Lawyer for arbitration cases in Almaty — we handle business disputes in the economic court and arbitration

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Arbitration lawyer in Kazakhstan: where business disputes are heard and how to prepare a case

A company director or shareholder arrives with a typical set of issues: the counterparty is not paying under the contract, the text contains an arbitration clause, they hold an award from an arbitral institution, or business partners have entered into open conflict. Out of Russian habit, such a request is often framed as an "arbitration lawyer" and they immediately look for a state arbitration court, which does not exist in Kazakhstan. As a result, time is lost on determining jurisdiction, and sometimes the pre-action claim procedure is missed, and the court returns the claim or leaves it without consideration.

The article examines where business disputes are heard in Kazakhstan: the Specialized Interdistrict Economic Court, arbitration by agreement of the parties, and the court of the Astana International Financial Centre. It separately addresses the arbitration clause and its enforceability, the procedure for recognising foreign arbitral awards, corporate conflicts and claims against a director, as well as mediation and judicial conciliation as workable settlement scenarios.

"Arbitration lawyer" in Kazakhstan: what the request actually means

Kazakhstan has no state arbitration courts. Commercial disputes are heard by a specialized economic court within civil proceedings, while "arbitration" in Kazakhstan law means arbitral proceedings — an alternative way of resolving a conflict by agreement of the parties. Therefore, the request for an "arbitration lawyer" in Almaty and other cities covers several different situations.

Behind the phrase "arbitration lawyer" there is most often a need for a representative before an economic court: recovery of debt, challenging transactions, enforcement of supply, construction and services contracts. The dispute proceeds under the rules of the Civil Procedure Code of the Republic of Kazakhstan, and the decision is made by the court. The lawyer handles the case from preparing the claim and interim measures through to enforcement proceedings via a court enforcement officer.

The second meaning is arbitral proceedings proper. The parties may refer a dispute to a permanent arbitration or to ad hoc arbitration if this is set out in the contract or in a separate arbitration agreement. The lawyer's task is to check the validity of the arbitration clause, form the arbitral tribunal, prepare the position and later secure recognition and enforcement of the arbitral award.

• establish whether the contract contains an arbitration clause and where it refers the dispute
• distinguish between an economic court, arbitral proceedings and a corporate conflict
• check whether the limitation period has expired for a specific claim
• assess the evidence: contracts, acts, correspondence, bank documents
• determine whether interim measures are needed before the decision takes effect
• plan enforcement of the future decision through a court enforcement officer

Where business disputes are heard: economic court, arbitration, AIFC court

Kazakhstan has no state arbitration courts as in Russia. Economic disputes are heard by specialized interdistrict economic courts — specialized courts equated to district courts, where judges apply the rules of the Civil Procedure Code of the Republic of Kazakhstan. In Kazakhstan law, "arbitration" means arbitral proceedings: the parties to a contract refer the dispute to chosen arbitrators or to a permanent arbitration, and the award is enforced through a state court. The third format is the court of the Astana International Financial Centre, which hears disputes involving centre participants, disputes concerning its activities, and disputes referred there by agreement of the parties.

An "arbitration court lawyer" — as a representative in arbitration is habitually called — and a representative before an economic court work towards the same goal, proving the client's position, but in different procedural conditions. In a state court the case is conducted openly, hearings are scheduled by the court, the parties exchange responses and evidence, and the decision is reviewed by appeal and cassation. In arbitral proceedings the procedure is determined by the rules and the agreement of the parties, hearings are closed, and appeal is limited — the award can only be set aside on the exhaustive list of grounds in Article 52 of the Law of the Republic of Kazakhstan "On Arbitration". The AIFC court combines common law procedure with Kazakhstan enforcement: the case is conducted under the rules of the court, the language of proceedings is English, and decisions are recognised and enforced on the territory of the republic.

