

“If an official received a gift, and then, in gratitude, he made a decision in favor of that person, then such a decision is deemed to be made in a condition of a conflict of interests and must be canceled,” NACP head Alexander Novikov, explained. “However, by the ruling of the Constitutional Court, we cannot draw up a protocol on the violation and file a lawsuit to cancel such a decision.”

Historically, the quota system whereby the president, the parliament and a judicial union each appointed a third of the judges, meant that the court has never been seen as an independent body. Instead, it was assumed to be a tool of influence used by the president and the ruling party, with its decisions designed to benefit any incumbent government. 

Critics say that the court has sought to systematically undermine the anti-corruption institutions created at the request of Western donors following the Maidan revolution. Brussels has already warned that if anti-corruption processes collapse, liberalised visa requirements for Ukrainians may be suspended alongside financial assistance.

This could be very damaging for Zelensky, a staunch promotor of Ukraine’s European path.

Experts said it was significant that the court’s announcement came a few days after local elections in which the president’s party achieved disappointing results.

“The conflict between the president and the oligarch Kolomoisky was predetermined from the very beginning,” political analyst Galina Zelenko said. “However, Zelensky avoided him for a very long time - until the local elections, when the anti-Western elites saw his weakness and launched a counteroffensive.”

The president responded aggressively to the Constitutional Court ruling, presenting a draft law to parliament proposing to dismiss all its judges.

“The country will either be dragged into bloody chaos again or the state will again stop to exist as a system of transparent rules and arrangements,” Zelensky told lawmakers from his Servant of the People party as he called for them to back the legislation.  

However, his initiative was immediately met with harsh criticism. The Group of States against Corruption (GRECO) and the Venice Commission, the Council of Europe anti-corruption and rule of law institutions, called on Ukraine’s parliament to reject the law.

“The termination of the powers of judges is a gross violation of the constitution. Violation of the Constitution, even if for an undeniably good reason, cannot lead to a culture of constitutionalism and respect for the rule of law that fights corruption,” their statement read, adding that the Ukrainian authorities should “explore alternative ways”.

For its part, the opposition accused him of trying to take advantage of the crisis to completely reform the Constitutional Court so as to gain a loyal majority.

The Constitutional Court has other controversial cases pending, including recent legislation allowing for the sale of agricultural land, one of Zelensky’s main reforms. It also plans to review the law on the state language, an extremely sensitive issue for Ukraine, as well as that concerning the nationalisation of PrivatBank, previously owned by Kolomoisky.

“The cancellation of the latter would finally involve Ukraine in quarrel with its Western allies, as well as significantly widen the hole in the state budget, and in this situation, it will be almost impossible to raise money from anywhere,” economist Vasily Yurchyshyn warned.

A cross-party working parliamentary working group has been tasked with finding compromise solutions for new legislation.

One draft law, proposed by the speaker of the parliament Dmitry Razumkov, aims to restore the work of anti-corruption agencies without amending the constitution. However, even if it were adopted, law enforcement officers would have to close all cases opened against allegedly corrupt officials.

In addition, its adoption might face resistance from both the pro-Russian opposition and the ruling party.

“In this new reality, [Zelensky] will either have to agree to reshape his power by giving a number of portfolios to pro-Russian forces or go for early elections,” Zelenko said.

Another problem with a long-term suspension of the Constitutional Court is that it makes it possible for the pro-Russian opposition to reinforce its lobbying for changes to the legislative status of the parts of Donetsk and Lugansk regions outside Kyiv’s control.

Zelensky was diagnosed with Covid-19 last week, but said he felt well and would be working remotely during his period of isolation.