Jurisdictional Crossroads: Administrative Justice In Disputes With Authorities

The entry into force of the Administrative Procedural and Process-Related Code of the Republic of Kazakhstan (APC) marked one of the most significant legal reforms of the past decade. The code not only transformed the interaction between the state and the private sector, but also reshaped the very architecture of judicial protection in the public-law sphere. At the jurisdictional crossroads between civil procedure, administrative law, the administrative offences institution, and arbitration a new model of justice has emerged. This model is aimed at balancing public authority and private entities and may be effectively relied upon by both domestic and foreign investors.

1. A Shift in the Approach to Disputes with State Authorities

Prior to the adoption of the APC, public-law disputes involving state authorities were adjudicated under the Civil Procedure Code (CPC). This approach did not fully take into account the specific nature of administrative powers and the institutional imbalance between the parties, while judicial review of discretionary decisions of public authorities remained limited. As a result, the effectiveness of legal protection for individuals and businesses in their relations with the state was diminished.

The adoption of the APC in 2020 established an independent system of administrative justice, based on enhanced judicial scrutiny of the actions of public authorities, the principles of trust in private parties, proportionality, the active role of the court, and restrictions on administrative discretion. The reform conceptually separated public-law disputes from civil litigation and significantly strengthened the effectiveness of judicial protection.

2. Specific Features of Dispute Resolution under the APC

It should be noted that, in practice, difficulties still arise in distinguishing between the appropriate forums for dispute resolution. The key differences among the various courts and the specific features of proceedings under the APC are set out below.

One of the key innovations introduced by the APC was the formal recognition of the concept of an "administrative procedure" as a unified process encompassing the entire cycle of interaction with a state authority. This cycle includes the consideration of an application (or the initiation of proceedings by the authority itself), the adoption of a decision, and its implementation, including decision-making under simplified procedures. In other words, an administrative procedure covers virtually any activity of a state authority in which it adopts a decision by exercising its statutory powers and discretion, where such decision affects the operational or other activities of a person. Examples include the establishment or modification of tariffs of a natural monopoly entity, the consideration of a license application, the conduct of an inspection, and the preparation of results of such an inspection.

Applicant

The most apparent and, as a rule, principal participant in an administrative procedure is the applicant, i.e., the person who initiates the procedure (for example, by submitting an application for a license) and in respect of whom an administrative act is adopted. At the same time, the status of "applicant" may also arise where the procedure is initiated by the state authority itself. For instance, in the case of an unscheduled inspection, the person in respect of whom the procedure is conducted and an administrative act is issued is likewise considered a participant in the administrative procedure, despite the fact that the applicant did not initiate the procedure.

A distinctive feature of administrative procedures and the APC is that the applicant, as a participant in the procedure, is vested with a range of procedural rights. A violation of these rights may serve as grounds for challenging administrative acts, as well as the actions or inaction of state authorities. Among the key rights ensuring the proper conduct of an administrative procedure are the following:

• the right to be heard prior to the adoption of a decision;
• the right to access the materials of the administrative case;
• the right to be notified of, and to review, the adopted administrative act; and
• the right to submit evidence and to participate in its examination.

Interested Party

Particular attention should be paid to the status of an "interested party" in an administrative procedure, i.e., a person whose rights or lawful interests may be affected by an administrative act or by the actions or inaction of a state authority ². The practical value of the APC lies in the fact that an interested party generally enjoys a procedural standing comparable to that of the applicant (subject to certain exceptions) and, where appropriate grounds exist, may independently bring a claim before an administrative court.

In practice, based on publicly available data, including information from the Judicial Cabinet system (unified electronic information service of judicial authorities of Kazakhstan), the recognition of interested-party status often becomes a matter of dispute. Where the link between the challenged administrative act or the actions (or inaction) of a state authority and the claimant's rights or lawful interests is insufficiently substantiated, the court may refuse to recognise such status. In such cases, the claim may be returned, and the dispute may be excluded from the scope of administrative adjudication. In similar situations, state authorities frequently raise objections to the administrative court's jurisdiction at the preliminary hearing stage, arguing, inter alia, that the claimant is not the addressee of the administrative act. The complexity of this issue is compounded by the absence of exhaustive statutory criteria for determining the "sufficiency" of an interest. Consequently, the quality of legal argumentation and the evidentiary basis is of decisive importance. At the same time, guidance from the Supreme Court is gradually shaping more consistent approaches to this category of cases, making it essential to take current judicial practice into account and to monitor its further development.

3. Situations Involving Multiple Forums for Dispute Resolution

In practice, we frequently encounter situations in which a client has several potential avenues for resolving a dispute, including recourse to:

• civil courts;
• administrative courts; or
• arbitration.

Such jurisdictional crossroads may arise in the event of breaches of obligations under the following types of instruments:

• investment contracts concluded under previously applicable regulatory regimes (i.e., outside the current framework established by the Entrepreneurial Code);
• investment agreements;
• intergovernmental agreements;
• subsoil use contracts; and
• other agreements of a similar nature.

The selection of the appropriate dispute resolution mechanism is a cornerstone of legal strategy and of achieving a favorable outcome. This decision is made on a case-by-case basis and takes into account, inter alia, the following factors:

• the arbitrability of the dispute and the possibility of recognition and enforcement of a (foreign) arbitral award;
• the desired remedy, such as annulment of an administrative act, one-time recovery of damages, or recognition of a right; and
• procedural and practical considerations, including timelines, confidentiality, evidentiary standards, expert evidence, the language of the proceedings, and the seat or venue of the dispute.