• the subject matter of the dispute and the existence of a valid arbitration agreement between the parties
• the involvement of a foreign element, the currency of the obligation and the language of the documents
• the required degree of confidentiality and the admissibility of closed proceedings
• the appeal structure: appeal and cassation in a state court, or the limited grounds for setting aside an arbitral award
• the procedure for enforced execution of the judgment and the scope of the debtor's property

Jurisdiction and the language of the proceedings are determined by the contract, the status of the parties and the nature of the dispute.

Lawyer for arbitration cases in the economic court

In Kazakhstan, a dispute between companies is heard by a specialised economic court. Its jurisdiction covers claims arising from supply, construction, services, lease and carriage contracts, as well as disputes over the recovery of debt and penalties. Lawyers prepare the claim, gather evidence of performance of obligations and represent the client at hearings. Corporate conflicts are dealt with separately: challenging decisions of management bodies, a participant's withdrawal from an LLP, disputes over a share and the recovery of partnership documents.

A distinction should be drawn between the state economic court and arbitration: arbitration is the resolution of a dispute by agreement of the parties instead of the state court, and it is governed by the Law of the Republic of Kazakhstan on Arbitration. The parties may include an arbitration clause in the contract in advance and refer the conflict to chosen arbitrators. Legal services in this format require scrutiny of the agreement itself, its enforceability and the procedure for forming the panel of arbitrators.

• review of the contract, the arbitration clause and the jurisdiction over the dispute
• collection of primary documents and confirmation of the signatories' authority
• preparation of the claim, the response and calculation of the debt to be recovered
• participation in hearings of the economic court and in arbitration
• an application for interim measures and work with the court enforcement officer
• support of enforcement proceedings and recovery

Pre-trial claim procedure and pre-trial settlement

The pre-trial claim procedure is mandatory when it is expressly established by law for a particular type of contract or when the parties have included such a condition in the contract: by law a claim is mandatory, for example, in disputes arising from the carriage of goods, and for supply, works and services — if such a condition is present in the contract. A separate rule applies to disputes with state bodies: under the Administrative Procedural Code of the Republic of Kazakhstan, a complaint is first filed with a superior body, and only after that is the dispute considered by an administrative court. If the mandatory procedure is not observed, the claim may be left without consideration, which delays the protection of interests and creates unnecessary costs.

Even when a claim is not mandatory, it records the party's position before trial, gives the counterparty a chance to remedy the breach voluntarily and builds the evidentiary base. A well-drafted claim with a calculation and references to primary documents often leads to payment or the signing of an agreement without going to court.

The counterparty's response to the claim becomes evidence in the proceedings. Silence or a refusal to acknowledge the debt can be used to confirm delay and bad faith. In arbitration, the response and correspondence help to show that the dispute has not been settled by the parties voluntarily, and therefore requires a hearing.

An arbitral award is not appealed on the merits. It can be set aside only on limited grounds related to procedure and public policy. Therefore, the quality of pre-trial work and the correct recording of correspondence directly affect whether a party will be able to protect its interests at subsequent stages.

• A claim is mandatory if this is provided for by law for the given type of contract or by the contract itself.
• A claim records the requirements and the calculation before trial, reducing the risk of ambiguities in the proceedings.
• Pre-trial settlement saves time and allows business relations to be preserved.
• The counterparty's response or its absence becomes written evidence of the party's position.
• Correspondence and the claim help to confirm compliance with the mandatory procedure.
• The documents collected at the pre-trial stage are used when the dispute is considered in arbitration.

Arbitration clause: how to draft it

An arbitration clause is a contract term under which the parties agree in advance that a dispute will be considered not by a state court but by a specific arbitration. In Kazakhstan these are permanent arbitration institutions, ad hoc arbitrations and international arbitration institutions, if the parties have referred to them. The clause works only when it makes it unambiguously clear where to go for resolution of the conflict. Otherwise the court may find it unenforceable and consider the dispute itself.

The main reason for unenforceability is uncertainty. Wording such as "the dispute is resolved in arbitration", "at the location of the claimant", "in a competent body" names neither a specific arbitration nor the procedure for its formation. It is impossible to establish which body should consider the case, and the defendant cannot object to jurisdiction. The state court decides that the will of the parties is not expressed and accepts the case for proceedings.

