January 19, 2021
Enforcement of International Arbitration Award
1. Legislative basis
Legally, this issue is regulated both by international treaties ratified by the Republic of Kazakhstan and by the internal regulatory and legal framework.
In particular, among international treaties, the following should be noted without limitation:
– Enhanced Partnership and Cooperation Agreement between the European Union and its Member States, on the one hand, and the Republic of Kazakhstan, on the other (Astana, December 21, 2015);
– Agreement on the procedure for the mutual execution of decisions of arbitration, economic and economic courts in the territories of the member states of the Commonwealth (Moscow, March 6, 1998);
– Treaty on the Eurasian Economic Union (Astana, May 29, 2014) (as amended on 03/15/2018);
– Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters (Minsk, January 22, 1993) (as amended on March 28, 1997). Providing legal protection;
– Convention for the Settlement of Investment Disputes between States and Natural or Legal Persons of Other States (ICSID) (Washington, March 18, 1965);
– European Convention on Foreign Trade Arbitration (Geneva, April 21, 1961);
– Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, June 10, 1958).
Accordingly, the internal regulatory framework mainly includes the following:
– Normative Resolution of the Supreme Court of the Republic of Kazakhstan dated December 13, 2001 No. 21 “On the preparation of civil cases for trial” (with amendments and additions as of 20.04.2018);
– Law of the Republic of Kazakhstan dated April 8, 2016 No. 488-V “On Arbitration” (with amendments and additions as of January 21, 2019);
– Law of the Republic of Kazakhstan dated July 22, 2015 No. 338-V “On Ratification of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters”.
2. Judicial practice
In general, the New York and Washington Conventions mentioned above are of primary importance for the recognition and enforcement of awards of international arbitration courts.
In accordance with Art. III of the New York Convention “Each Contracting State recognizes arbitral awards as binding and enforces them in accordance with the procedural rules of the territory where the enforcement of these awards is requested, under the conditions set forth in the following articles.”
In paragraph 3 of Art. 54 of the ICSID Convention stipulates that “the procedure for the execution of an arbitral award is determined by the laws on the execution of court decisions in force in the state in whose territory such execution is requested.”
In accordance with parts 1 and 2 of Art. 425 of the Civil Procedure Code of the Republic of Kazakhstan, decisions of foreign courts and arbitration tribunals are recognized and enforced in the Republic of Kazakhstan (hereinafter referred to as the RK), if it is provided for by law or an international treaty of the RK, on a reciprocal basis. The conditions and procedure for the recognition and execution of decisions of foreign courts and arbitration tribunals are determined by law, unless otherwise established by an international treaty of the Republic of Kazakhstan. The procedure for the compulsory execution of an arbitral award, the issuance of a writ of execution and the grounds for refusing to issue it are established by Articles 425-1-425-3 of the Civil Procedure Code of the Republic of Kazakhstan.
In accordance with clause 30 of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated July 11, 2003 No. 5 “On a court decision” entry of the decision into legal force, if it is provided by law or an international treaty of the Republic of Kazakhstan. The enforcement of such a decision is carried out at the request of the interested party by a ruling of the court of the Republic of Kazakhstan in accordance with the rules on jurisdiction determined by the Civil Procedure Code at the place of execution of the decision.
The application is usually accompanied by:
– a duly certified copy of the decision for the enforcement of which permission is sought;
– an official document stating that the decision entered into legal force, if this circumstance is not visible from the text of the decision;
– evidence confirming the proper notification of the party or its representative in case of procedural incapacity of the party against whom the decision was made about the process;
– executive document with a mark on the partial execution of the decision, if any;
– in cases of contractual jurisdiction, a document confirming the agreement of the parties on this issue.
The court considering the petition for recognition and permission of the enforcement of the decision is limited to establishing the circumstances under which the enforcement of the decision is possible.
The court shall have the right to refuse to enforce a court decision if the other party, in respect of which permission is requested to enforce the court decision, presents evidence:
– resolution of the dispute by an incompetent court;
– consideration of the case in the absence of a party not notified of the process;
– expiration of the three-year limitation period for presenting the decision for compulsory execution;
– the presence of a previously entered into legal force decision between the same parties, on the same subject and on the same basis”.
