Litigation & Dispute Resolution
1.1 What type of legal system has Kazakhstan got? Are there any rules that govern civil procedure in Kazakhstan?
The Kazakhstan legal system is influenced by the Civil Law tradition.
Present law of the Republic of Kazakhstan consists of: (i) the Constitution of the Republic of Kazakhstan having the highest legal force and direct effect on the territory of the Republic of Kazakhstan; (ii) codes, laws and other normative legal acts that are in compliance with the Constitution; (iii) provisions of international treaties and other commitments of the Republic; (iv) normative resolutions of the Constitutional Council; and (v) normative resolutions of the Supreme Court.
Litigation in civil matters is governed by: (i) the Constitutional Law “On Judicial System and Status of Judges of the Republic of Kazakhstan”; (ii) international treaties ratified by the Republic; (iii) the Code of Civil Procedure (“CCP”); and (iv) the normative resolution of the Supreme Court, which provide for mandatory guidance for courts on issues of implementation of legislative provisions.
1.2 How is the civil court system in Kazakhstan structured? What are the various levels of appeal and are there any specialist courts?
The judicial system of the Republic consists of (i) the Supreme Court, and (ii) local courts, which include (a) 14 Oblast Courts and two City Courts (in Almaty and Astana), and (b) district courts, which include specialised courts.
There are four levels of courts:
(i) First level – the district courts.
(ii) Appeal level – the Appeal Boards of the Oblast Courts/City Courts of Almaty and Astana.
(iii) Cassation level – the Cassation Boards of the Oblast Courts/City Courts of Almaty and Astana.
(iv) Supervisory level – the Supervisory Board of the Supreme Court.
There are the specialised civil courts – interregional economic courts which resolve commercial disputes.
1.3 What are the main stages in civil proceedings in Kazakhstan? What is their underlying timeframe?
There are no strictly stipulated stages of civil proceedings; however the proceedings can be conditionally divided into the following stages: (i) preparatory stage – from seven business days up to one month; (ii) main trial – up to two months; and (iii) pleadings and decision announcement – immediately after completion of the main trial.
1.4 What is Kazakhstan’s local judiciary’s approach to exclusive jurisdiction clauses?
Kazakh courts accept jurisdictions of foreign courts except for the following cases, when there is exclusive jurisdiction of Kazakh courts: (i) cases related to property rights for immovable property situated in the Republic; (ii) claims to carriers; (iii) divorce proceedings if one of the spouses is a Kazakh citizen with residence in the Republic; and (iv) claims against state authorities.
1.5 What are the costs of civil court proceedings in Kazakhstan? Who bears these costs?
The costs of civil court proceedings consist of:
(i) state fee – paid by a claimant, the amount is determined by the Tax Code depending on the essence and value of a claim; and
(ii) legal costs – include: (a) expenses connected with the involvement of experts, specialists, witnesses (travel and accommodation); (b) representation fee (lawyers’ and attorneys’ fees); and (c) other expenses that a court might regard as necessary.
Each party bears its own legal costs (i.e. if a claimant requests an expert, the claimant will bear the cost of such an expert).
A court shall rule whether a losing party must reimburse the costs of a winning party.
1.6 Are there any particular rules about funding litigation in Kazakhstan? Are contingency fee/conditional fee arrangements permissible? What are the rules pertaining to security for costs?
There are no particular rules about funding litigation in Kazakhstan. Contingency fee/conditional fee arrangement is not prohibited by legislation, however a court shall rule to reimburse representation fees in an amount not exceeding 10% of the value of a claim.
There are no rules pertaining to security for costs.
1.7 Are there any constraints to assigning a claim or cause of action in Kazakhstan? Is it permissible for a non-party to litigation proceedings to finance those proceedings?
A claim can be assigned only in limited cases, when an initial litigant is no longer able to act as litigant (e.g. death, incapability, and reorganisation/liquidation) but there is a legal successor. There is no direct restriction to the funding of litigation by a nonlitigant. However, the literal wording of the law implies that a court shall award reimbursement of the costs of legal proceedings with regard to expenses incurred by a litigant.