The second reason is internal inconsistency. If the contract simultaneously specifies a state court and an arbitration, or names two different arbitrations without priority, it is unclear which condition to apply. References to rules that are not attached to the contract or did not exist at the time the transaction was concluded also create risk. A party interested in delay may challenge the clause and move the dispute to a state court.

• the exact name of the arbitration — a permanent one or a specific international institution with reference to its rules
• the place of arbitration and the language of the proceedings
• the number of arbitrators and the procedure for their appointment, including the method of forming the panel
• the range of disputes covered by the clause: contractual, pre-contractual, related to performance and termination
• the applicable substantive law and the procedure for allocating the costs of the proceedings
• a condition that the arbitral award is final and binding on the parties

The main mistake in such cases is to file a claim without checking two points: whether the pre-trial claim procedure has been observed and whether the arbitration clause is enforceable. If the clause does not allow a specific arbitration to be identified, the court may find it unenforceable and consider the dispute itself, and then the dispute remains within state jurisdiction.

Representation in arbitration: features of the process

Arbitration in Kazakhstan is a tribunal procedure where a business dispute is heard by arbitrators chosen by the parties. The parties themselves form the panel: the number of arbitrators, the appointment procedure, and qualification requirements. If the arbitrators cannot be agreed, an appointment mechanism applies through a competent authority or an arbitration institution whose rules are chosen in the agreement. Legal services in arbitration begin with an analysis of the arbitration clause and the selection of a panel capable of understanding the industry specifics of the dispute.

The procedure is built around written positions: the statement of claim, the response, objections, evidence and closing submissions. There is no strict procedural form, so the outcome is determined by written argument. The rules of the specific arbitration institution set the procedure for exchanging documents and holding hearings, and any deviation from them creates risk for a party. Positions are prepared on the basis that the award will be scrutinised during enforcement.

Enforcement and setting aside of an arbitral award

Once an arbitral award is rendered (by a permanent arbitration institution or an ad hoc arbitration), it must be enforced. If the debtor does not perform voluntarily, the creditor applies to a state court for a writ of execution. The court reviews the award on formal grounds and, if there are no obstacles, issues the writ, which is then passed to a court enforcement officer. Compulsory enforcement follows: freezing of accounts and property, travel restrictions and other measures.

An arbitral award may be set aside only on the exhaustive grounds listed in Article 52 of the Law of the Republic of Kazakhstan on Arbitration: invalidity of the arbitration agreement, incapacity of a party, improper notification of a party about the proceedings or inability to present explanations, non-compliance of the composition of the tribunal or the procedure with the parties' agreement and the law, exceeding the scope of the agreement, contradiction with the public order of Kazakhstan, and non-arbitrability of the dispute. The court does not review the case on the merits. If there are no grounds, the award stands and refusal of enforcement is not permitted.

Refusal of enforcement is likewise possible only on exhaustive grounds similar to those for setting aside. These are supplemented by cases where the dispute cannot by law be the subject of arbitration or the award has not yet become binding on the parties. The court examines these circumstances and issues a reasoned ruling, which may be appealed to a higher instance.

• The writ of execution is issued by a state court upon the creditor's application.
• The grounds for setting aside and for refusal of enforcement are listed in the law and are not subject to broad interpretation.
• The court does not review the award on the merits, but only compliance with procedure and public order.
• An award of the Court of the Astana International Financial Centre is rendered in English under its rules.
• A ruling refusing enforcement may be appealed to a higher court.
• Compulsory enforcement is carried out by a court enforcement officer.

Foreign arbitral awards in Kazakhstan

A foreign arbitral award is enforced in Kazakhstan under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which the republic is a party. The creditor files an application for recognition and enforcement of the award with the competent court at the location of the debtor or its property, attaching a certified arbitral award and the agreement on which the dispute arose. Documents from a foreign arbitration are filed duly certified and with a translation into Kazakh or Russian; the certification requirements depend on the country where the award was rendered. The court then reviews the award on formal and limited grounds for refusal, and does not re-examine the dispute on the merits.

