KK&P successfully recognised and enforced an International Commercial Arbitration award in Kazakhstan

For almost a year, the firm’s team, represented by Partners Maxim Kulkov and Oleg Kolotilov, Senior Associate Luiza Movsisyan, Associate Nataliya Dyganova and Junior Associate Susanna Papoyan, provided legal support in relation to a dispute on recognition and enforcement of the decision of the International Commercial Arbitration Court (ICAC) at the Chamber of Commerce and Industry of the Russian Federation in Kazakhstan.

In 2020, an arbitration decision was made in favour of the Client against a foreign debtor (a large international construction company) to recover tens of millions of euros, which constituted the amount of an unearned advance payment and accrued interest.

The defendant unsuccessfully attempted to set aside the arbitration award and refused to execute it voluntarily. Together with consultants from Kazakhstan, we filed an application for recognition and enforcement of the ICAC award. However, the court of first instance returned the application, stating that it did not have jurisdiction to consider the application due to the fact that the debtor’s location was not the Republic of Kazakhstan.

In the appellate instance, we managed to convince the court of the illegality of the return on the following grounds:

  1. The court of first instance ignored the provisions of The New York Convention of 1958, despite the fact that the Republic of Kazakhstan is a party to this convention, and that its provisions are mandatory for application;
  2. The registration of the debtor’s parent company outside of Kazakhstan is not an obstacle to satisfying the application for recognition and enforcement of the arbitration award, which can be filed in any jurisdiction in which the debtor has assets;
  3. The courts of Kazakhstan consider disputes involving foreign persons if there is a branch of a foreign person in Kazakhstan, or the foreign person has property in Kazakhstan.

The Court of Appeal found our arguments convincing and found the return of the application unlawful, sending the case for a new trial.

The court of first instance reviewed the previously issued decision and fully satisfied the application for recognition and enforcement of the arbitration award, which will allow the Client to recover the debtor’s assets.