Dispute Resolution Recent Trends: Closer Look At Participatory Procedure

On 31 October 2015, the President of the Republic of Kazakhstan signed the new Code of Civil Procedure (hereinafter – “the CPC”), which entered into force on 1 January 2016. One of the main innovations of the CPC was the introduction of a participatory procedure, which construed the ability to settle a dispute with the help of attorneys before the awarding of a decision. In this review, we take a closer look at this procedure and its features.

According to the CPC, a civil dispute in its entirety or in part, in addition to mediation, can be settled via a participatory procedure. The resolution of the dispute via a participatory procedure can be applied to all cases except for those arising from public relations. The objective of this procedure is the prompt resolution of disputes in a manner that will satisfy both parties and the reduction of the caseload in the judicial system.

In contrast to mediation and amicable settlement, dispute settlement via a participatory procedure occurs without the participation of a judge; negotiations between the parties take place with the assistance of attorneys on both sides. This means that attorneys must represent the parties, whereas amicable settlement and mediation procedures do not require attorneys’ presence. Just as is the case in mediation, parties can request to settle the dispute via a participatory procedure before the court withdraws to conference room in the first, appeal, or cassation instances. The parties can claim their request to settle the dispute via participatory procedures in the court of cassation in cases where this does not require additional proceedings and the suspension of the proceedings. Along with the petition to the court of cassation, the parties must submit an agreement to settle the dispute via a participatory procedure.

In the case of a participatory procedure, as in the case of mediation, the court may suspend the proceedings until the end of the participatory procedure at the request of a party or on its own initiative. As is the case in mediation, the period of suspension of the proceedings cannot exceed ten working days. That is, the dispute via a participatory procedure must be settled within ten working days.

The judge who hears the case examines the contents of the agreement on dispute settlement via a participatory procedure and makes a regulation on its approval and the dismissal of the proceedings.

The agreement on dispute settlement via a participatory procedure and the decision on the approval of the agreement must comply with the requirements of the amicable settlement in the following ways:

•\tThe agreement must be in writing, and the parties or their authorized representatives must sign it;

•\tThe agreement must include terms that the parties have agreed on, with the stated term and the order of its enforcement;

•\tThe agreement must not contravene the law and violate the rights and legitimate interests of other persons;

•\tThe agreement must not fall under a suspensive condition;

•\tThe parties must conclude the agreement in the amount exceeding the number of individuals who signed the agreement by one as one copy shall be attached to the case file;

•\tOther requirements that the laws of the Republic of Kazakhstan have established apply.

Along with the advantages, such as the prompt dispute settlement, the contentiousness of the parties, the lower material costs, the awarding of decisions which are satisfactory for both parties, and the participation of professional lawyers (attorneys), the participatory procedure has certain drawbacks. These include the following:

•\tDispute settlement that only the attorneys attend;

•\tThe narrow scope of application – disputes affecting the interests of third parties and public disputes cannot be settled via the participatory process;

•\tIn cases where the parties cannot reach an agreement via a participatory procedure or the court has not approved the terms of the dispute settlement agreement, the proceedings are carried out in the general procedure.

The rules of enforcement of the amicable settlement regulate the order of enforcement of the settlement agreement:

•\tThe persons who concluded the agreement enforce it voluntarily, in accordance with the procedure and requirements set out in the agreement;

•\tAn agreement which is not enforced voluntarily should be enforced by force on the basis of an order of enforcement which the court issues at the request of the person who concluded the agreement.

You can learn about the other innovations in the CPC from our upcoming releases.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please note that Kazakhstan is an emerging economy and its legislation and legal system are in constant development. Should you have any questions or would like to discuss matters addressed in this Client Update, please contact us.