The review covers the validity of the arbitration agreement and the capacity of the parties, compliance with the procedure for notifying the party against whom the award was rendered, whether the subject matter of the dispute fell within the terms of the agreement, whether enforcement contradicts the public order of Kazakhstan, and whether the award has ceased to be binding in the country where it was rendered. The grounds for refusal are construed narrowly, and the burden of proof lies with the party objecting.

• establishing the validity of the arbitration agreement and its applicability to the dispute
• verifying that a party was properly notified of the proceedings and had the opportunity to present objections
• assessing whether the composition of the tribunal and the procedure complied with the terms of the agreement
• determining whether the award has ceased to be binding or has been set aside in the country where it was rendered
• monitoring compliance of enforcement with the public order of Kazakhstan
• applying interim measures in the form of freezing assets and prohibiting disposal of property

Corporate disputes lawyer: which conflicts reach the court

Corporate conflicts in an LLP rarely begin as a dispute for its own sake: usually behind them lie a loss of control, a dispute over profit distribution or an attempt to squeeze out a participant. A corporate disputes lawyer works with the situation before it escalates: reviewing the charter, minutes of meetings, transactions with participatory interests and the partnership's internal documents. This makes it possible to understand whether the client's position has a legal basis and what evidence needs to be gathered.

Challenging decisions of participants' meetings is the most common subject of proceedings. A decision may be declared invalid if the meeting was held in breach of the convening, quorum or voting procedure, and a participant was not notified. Restoring corporate control requires obtaining the partnership's documents: minutes, the register of participants, accounting records and contracts.

Dilution of a share occurs through additional contributions, revaluation of property or transactions with a share in favour of third parties. A lawyer specialising in corporate disputes assesses each action for breach of the pre-emptive right and the requirements of the charter, after which either a claim to have the transaction declared invalid or a claim to restore the position that existed before the breach is filed.

• Review of the charter, minutes and register of participants of the partnership
• Challenging decisions of the general meeting of participants of an LLP
• Protection of a share in the case of additional contributions and transactions with a share
• Recovery of the partnership's documents through the court
• Disputes over a participant's withdrawal and settlement of the share
• Expulsion of a participant for breach of duties

Corporate disputes: claims and evidence

A corporate dispute in a Kazakhstan court is a claim to challenge a decision of the general meeting of participants of an LLP, to have a transaction declared invalid, to recover distributed net income, to compel the buyout of a participant's share and payment of its value, or a claim against the director for compensation of losses. The claim is formulated in relation to the breach: to declare the decision or transaction invalid and apply the consequences, to recover losses, to oblige the partnership to undergo state re-registration when the composition of participants changes. The claimant is a participant of the LLP, the LLP itself, a creditor or another person whose right has been infringed by the contested decision or transaction.

Where the dispute is heard — breach of the Law of the Republic of Kazakhstan on Limited and Additional Liability Partnerships, the defendant is the partnership itself, and not only the director or an individual participant. In disputes challenging a meeting decision, the claimant must prove that they did not participate in the meeting or voted against, and that the decision infringed their rights or caused them losses.

Evidence is built on written documents: the minutes of the general meeting, notices of convening, the charter of the LLP, a certificate of state registration of the legal entity and information on the composition of participants, accounting and banking documents, contracts, expert opinions. If the documents are held by the partnership, an application for their recovery is filed in court. An expert examination is ordered on questions of valuation of the share, the amount of losses or the authenticity of a signature in the minutes.

• compliance with the procedure for convening and holding the general meeting;
• the existence of a quorum and the correct counting of votes;
• compliance of the contested decision with the charter of the LLP and the law;
• whether the claimant's rights and legitimate interests have been infringed by that decision;
• whether the contested transaction was concluded on behalf of the LLP by an authorised person;
• the existence and amount of losses caused to the partnership or the participant.

The list of claims depends on the nature of the breach; documents held by the partnership are requested through the court.