From Chapter 3 of the Code of Civil Procedure of the Republic of Kazakhstan, which establishes the rules of jurisdiction, it follows that such petitions are subject to consideration by district and equivalent courts. If one of the parties is an international or foreign organization, then the petition is subject to consideration in the regional (equivalent to it) court. However, until now, the consideration of applications for the recognition and execution of foreign judgments is carried out according to the established practice only by regional courts, and applications for the execution of decisions on investment disputes, in particular ICSID decisions, in which the state is the defendant, are subject to consideration in the city court of Astana.
Execution of foreign court decisions in Kazakhstan is carried out only in the presence of an international agreement: on legal assistance or a multilateral agreement between the CIS countries (in particular, the Chisinau Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Cases of October 7, 2002).
Kazakhstan has not signed many agreements on legal assistance, mainly again with the CIS countries (with Azerbaijan, Turkmenistan, Uzbekistan, Georgia, the Kyrgyz Republic), as well as with Lithuania, the United Arab Emirates, North Korea, Pakistan, Turkey, Mongolia, China, Iran.
In Kazakhstan, there is a fairly clear understanding both in theory and in judicial practice that the execution of foreign judgments in the absence of an international agreement is unacceptable.
Meanwhile, in foreign judicial practice, the execution of foreign court decisions is allowed in the absence of an international treaty, on the basis of the principle of reciprocity.
Thus, as we can see, the stumbling block is the legislatively enshrined principle of reciprocity, which, unfortunately, as follows from the article of M.K. Suleimenov, did not become widespread in Kazakhstan. In particular, as M. Suleimenov notes, “the principle of reciprocity in the execution of decisions of foreign courts at the legislative level in the Russian Federation is not enshrined. Nevertheless, the courts apply this principle. In Kazakhstan, the situation is exactly the opposite. The principle of reciprocity is enshrined at the legislative level, but the courts not only do not apply it, but also do not know about its existence.
After all, how does the text of clause 1 of Art. 425 CPC? And it sounds like this:
“Decisions of foreign courts and arbitration tribunals are recognized and enforced in the Republic of Kazakhstan if it is provided for by the law or an international treaty of the Republic of Kazakhstan on a reciprocal basis”.
What does the word “on the basis of reciprocity” refer to in this text? If to an international treaty, as it should be, then such a link is meaningless, because an international treaty is applied without any reciprocity. If to the law, then these words should stand up to the words “international treaty”.
If we understand that the decision is executed on the basis of reciprocity, if it is provided for by law or international law, then in relation to international treaties, it becomes complete nonsense. There is no reciprocity in the Legal Aid Treaties. Does this text mean that it is about reciprocity, and not the law and international treaties on the basis of which the decisions of foreign courts are executed? Such a conclusion would be too absurd to be taken seriously.
Most likely, the word “or” was omitted here when the Code of Civil Procedure was adopted. It should be, as in the draft Code of Civil Procedure of the Russian Federation: “by an international agreement or on the basis of reciprocity.” That is, apparently, they wanted to include the principle of reciprocity, but could not express it correctly …
Thus, the principle of reciprocity is enshrined in the legislation of Kazakhstan. But neither in the legal literature, nor in judicial practice, he is not even mentioned. Consequently, the task is to introduce into judicial practice the understanding that execution of decisions of foreign courts is permissible even in the absence of an international treaty, on the basis of the principle of reciprocity”.
Also, we draw your attention to the fact that in practice the list of documents required by the Supreme Court in relation to individual decisions may be somewhat wider than the list of documents required by the New York Convention. Thus, “it should be noted that in this norm… we are talking about the documents attached to the requests for enforcement of decisions of both foreign courts and arbitration tribunals, without any distinction. Meanwhile, this list should be different depending on who (the court or the arbitration tribunal) made the decision to be enforced. If the issue concerns the execution of the decision of a foreign court, then the requirement to submit the documents listed in paragraph 30 of NP VS No. 5 is justified, since these documents are directly provided for by a number of international treaties on the provision of legal assistance in civil cases. If a petition for the enforcement of a foreign arbitration award is filed, then the provisions of paragraph 30 of this regulatory order are not consistent with the New York Convention and the Code of Civil Procedure”.
In this regard, it seems necessary to note the following main practical conclusions (in the context of the established judicial practice):
- the basis for appropriate execution in most cases is a specific interstate agreement on legal assistance (it is recommended to make sure that there is one or choose arbitration, the decision of which will be enforceable in all signatory countries of the New York Convention);
- not all courts correctly apply the norms of international treaties (in particular, it is recommended to have documentary evidence of the entry into force of the decision, if this is not visible from the text of the decision itself).
 Kazakhstan acceded to almost all investment and arbitration conventions.