2 Before Commencing Proceedings
2.1 Is there any particular formality with which you must comply before you initiate proceedings?
Generally, there are no formalities to be complied with before initiating proceedings. For certain limited types of disputes a precourt settlement should be completed first.
2.2 What limitation periods apply to different classes of claim for the bringing of proceedings before your civil courts? How are they calculated? Are time limits treated as a substantive or procedural law issue?
The general limitation period is three years. This term commences from the day when a person became aware of, or should have been aware of, the infringement of its right.
Other limitation periods apply to various disputes – for instance: labour disputes (from two months to one year); disputes on invalidating transactions (one year); and disputes on objecting acts/actions of state authorities (three months).
A court is required to accept a claim, even if the limitation period has expired. The expiry of a limitation period is a grounds for defence that must be raised during the proceedings by a party (typically a defendant) prior to a court’s final decision, and it is a basis for a court to reject the claim.
3 Commencing Proceedings
3.1 How are civil proceedings commenced (issued and served) in Kazakhstan? What various means of service are there? What is the deemed date of service? How is service effected outside Kazakhstan? Is there a preferred method of service of foreign proceedings in Kazakhstan?
A civil case starts by filing a statement of claim with the court of first level in written or electronic form. The claim can be filed either straight to a court or through courier or mail. The date of service is deemed: (i) in case of filing straight to a court, the date of receipt by a court’s chancery; and (ii) in case of filing through courier/mail, the date of handing the claim to courier/submitting to post office.
3.2 Are any pre-action interim remedies available in Kazakhstan? How do you apply for them? What are the main criteria for obtaining these?
A claimant can request a court to secure the claim by undertaking interim measures of protection (e.g. arrest of bank account, prohibition of disposal of property, etc.). A defendant can request a court to secure its potential losses from such interim measures.
Litigants can request a court for security measures any time during the proceedings. A court shall consider each request. A court can satisfy a request if a litigant proves that without the security measures such litigant is unlikely to obtain what it intends in case of favourable judgment.
3.3 What are the main elements of the claimant’s pleadings?
The main elements of the claimant’s pleadings include: (i) the name of a court; (ii) the names of claimant and defendant, their addresses and contact details; (iii) the subject of a claim; (iv) arguments and evidence; and (v) a list of attachments.
3.4 Can the pleadings be amended? If so, are there any restrictions?
A claimant has a right to amend the pleadings any time before a court makes a decision on the matter.
4 Defending a Claim
4.1 What are the main elements of a statement of defence? Can the defendant bring counterclaims/claim or defence of set-off?
The statement of defence includes: (i) the names of claimant and defendant, their addresses and contact details; (ii) arguments and evidences; and (iii) a list of attachments.
A defendant is entitled to file a counter-claim before a court makes a decision on the matter. A court shall accept a counterclaim if: (i) a counter-claim can offset a claim; (ii) satisfaction of a counter-claim excludes in whole/partially satisfaction of a claim; and (iii) there is a connection between a claim and a counter-claim, and their joint consideration allows for resolving the matter more promptly and correctly.
4.2 What is the time limit within which the statement of defence has to be served? The statement of defence shall be submitted within the term stipulated by a court, which would allow a review of the statement before the main trial.
4.3 Is there a mechanism in your civil justice system whereby a defendant can pass on liability by bringing an action against a third party?
No, there is no such mechanism. There is a similar mechanism, when a defendant might request a court to recognise itself as an improper defendant. If a court decides that the defendant is an improper one, a claimant shall either continue the case against such improper defendant or involve the proper defendant.
4.4 What happens if the defendant does not defend the claim?
If a defendant does not defend the claim (admits the claim), a court issues a judgment in favour of the claimant.
4.5 Can the defendant dispute the court’s jurisdiction?
A defendant is entitled to dispute a court’s jurisdiction, e.g. if: (i) a case is subject to consideration in another district; (ii) a case is subject to pre-court settlement; and (iii) there is an arbitration clause between the litigants.
