Changes Related to Compensation of Damage by Subsurface Users

Changes, related to questions of harm reimbursement, which were made by subsurface users during execution of subsurface use operations.

Before entering into effect of new Law of RoK “On subsoil and subsoil use” dated 24.06.2010 the legislation of RoK on subsoil use had stipulated following basic requirements on reimbursement of the damage by subsoil users.

Thus, the requirements to the damage reimbursement by subsoil user are restricted by following cases:

•\tdamage reimbursement which was made during execution of subsoil use operations on sea;

•\tdamage reimbursement which was made during execution of subsoil use operations within preventive zone;

•\tdamage reimbursement occurred because of requirements violations in the sphere of subsoil protection and rational usage of subsoil.

With enactment of the new Law regarding limited enumeration of cases, when the damage reimbursement could be vindicated and was expanded, also vindication conditions of damage have been changed for separate cases.

For readers’ convenience below is stated comparison table with statement of the previous and new legislation on subsoil use in regard to damage reimbursement.

Damage reimbursement during execution of operation on subsoil use on sea.

Thus, subsoil user who executes oil operations on sea, can be released of responsibilities on reimbursement of caused damage in case, if the subsoil user will be able to prove that such damage is occurred in a result of impassable power or intention of a victim.

Damage reimbursement during subsoil use operation within preventive zone.

In contrast to the old legislation, the new legislation does not stipulate separate regulation of questions, connected with damage reimbursement, caused within preventive zone.

Now such questions must be regulated in general terms, stipulated in the legislation of RoK.

Damage reimbursement in a result of requirements violation in the sphere of rational usage of subsoil protection.

Firstly, there is broadened the circle of cases when to the subsoil user can be presented requirements on damage reimbursement and subsoil user is not restricted by the cases of requirements violation of rational usage and subsoil protection how it was previously;

Secondly, responsibility of the subsoil user on damage reimbursement by the third persons is not applied on persons, who are guilty in damage occurrence.

General Conclusions:

How you can see, there is direct evidence of positive and negative innovations for subsurface users. Thus, at the present time, during execution of operation on sea, it is taken into account circumstances of impassable power. Also, now, it is taken into account the fact of intention presence of the victim in case of damage cause. However there are such innovations, which potentially can lead to worsening of situation of the subsurface users. Thus, previously the legislation defined precisely enough in which cases to charge from the subsurface users for caused damage.

In present, the damage charge is allowed for any violation of the legislation of the RoK on subsurface and subsurface users. And though there is stipulated in the new Law, that the amount and terms of damage reimbursement must be established by the legislation of the RoK, this does not exclude the possibility of presenting by the authoritative bodies and other victims requirements on damage reimbursement on any case on the basis of the general regulations of the civil legislation of the RoK on damage.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek for a specific advice in relation to any questions. Please note that Kazakhstan and Turkmenistan are emerging economies and their legislation and legal systems are in constant development. Should you have any questions or would like to discuss subjects addressed in this Client Update please contact us.