Calculation of state fee

Recently, we experienced an unusual situation when submitting an application to the Supreme Court of the Republic of Kazakhstan.

Acting in the interests of a Russian Federation resident client, we submitted a motion for the reconsideration of judicial rulings in cassation. However, our petition was returned unexamined. The reason was an alleged «shortfall» in the payment of state fees. In fact, despite the claim amounting to approximately $900k, the state fee was remitted in the amount of 1.4 million tenge. Therefore, at first glance, the «shortfall» is evident.

However, the calculation of state duty depends not solely on the Tax Code but also on other regulations. For instance, Kazakhstan entered into an Agreement on Amount and Collection Procedure of State Duty for Economic Disputes between Entities of Different States dated December 24, 1993.

Said Agreement establishes:

(1) varied rates of state duty that depend on the value of the claim and the rate for filing a non-property claim, as modified by the Protocol of June 1, 2001.

(2) rate of state duty for applications on reconsideration of court decisions at 50% of the varied state duty rate, as amended by the Protocol of December 10, 2010.

Therefore, if a plaintiff from one contracting state files a claim against a defendant from another contracting state to a court of the defendant's jurisdiction, the plaintiff pays the state duty as outlined in the aforementioned Agreement. However, if a plaintiff from one contracting state files a claim against a defendant from another contracting state to a court of the plaintiff's jurisdiction, the Agreement would not apply.

Similarly, when seeking a reconsideration of court decisions or rulings, the Agreement applies irrespective of who files the application – a non-resident plaintiff or a resident defendant.

In applying the Agreement, it is important to:

Initially, ascertain whether both the plaintiff and the defendant are residents of the States Parties to the Agreement. For instance, one can verify the Agreement status for the plaintiff's and defendant's respective States on the websites of the Ministry of Foreign Affairs.

Secondly, verify the specific wording in which the Agreement should be applied. For instance, note that the Protocols of June 1, 2001, and December 10, 2010, may not have entered into force for all the States Parties to the Agreement.

Anyway, adhering to the Agreement as per the Protocols permits residents of the participating states to significantly decrease the state duty amount payable when file a claim in Kazakhstan's courts.

Let's go back to our situation. Despite that fact that we paid the state duty in accordance with to the Agreement, which was expressly stated in the application, the Supreme Court returned the application without consideration. At that there is no provision in the legislation allowing for an appeal against such a decision. Therefore, we had to contact the responsible judge to explain the state duty calculation. Even after acknowledging our correctness, the judge informed us that the only option was to resubmit the application.

Fortunately, we were able to resubmit the application within the deadline, and it was eventually reviewed (nevertheless we hope that if the deadline had been missed, the Supreme Court would have rectified the situation, such an outcome would undoubtedly have caused significant stress and inconvenience for both our team and the client).

The practical takeaway from this situation is to provide a detailed description of the state duty calculation in lawsuits and petitions for judicial act reconsideration. This includes specifying monetary claim amounts, property values, non-property claim numbers, and citing the relevant legal provisions. Such clarity should help to prevent misunderstandings, even when appealing to the Supreme Court.