5 Joinder & Consolidation
5.1 Is there a mechanism in your civil justice system whereby a third party can be joined into ongoing proceedings in appropriate circumstances? If so, what are those circumstances?
The following are third parties that can join the ongoing proceedings before a court makes a decision on the matter:
(i) A third party having demands for the subject of a dispute. Such party can join the proceedings by filing a claim against either litigant.
(ii) A third party having no demands for the subject of a dispute. Such party can join the proceedings if the result of the proceedings may affect rights or obligations of such party with regard to either litigant.
5.2 Does your civil justice system allow for the consolidation of two sets of proceedings in appropriate circumstances? If so, what are those circumstances?
A court, at its own discretion, can consolidate two or more proceedings if the court considers such consolidation to be practical. The consolidation is allowed in the following cases: (i) if there are several similar cases between the same litigants; (ii) if there are claims of one claimant to several different defendants; and (iii) if there are claims of several claimants to one defendant.
5.3 Do you have split trials/bifurcation of proceedings?
A court, at its own discretion, can split the claim into proceedings if the claim combines one or more separate demands, and if such split is practical. A court, at its own discretion, can split the proceedings into one or more separate proceedings if there are claims of several claimants to several defendants, and if such split is practical.
6 Duties & Powers of the Courts
6.1 Is there any particular case allocation system before the civil courts in Kazakhstan? How are cases allocated?
Though the cases are deemed to be allocated randomly by a computer system, in practice the cases are allocated by a chairman of a court depending on the specialisation of certain judges (e.g. tax case, land dispute, labour dispute).
6.2 Do the courts in Kazakhstan have any particular case management powers? What interim applications can the parties make? What are the cost consequences?
This is not applicable to Kazakhstan.
6.3 What sanctions are the courts in Kazakhstan empowered to impose on a party that disobeys the court’s orders or directions?
A civil court itself has no power to impose any sanction on a party that disobeys court’s orders or directions. However, there are administrative and criminal liabilities to be imposed by relevant administrative or criminal courts.
6.4 Do the courts in Kazakhstan have the power to strike out part of a statement of case? If so, in what circumstances?
No, a court has no power to strike out part of a statement of case.
6.5 Can the civil courts in Kazakhstan enter summary judgment?
Yes, the civil courts can enter summary judgment in the form of a court order. The court order is issued without a court trial. The court order can be issued if the claim is based on indisputable demands related to property or money. The order is enforced directly, i.e. without an enforcement order (please refer to question 9.3 below).
The court order can be issued on the following demands: (i) demands based on an agreement verified by a notary; (ii) demands based on written agreement and that are accepted by the defendant; (iii) demands based on protest of a bill by a notary; (iv) demands on payment of alimony; (v) demands on tax debt recovery; (vi) demands on payment of salary; and (vii) demands of police on reimbursement of expenses of investigation.
6.6 Do the courts in Kazakhstan have any powers to discontinue or stay the proceedings? If so, in what circumstances?
A court has powers to discontinue and to stay the proceedings.
The following are cases when a court must stay the proceedings: (i) death of a litigant, reorganisation/liquidation of an entity, if succession is applicable; (ii) loss of capacity by a litigant; (iii) if a defendant serves in the combat army of the Republic; (iv) the impossibility of resolving the case until another civil, criminal or administrative case is resolved; (v) if an applicable legal act is under consideration of the Constitutional Council; (vi) if a court requests a foreign court for legal redress; and (vii) if the litigants agreed to start a mediation procedure.
The following are cases when a court may stay the proceedings: (i) if a defendant serves in the army of the Republic; (ii) if a litigant is on a business trip; (iii) if a defendant is sick; (iv) if a defendant is being searched; (v) if an expert is appointed; and (vi) if a court requests domestic court for legal redress.
