Kazakhstan has Adopted a New Civil Procedural Code

On 31 October 2015, the President of the Republic of Kazakhstan signed the new civil procedural code (hereinafter “CPC”), which comes into force on 1 January 2016.

Significant novelties:

•\tInvestment disputes will be heard in Astana (disputes involving major investors will be heard by the Supreme Court of the RoK).

•\tParticipatory procedure means the opportunity to settle a dispute involving lawyers before the rendering of an award.

•\tThe role of the stage of preparation of a case for trial has been enhanced.

•\tThe stages of appeal have been shortened.

•\tThere is a panel hearing in the court of appeal.

•\tThere is a limitation of cassation appeal in the Supreme Court of the RoK.

In the present Client Update, we have briefly reviewed these significant novelties and will describe some of them in detail in our future releases.

Astana City Court Is the Court of First Instance Hearing Investment Disputes

In one of our previous updates, we have noted on the initiatives and plans of establishing a court for hearing investment disputes. These plans have been included in the new CPC, which promotes the possibility of hearing investment disputes in an Astana city court.

Moreover, the hearing and settlement of investment disputes involving major investors according to the terms of the court of first instance is the responsibility of the Supreme Court of the RoK. Notably, the new CPC does not define “investment disputes”, “investor” and “major investor”.

Possibility of Regulating a Dispute in Order of the Participatory Procedure

The participatory procedure purports to be negotiations between parties with the assistance of the parties’ lawyers involved in the case, without the involvement of judges. Just like in other conciliation procedures (mediation, settlement agreement), in both the court of first instance and the court of appeal, the parties can opt for the regulation in order of the participatory procedure prior to the withdrawal of judges to the deliberations room.

In case of nonachievement of agreement in the process of the participatory procedure, the parties could resume the consideration of the case according to the standard procedure. The agreement reached as a result of the participatory procedure could be executed in an enforcement procedure, through the issuance of an enforcement order by the court.

Extension of Time Limit of Preparation for a Hearing

The former CPC stated that the time limit of the preparation for a hearing is seven days, whereas according to the new CPC, the preparation for a hearing is to be performed in the course of fifteen days. Where required, the stated time limit could be extended for another month. This novelty implies that the preparation for a hearing is given particular emphasis and that this stage is of no less importance than the hearing itself.

Changes to the Stages of the Legal Procedure

The main feature of the new CPC can be characterized as the shortening of the stages of the court system of the RoK; namely, courts of first instance are now represented by district courts and equivalent courts. Courts of appeal are the boards of appeal for civil and administrative cases in regional courts and equivalent courts. The Supreme Court of the RoK hears cases in the cassation procedure. The new CPC repeals hearings in the supervisory procedure.

The present novelty accounts for the fact that, previously, the hearing of a case in the cassational procedure was in essence but a matter of form for the filing of a supervisory complaint in the Supreme Court of the RoK. Now that the cassation procedure replaces the supervisory procedure, legal costs for parties will be considerably reduced. According to the new CPC, the grounds for hearing in the Supreme Court are put under restraint.

Change of Order in Hearing an Appeal Claim

Whereas previously cases in appeal were heard by judges singly, now cases in appeal will be heard by a collegiate court of at least three judges. The sole exception is for cases heard in a simplified procedure that are to be heard in appeal by a judge singly.

The appeal instance for investment disputes is represented by a specialised judicial body of the Supreme Court of the RoK, with a collegiate court of at least three judges.

In addition, another novelty in the CPC is the extension of time limit in filing an appeal complaint to one month since the rendering of a decision, except for cases specifically stated by the CPC.

Changes (Extension) to the Credentials of the Court of Cassation, the Supreme Court Will Hear a Limited Number of Cases

The procedure in the court of cassation is the final instance of hearing. Judicial acts of local and other courts as well as the specialised judicial body of the Supreme Court of the RoK that have entered into force could be appealed in the court of cassation in the Supreme Court of the RoK on terms of maintenance of the order of appeal.

Along with that, the Supreme Court of the RoK does not hear the following cases in the court of cassation:

•\tCases heard in the simplified procedure

•\tCases resolved in conciliation (amicable settlement, mediation, participatory procedure)

•\tCases involving individuals with a claim worth less than two thousand MCI (monthly calculation index)

•\tCases involving legal entities with a claim worth less than thirty thousand MCI

•\tCases completed on grounds of claim withdrawal

•\tCases of settlement of noncreditworthiness as well as disputes arising from the rehabilitation procedure and bankruptcy procedure

According to the new CPC, the reinstatement of the limitation period for filing a cassation claim is possible on the condition of positive resolution of the limitation period reinstatement claim in the court of first instance. In case of dismissal in the court of first instance, the appeal is to be filed in the court of appeal.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek a lawyer for a specific advice. 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.