At the same time, it should be borne in mind that, under certain circumstances, a dispute may fall within the jurisdiction of administrative courts under the APC. The choice of this forum is often driven by a number of procedural advantages that may be strategically leveraged, some of which are outlined below.

4. Reasons for the Effectiveness of Administrative Courts

a. The Principle of Priority of Rights and the Framework of Administrative Discretion

The APC establishes the principle of administrative discretion: a state authority is entitled to choose among several possible decisions within the scope of its powers. However, the boundaries of such discretion are defined by law, and any actions (decisions) that exceed these boundaries are subject to judicial review and may be annulled.

The court examines:

• the conformity of the authority's actions with the purpose of its powers under the law;
• compliance with the principle of proportionality (also recognised as an independent principle); and
• whether the authority has exceeded the limits established by law.

In practice, in the absence of detailed procedural regulation, state authorities often act based on discretion, which may affect the balance of interests in relations with business entities. The APC counters this with important guarantees: alongside the principle of limited administrative discretion, the principle of priority of rights operates, according to which any doubts, contradictions, or ambiguities in the legislation on administrative procedures are interpreted in favor of the participant in the administrative procedure ³.

b. Reconciliation as a Tool of Compromise

One of the most innovative elements of the APC is the possibility of applying reconciliation procedures, including settlement agreements, mediation, and participatory arrangements. The court actively encourages such procedures and assists in their achievement, while the conclusion of agreements is limited by the scope of discretion granted to the administrative authority under the law. Practice of specialised administrative courts confirms that reconciliation is possible where:

• the subject matter of the dispute permits dispositivity;
• the authority possesses the right to choose among alternative solutions; and
• the agreement does not violate the public interest or mandatory legal requirements.

A concluded agreement must be approved by the court. In the event of a breach by the administrative authority, the applicant is not required to initiate a new proceeding, simply requesting an enforcement order is sufficient. In this way, administrative adjudication combines elements of dispositivity with public-law control, ensuring a balance between the interests of the state and the individual.

c. Administrative Courts as a Guarantee of Legal Certainty

A central objective of the APC is the establishment of uniform administrative practice. To this end, the code enshrines the principle of uniformity of administrative procedures and acts: state authorities are required to ensure a consistent approach to case consideration and decision-making, as well as predictable application of the legal norms under which procedures are conducted.

An important complement to this principle is the protection of legitimate expectations: if an unlawful administrative act or unlawful actions (or inaction) occur due to the fault of a state authority or official, such acts should not result in burdensome consequences for the participant in the procedure.

Accordingly, a state authority must not apply different requirements in the course of the same procedure or impose varying criteria on participants without lawful justification. Moreover, for a given participant, previously adopted acts and established procedural practice create reasonable expectations regarding how the authority will act going forward. A sudden change in criteria or approach without proper legal basis may undermine the participant's trust in the procedure and violate the principle of uniformity.

d. Possibility of Recovering Damages

The APC explicitly allows individuals whose rights or lawful interests have been infringed by unlawful acts, actions, or inaction of administrative authorities or officials to claim damages. Such claims can be brought alongside other types of administrative claims (challenging acts, seeking to compel action, seeking performance, or seeking recognition), provided they are causally linked to these claims.

For example, if an akimat unlawfully refuses to grant a company a land plot for a renewable energy project (or unjustifiably delays consideration of the application), the company may lose the ability to commence construction and put the facility into operation on time, as well as forego revenue from electricity sales due to the delay. These losses may be claimed as damages against the akimat, provided there is evidence of a direct causal link between the unlawful refusal (or inaction) and the resulting losses, as well as proof of the amount of the losses.

Conclusion

Administrative courts under the APC are not merely a separate jurisdiction; they represent a fundamentally different approach to resolving disputes between businesses (or individuals) and the state. In such cases, the court examines not only the outcome but also how the authority reached its decision, whether procedural requirements were followed, whether the right to be heard was respected, whether uniformity of approach was observed, whether the limits of discretion were adhered to, and whether doubts are interpreted in favor of the participant.

For this reason, in situations involving jurisdictional intersections, administrative proceedings often provide the most pragmatic choice: they allow the process to be structured around the public-law nature of the dispute and ensure meaningful judicial review of governmental actions for compliance with the law.

If there is uncertainty in selecting the appropriate dispute resolution mechanism, Unicase can assist in classifying the dispute based on the facts and current practice, determining the proper procedural status, and developing an evidentiary and legal strategy designed to mitigate procedural risks and protect the client's rights and interests.

Footnotes

1 Methodological recommendations of the Ministry of Justice on the APC, p2.

Toygonbaev et al., Practical issues of differentiation of disputes considered in civil and administrative proceedings, IS "Paragraph".

2 Roman Podoprigora, Memo explaining the provisions of the APC, Kazakhstan International Bureau for Human Rights and Rule of Law, p. 15

3 LIBRARY OF THE ASTANA CITY COURT, Application of the principles of administrative procedures and administrative proceedings in the Republic of Kazakhstan, Practical Guide, 2023

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.