The following are cases when a court shall discontinue the proceedings: (i) the case is not subject to civil litigation; (ii) if there is a valid judgment on the case between the same parties on the same subject; (iii) if a claimant withdraws its claim; (iv) if the parties signed an amicable agreement; (v) the death of a litigant while succession is not applicable; and (vi) the liquidation of an entity while succession is not applicable.
7.1 What are the basic rules of disclosure in civil proceedings in Kazakhstan? Are there any classes of documents that do not require disclosure?
There are no particular rules of disclosure in civil proceedings. Civil proceedings are open to the public, except for cases where state secrets or adoption are involved, or if there is a petition of a litigant on the involvement of commercial secrets.
If a party refuses to disclose any document, a court might regard such document as refuting such party’s position and as admitting, by such party, of a fact that can be confirmed/refuted by such document.
7.2 What are the rules on privilege in civil proceedings in Kazakhstan?
Kazakh courts recognise private immunity and privacy. Everyone enjoys privacy of correspondence and telephone, mail, telegraph and other types of communication. A person can be deprived of his privacy in civil proceedings only in limited cases directly stipulated by legislation (e.g. if both the addressee and the sender agree to disclosure).
7.3 What are the rules in Kazakhstan with respect to disclosure by third parties? A court, upon petition of a litigant, can issue a request to any third party to provide any document or information related to a case. Such party is obliged to provide the requested document/ information.
7.4 What is the court’s role in disclosure in civil proceedings in Kazakhstan?
A court, upon petition of a litigant, can issue a request to the other litigant to provide any document or information related to a case. Such litigant is obliged to provide the requested document/ information.
7.5 Are there any restrictions on the use of documents obtained by disclosure in Kazakhstan?
There are no direct restrictions on the use of documents obtained by disclosure in Kazakhstan.
8.1 What are the basic rules of evidence in Kazakhstan?
Evidence shall be imputable (actual information that either confirms or refutes facts having importance to the case) and admissible. Evidence shall be obtained in compliance with the law.
Evidence includes explanation of parties and third persons, statements of witnesses, material evidence, expert conclusions, protocols of procedural actions and other documents.
8.2 What types of evidence are admissible, which ones are not? What about expert evidence in particular?
Evidence shall be regarded as admissible if it has been obtained in compliance with legislation.
The following types of evidence are not admissible: (i) evidence obtained forcibly, as a result of threatening, deceptive or other illegal actions; (ii) evidence obtained from a person who has not been properly informed about his rights; (iii) evidence obtained as a result of procedural action by a person without proper authorisation; (iv) evidence obtained from a person who was subject to challenge; (v) evidence obtained with significant violation of procedural order; (vi) evidence obtained from an unidentified source; and (vii) evidence obtained as a result of application of unscientific methods. An expert conclusion has the same status as other evidence, it is not binding for a court.
An expert shall be an impartial person who possesses certain knowledge and has a special licence for undertaking judicial expertise.
8.3 Are there any particular rules regarding the calling of witnesses of fact? The making of witness statements or depositions?
No one is obliged to witness against himself/herself, his/her spouse and relatives. Priests are not obliged to witness against a confessor.
A witness can be any person who is aware of any information about the case. A witness must identify the source of his/her awareness.
The following persons cannot be examined as witness: (i) persons who cannot properly interpret facts and report about such facts due to their age, physical or psychological condition; (ii) attorneys who become aware of certain facts as representatives in civil or criminal cases; (iii) a judge in respect of information obtained in a retiring room; and (iv) other persons indicated in the legislation.
8.4 Are there any particular rules regarding instructing expert witnesses, preparing expert reports and giving expert evidence in court? Does the expert owe his/her duties to the client or to the court?
There are no particular rules regarding instructing expert witnesses, preparing expert reports and giving expert evidence in court.
An expert owes his/her duties to a court.
8.5 What is the court’s role in the parties’ provision of evidence in civil proceedings in Kazakhstan?
Each party shall provide for evidence confirming its position itself; a court is not obliged to collect evidence.
