The American Bar Association Rule of Law Initiative (ABA ROLI) is working with the Supreme Court and the Union of Judges of the Republic of Kazakhstan (the national association of judges), to improve the investment climate of the country by providing the judicial system with international experience on investment dispute resolution. The new Civil Procedure Code (CPC), which has been in effect since Jan. 1, 2016, creates a special Investment Board under the Supreme Court to preside over major investment disputes.
In 2016, Investment Dispute Resolution Panels were established both under the Supreme Court and Astana City Court to hear certain investment dispute cases, particularly those involving investor-state disputes. These panels were created to boost investors' trust into national judicial system that ensures that their rights are adequately protected. The creation of investment panels is a new mechanism in Kazakhstan, therefore essential for judges and the legal community to gain international experience and expertise on how these types of cases are considered by international arbitration institutions.
To support these efforts, ABA ROLI, in cooperation with the Supreme Court, conducted the first investment dispute roundtable discussion under the new legislation on Feb. 3, 2017. In her welcoming speech, Justice Aigul Kydyrbayeva, Chair of the Investment Panel of the Supreme Court of the Republic of Kazakhstan said, the “Investment panel has been working for a year now, and this roundtable is designed to discuss the practice of its work.” Thus, this roundtable served as a discussion platform for all parties involved in investment disputes — investors, state bodies and judges — to reflect on the first year of operation of the investment panels, discuss its highs and lows, and prospects for further development. Engaging all investment disputes parties into an open dialogue was crucial for understanding what else can be done for creating a favorable investment climate in the country and ensuring that investors consider Kazakhstan as a potential host country for foreign investments.
The roundtable convened a number of stakeholders within the judiciary and legal profession, including government officials representing the State Revenue Committee, Ministry of Justice and General Prosecutor’s Office; justices of the Supreme Court and judges from the investment panel of Astana City Court; and representatives from international law firms who engage on behalf of companies or the government on this issue, including Baker & McKenzie CIS, Ltd., Dentons and Ernst & Young LLP.
Because Kazakhstan has vast and diverse natural energy resources, both national and international companies involved in the production and marketing of useable and exportable energy had a seat at the table to identify, voice and express their concerns, questions and interests related to the adjudication of investment disputes. Chevron, Karachaganak Petrolium Operating, TengizChevroil, Agip Karachaganak, "ArcelorMittal Temirtau" JSC and AES Kazakhstan were among the discussion. With the investment dispute panels created to ensure greater protection of investors’ rights, it was essential to engage these companies and understand their perception of work of the panels.
During the event, participants discussed issues related to defining what qualifies as “investment disputes,” protecting investors’ rights and how courts in Kazakhstan apply investment dispute legislation during resolution. ABA ROLI’s pro bono legal specialist, Dmitri Evseev, a partner of Arnold & Porter Kaye Scholer LLP and Board Member of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), presented on international norms around investment dispute resolution, clarifying the practice of major arbitration institutions like the International Centre for Settlement of Investment Disputes (ICSID) and the Arbitration Institute of the SCC. Following his remarks, the participants discussed a variety of issues related to adjudication of investment disputes including if the definition of “investment dispute” adopted by the law is taken into consideration when a dispute is being heard at ICSID. Participants also discussed which cases should be considered by each level of the established investment panels: either first instance courts, Astana City Court, or the Supreme Court panels.
Over the course of the round table discussion, participants highlighted a number of recommendations as part of their presentations and remarks. As a result, the Supreme Court will compile and provide these recommendations to relevant governing bodies for further discussion and consideration. Once a consensus is reached on which recommendations are most appropriate, the Supreme Court will post them on their website for further dissemination.
Following the conference, ABA ROLI plans to develop a methodology for the adjudication of investment disputes. This methodology will provide judges with current best practices for application in their work and take into consideration the recommendations developed at this roundtable discussion.
ABA ROLI’s activities under the Kazakhstan Judicial Program are supported by the U.S. Agency for International Development (USAID).
To learn more about our work in Kazakhstan, please contact the ABA Rule of Law Initiative at email@example.com.