Kazakhstan litigation guide
Yuliya Mitrofanskaya
Salans
Tel: +7 727 258 2380; Fax: +7 727 258 2381; Website: www.salans.com
As the Republic of Kazakhstan’s economic role in the world increases, its courts are striving to earn authority as a venue for dispute resolution. To this end, the RK Supreme Court has launched a programme monitoring judges, which assesses various aspects of their performance. This includes (i) the quality of their court documents, (ii) the percentage of their court decisions cancelled by higher courts, (iii) public opinion surveys regarding the reputation of individual judges, (iv) press criticism, and (v) judges’ willingness to continue studying.
A judicial board uses the results of this monitoring to determine whether a judge should continue to serve. If this system continues for long enough, it will undoubtedly help to increase judges’ expertise, improve the quality of court decisions, and increase the overall cost-effectiveness of civil procedure. It will also help to reduce corruption in the courts.
There is also continuing reform of civil procedure legislation and laws regulating arbitration in Kazakhstan.
Judicial system and process
The judicial system is based on the RK Law on the Court System and Status of Judges in the Republic of Kazakhstan. It comprises the Supreme Court, oblast courts, and district courts. In addition to district courts of general jurisdiction, which are the first instance courts for criminal cases and civil cases (where at least one of the parties is an individual), there are economic and administrative district courts. The former considers business disputes, while the latter considers administrative cases. Disputes between participants in Almaty fall within the jurisdiction of the Specialised Financial Court.
Civil procedure is governed by the Civil Procedure Code, which was adopted in 1999. Since that time it has undergone certain major revisions, and an additional set of changes is under discussion. Court decisions can be obtained quite quickly in Kazakhstan. A first instance court must adopt a decision within two months. The parties have 15 days to appeal the decision of the first instance court. The appellate court must rule within one month of receiving the case from the first instance court. Thus, the total time to obtain an enforceable court decision in Kazakhstan is approximately four months. The appellate court ruling may be further appealed in supervisory proceedings within one year. It may take approximately two months for a supervisory level court to consider the case and make a ruling.
Parties to court proceedings may request interim relief (security measures) from the court, such as attachment of property, injunctions prohibiting certain actions, and order freezing assets.
Arbitration
Kazakhstan law differentiates between local arbitral tribunals, which are governed by the RK Law on Arbitral Tribunals, and international arbitral tribunals, which are governed by the RK Law on International Commercial Arbitration. Both kinds of tribunals are non-state institutions and offer an alternative to the state courts for the resolution of disputes. Arbitration can determine disputes arising from civil agreements save those that are not arbitrable as a matter of Kazakhstan law.
There are several differences in the regulation of local and international arbitral tribunals. An international arbitral tribunal has jurisdiction over disputes where at least one of the parties is a non-Kazakhstan resident. An international arbitral tribunal may apply the law agreed by the parties, whereas a local arbitral tribunal may only apply Kazakhstan law.
Awards of both international and local arbitral tribunals may be set aside or their enforcement refused by Kazakhstan state courts upon the request of the party or third parties whose interests are affected by the award. The grounds for the setting aside/refusal of enforcement of arbitral awards are similar to those established by the New York Convention, and include procedural violations and contravention of ‘public order’. In addition, a local arbitral award can be set aside if it violates Kazakhstan substantive law.
Arbitral awards are enforced in accordance with the Civil Procedure Code, which provides for ‘mandatory enforcement of an award’. Upon request by one of the parties a Kazakhstan court issues a writ of execution, which should be executed in the same manner as a writ of execution in respect of a Kazakhstan court decision.
Enforcement of foreign decisions and awards
In accordance with the Civil Procedure Code, decisions of foreign courts and arbitral tribunals are enforceable in Kazakhstan if so provided by law or by international conventions to which Kazakhstan is party. But this is on the principle of reciprocity. Kazakhstan has entered into several bilateral conventions on legal assistance in civil cases which provide for reciprocal recognition of foreign court decisions. Kazakhstan is a party to the 1958 New York Convention, the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States and the 1965 European Convention on International Commercial Arbitration.