A court can assist any party that cannot obtain evidence itself, upon relevant petition of such party. A court issues a request to a person who holds relevant evidence. Such person shall provide the requested evidence or provide a valid excuse for failure to do so.
9 Judgments & Orders
9.1 What different types of judgments and orders are the civil courts in Kazakhstan empowered to issue and in what circumstances?
The following are types of judicial acts that the civil courts issue:
(i) A ruling is issued to confirm certain procedural action (acceptance of a claim, initiation of the proceedings, suspension or discontinuance of the proceedings, taking security measures, approval of amicable agreement or settlement agreement, etc.).
(ii) A decision is issued as a result of consideration of the case on the merits and includes judgment.
(iii) A resolution is issued by a court of appeal and cassation level; it is similar to the decision.
(iv) An order is issued as a result of summary judgment.
9.2 What powers do your local courts have to make rulings on damages/interests/costs of the litigation?
A civil court has all powers to make rulings on damages/ interest/costs within a claim, i.e. if the claim includes such demands, the court shall make relevant rulings.
9.3 How can a domestic/foreign judgment be enforced?
A domestic judgment is enforced either voluntarily or forcibly. Once the judgment becomes valid, a court issues an enforcement order. The enforcement order shall be a basis for enforcement officers to undertake forcible enforcement of the judgment.
A foreign court judgment is enforced if there is a relevant international treaty on mutual recognition of judicial acts. Procedure of enforcement of the foreign court judgment is determined by the relevant international treaty. Usually, the foreign court judgments are enforced in the same order as the domestic court judgments.
9.4 What are the rules of appeal against a judgment of a civil court of Kazakhstan? Judgment of a court of first level can be appealed to the court of appeal level within 15 days from the day of receipt of the judgment by a relevant litigant. The court of appeal is entitled either: (i) to confirm the judgment; (ii) to change the judgment; or (iii) to cancel the judgment and issue a new judgment.
The judgment of the court of first level becomes valid (unchanged or changed or newly issued) at the announcement of the ruling by the court of appeal level.
The judgment of the court of first level and the ruling of the court of appeal level can be further appealed to the court of cassation level within six months from the day when these judicial acts became valid.
The judgment of the court of first level, the ruling of the court of appeal level and the ruling of the court of cassation level can be further appealed to the Supreme Court within one year from the day when these judicial acts became valid.
II. ALTERNATIVE DISPUTE RESOLUTION
1.1 What methods of alternative dispute resolution are available and frequently used in Kazakhstan? Arbitration/Mediation/Expert Determination/Tribunals (or other specialist courts)/Ombudsman? (Please provide a brief overview of each available method.)
The following are alternative dispute resolution methods available in Kazakhstan:
(i) Local arbitration is aimed at settling disputes between residents of the Republic (individuals and/or legal entities) in accordance with the substantial law of the Republic. Parties to any dispute can enter an arbitration clause. Civil courts shall forward the case to the relevant arbitration if there is an arbitration clause and any party referred to such arbitration clause.
(ii) International arbitration is aimed at settling disputes between residents of the Republic and non-residents (individuals and/or legal entities) in accordance with the substantial law that the parties of the dispute have chosen as applicable. Civil courts shall forward the case to the relevant arbitration if there is an arbitration clause and any party referred to such arbitration clause.
(iii) Mediation is aimed at settling disputes though negotiations and signing settlement agreements. A civil court shall suspend litigation if parties agree to settle the dispute through mediation. If parties manage to settle the dispute through mediation, they enter into the settlement agreement, which is then approved by the civil court. If parties do not succeed in settling the dispute through mediation, the civil court resumes consideration of the case.
1.2 What are the laws or rules governing the different methods of alternative dispute resolution?
There are three special laws regulating each method of alternative dispute resolution: (i) the Law “On Arbitration Court” in the Republic of Kazakhstan dated 28.12.2004; (ii) the Law “On International Commercial Arbitration” dated 28.12.2004; and (iii) the Law “On Mediation” dated 28.01.2011.