Recovery of damages from the director

Recovery of damages from the director in Kazakhstan is based on the general rules on compensation for damage caused to a legal entity by the actions of its officer (Article 9 of the Civil Code of the Republic of Kazakhstan). The director is obliged to act in good faith and reasonably in the interests of the partnership, so the basis of the claim is his culpable decisions that led to the loss of the company's property. Such disputes are heard by specialised interdistrict economic courts, and in Almaty — by the city economic court. There may be several defendants if the decision was taken collectively or the transaction was approved by the board of directors.

Typical situations: a bad-faith transaction — disposal of liquid assets below market price, acquisition of an asset at an inflated price, gratuitous transfer or forgiveness of debt; a related-party transaction without the required approval of the general meeting or supervisory board, where the director acted in his own interests or in the interests of an affiliated person; withdrawal of assets through a chain of formally independent transactions, where money or property passes to controlled structures and is not returned to the partnership.

• Related-party transactions concluded without approval of the partnership's authorised body
• Disposal of property at a price below market or acquisition of assets at an inflated price
• Gratuitous transfer of funds, forgiveness of debt, suretyship without counter-performance
• Withdrawal of assets through controlled companies and subsequent cessation of the counterparty's activities
• Valuation report, primary documents and bank statements as confirmation of the amount of damages
• Causal link between the director's decision, the loss of property and the losses incurred by the partnership

Mediation and judicial conciliation

It is not always advantageous to take an economic dispute all the way to a court decision: the proceedings take time, require proof and carry the risk of losing. Where the counterparties have maintained working relations and the subject of the dispute comes down to a monetary claim or the terms of a contract, conciliation allows working capital to be returned faster and business reputation to be preserved. In Kazakhstan, economic disputes are heard by specialised interdistrict economic courts, and conciliation is possible both before filing a claim and at any stage of the proceedings.

The legislation of the Republic of Kazakhstan on mediation and the Civil Procedure Code allow two similar procedures. Mediation is an out-of-court settlement with the participation of an independent mediator; the parties themselves determine the terms and the procedure for performance. Judicial conciliation is conducted under the supervision of the court, which explains the consequences of the parties' actions and checks whether the agreement infringes the interests of third parties. If an agreement is reached, the parties submit the text of the agreement to the court, and it approves it by a ruling.

• an assessment of the litigation prospects for each claim and objection
• review of the counterparty's financial position and the risks of non-performance
• calculation of mutual obligations, including penalties and interest
• determination of the method and procedure for performing the agreement
• control over the terms prohibiting further claims on the same subject matter
• submission of the agreement to the court for approval, with a review of its compliance with the law

Cost of a lawyer's services in arbitration cases

The cost of an arbitration lawyer's services in Kazakhstan is not tied to a single tariff: it is made up of the nature of the dispute and the volume of work. The key reference point is the value of the claim: the larger the amount claimed, the higher the rate. It is also affected by the venue (a state court, a permanent arbitration or ad hoc arbitration), the number of participants, the volume of documents and the need for expert examinations, translations and travel.

The format of the proceedings changes the structure of costs. The Law of the Republic of Kazakhstan on Arbitration regulates arbitration as the resolution of a dispute by agreement of the parties instead of a state court, so the arbitration fee (registration and case review fees) and the arbitrators' fees are calculated separately here. In a state court, the equivalent role is played by the state duty, which the claimant pays when filing the claim. These payments are usually not included in the lawyer's fee and are paid separately.

The cost of a lawyer's services in arbitration and in an economic court is also affected by the stage: preparing the claim or the response, attending hearings, appealing, enforcement proceedings. Work with evidence is paid for additionally — collecting documents, questioning witnesses, commissioning an expert examination. If the dispute is conducted in another region, travel and transport expenses are taken into account; if the language differs from the language of the proceedings, interpreter services.

• Analysis of the agreement, documents and prospects of the dispute
• Preparation of the claim, response or counterclaim
• Collection and submission of evidence, motions, expert examinations
• Attendance at hearings of a state court or arbitration
• Appealing the decision and work at the enforcement stage
• Advice on choosing between court and arbitration