In addition, certain procedural issues related to each of the methods are regulated by the Code of Civil Procedure.
1.3 Are there any areas of law in Kazakhstan that cannot use Arbitration/Mediation/Expert Determination/Tribunals/Ombudsman as a means of alternative dispute resolution? Alternative dispute resolution shall not apply to disputes involving state bodies.
1.4 Can local courts provide any assistance to parties that wish to invoke the available methods of alternative dispute resolution? For example, will a court – pre or post the constitution of an arbitral tribunal – issue interim or provisional measures of protection (i.e. holding orders pending the final outcome) in support of arbitration proceedings, will the court force parties to arbitrate when they have so agreed, or will the court order parties to mediate or seek expert determination? Is there anything that is particular to Kazakhstan in this context?
Civil courts shall forward a case to arbitration or mediation if there is relevant agreement between the litigants and any of the litigants requested the court to do so.
A civil court shall issue orders on an interim measure of protection if a party to arbitration requests the court accordingly
1.5 How binding are the available methods of alternative dispute resolution in nature? For example, are there any rights of appeal from arbitration awards and expert determination decisions, are there any sanctions for refusing to mediate, and do settlement agreements reached at mediation need to be sanctioned by the court? Is there anything that is particular to Kazakhstan in this context?
Rulings of local and/or international arbitration are binding for the parties of a dispute. If a ruling is not fulfilled voluntarily, a winning party can request a civil court to issue an enforcement order, which allows commencing forcible enforcement of the ruling.
A settlement agreement signed as a result of the mediation shall be approved by a civil court and shall be binding for the parties. A settlement agreement approved by a civil court shall be the basis for the issuance of an enforcement order by a civil court.
2 Alternative Dispute Resolution Institutions
2.1 What are the major alternative dispute resolution institutions in Kazakhstan? Currently the following are arbitration institutes (they can both operate as local and international arbitration): (i) the International Arbitration Court; (ii) the International Arbitration Court at the Chamber of Commerce and Industry of the Republic of Kazakhstan; (iii) the Kazakh International Arbitrage; and (iv) the Independent Arbitration Centre.
Currently there are no permanent institutions of mediators; however there are lists of mediators in all civil courts which allow litigants to choose an appropriate mediator.
2.2 Do any of the mentioned alternative dispute resolution mechanisms provide binding and enforceable solutions?
Local and international arbitration is proving to be an effective alternative method of dispute resolution. Rulings of the arbitrations are binding and can be enforced in practice.
Mediation was introduced in 2011; therefore it is difficult to conclude whether this alternative method is effective in practice.
3 Trends & Developments
3.1 Are there any trends in the use of the different alternative dispute resolution methods?
We observe that the state is trying to strengthen the role of alternative dispute resolution methods in recent years.
In our practice many private sector clients include arbitration clauses in their sample contracts, which was not usual two to three years ago.
3.2 Please provide, in no more than 300 words, a summary of any current issues or proceedings affecting the use of those alternative dispute resolution methods in Kazakhstan.
In our practice we noticed the following factors that we consider as negatively affecting the use of alternative dispute resolution methods:
(i) Lack of experience of arbiters – the list of potential arbiters includes mainly academicians, who appear to actually have no practical experience in dispute resolution. As a result, arbiters try to resolve a dispute from a formal standpoint, while we believe they should be more oriented to offer commercially practical settlements and to find certain compromises acceptable for both parties.
(ii) Lack of responsibility – arbiters/mediators bear no responsibility (neither moral nor material) for their judgments; thus there are no incentives for arbiters/mediators to settle the dispute fairly and justly.
(iii) Lack of trust – we still observe that many local companies do not trust that a private institution can be impartial and can make fair and just decisions. There are certain valid grounds for such mistrust – unlike judges of civil codes, arbiters/mediators seem to be easily influenced by a party that has more power. As mentioned above, unlike judges, arbiters are not subject to any responsibility for improper judgment.
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