Recognition And Enforcement Of Arbitral Awards In Kazakhstan: A Practical Overview Of The Legal Framework

Kazakh courts generally recognise and enforce foreign arbitral awards straightforwardly. However, the failure to recognise and enforce is often determined by whether the applicant has correctly identified the applicable international treaty (in conjunction with the local law requirements) under which the recognition application should be brought, and whether the procedural requirements within the framework of arbitration have been observed.

An analysis of court practice for the period 2016-2022 reveals a number of persistent errors in legal practice: improper selection of the applicable international instrument, incorrect allocation of the burden of proof, and judicial formulation of additional grounds for refusal outside the exhaustive legal list. The Supreme Court has analysed relevant practice and produced a clarification ¹ addressing a number of the above-mentioned issues in binding guidance to the courts. Despite this, some courts continue to apply the law conservatively, in a manner that is not aligned with contemporary international arbitration practice, which at times undermines the credibility of Kazakhstan’s legal system as arbitration-friendly.

This review sets out practical conclusions for parties considering enforcement proceedings in Kazakhstan for the purpose of (1) avoiding common procedural missteps by looking on the process from the perspective of a Kazakhstani judge and (2) achieving successful recognition and enforcement as well as the actual recovery of funds as a result.

Key Findings

• The New York Convention applies to arbitral awards only. The Chisinau Convention ² (which largely replaced the 1993 Minsk Convention) and the Kiev Agreement ³ apply solely to decisions of state courts of certain post-soviet countries. The same logic applies to the bilateral legal assistance treaties concluded by Kazakhstan with a number of states 4. Conflation of these regimes – a systemic error documented in judicial practice.
• The list of grounds on the basis of which recognition and enforcement of the award may be refused is exhaustive. Courts may not expand it. In proceedings for the recognition of foreign arbitral awards, the New York Convention ⁵ and the European Convention on International Commercial Arbitration of 1961 ⁶ take precedence over the provisions of the Kazakhstani procedural legislation.
• The burden of proving improper notification during arbitral proceedings rests with the party against whom recognition and enforcement of the award is invoked. The applicant is not required to prove proper notification when filing the relevant request with the court, however, may do so, and it is in that party’s interest to collect the relevant evidence in advance.
• The three-year period for enforcing an arbitral award is procedural in nature and does not constitute a limitation period under substantive law. Starting point: the date on which the period for entrance into force. The date of entrance into force may differ from the date of signing of the award or the date on which it was rendered.
• The Supreme Court’s clarifications are a binding guidance currently in force for the courts. It confirmed the priority of the New York Convention over the local procedural law and resolved a number of persistent errors recorded in practice prior to its adoption.

I. Regulatory Framework and Applicable International Instrument

The first question to answer when applying to a Kazakhstani court for recognition & enforcement is which international treaty applies. Everything depends on the following: the documentary requirements for recognition and enforcement, the grounds for refusal, and the method for calculating the deadline for filing the application.

Foreign Arbitral Awards: The New York Convention and the European Convention
The New York Convention of 1958 ⁷ entered into force for Kazakhstan on 18 February 1996. Kazakhstan simultaneously acceded to the European Convention on International Commercial Arbitration of 1961. Recognition of decisions of foreign commercial arbitral tribunals is carried out on the basis of these international treaties: the New York Convention ⁸ establishes an exhaustive list of grounds for refusal; it also ⁹ prescribes the documentary requirements for submission by a party seeking recognition & enforcement.

The provisions of local procedural legislation ¹⁰ apply to the extent that do not conflict with the New York Convention and govern primarily the competent court to consider the relevant motion on recognition & enforcement, time limits for filing such motion and consideration thereof by the court, and the possibility to review the court’s ruling by the higher instance courts. Where the local procedural legislation provides for additional grounds for refusal not contained in the Convention, those grounds do not apply to foreign arbitral awards. Previously, local courts at times refused recognition and enforcement of foreign arbitral awards on the basis that the dispute had already been finally resolved in parallel court or arbitral proceedings between the same parties, concerning the same subject matter and arising from the same grounds, or that such proceedings had been terminated following withdrawal of the claim. The Supreme Court has since expressly clarified ¹¹ that courts may not rely on grounds for refusal that are not provided for in the NY Convention when considering the recognition and enforcement of foreign awards, easing up the recognition and enforcement procedure nowadays.

State Court Decisions of Post-soviet Countries: A Different Regime
Kazakhstani courts frequently applied the Chisinau Convention and the Kiev Agreement instruments designed exclusively for the recognition of state court decisions to awards of commercial arbitral tribunals from Kazakhstani neighboring countries. The confusion is partly understandable: Russia has «arbitrazh courts» – state courts of commercial jurisdiction forming part of the state judicial system which are frequently confused with commercial arbitral tribunals. The Supreme Court’s clarification ¹² eliminated this error by expressly clarifying that the Chisinau / Minsk Conventions and the Kiev Agreement do not apply to the recognition and enforcement of foreign arbitral awards.

Application of an incorrect international instrument is in itself a ground for dismissal of the application: where the parties rely on an inapplicable treaty, the court cannot assess the application against the proper requirements, given the specifics of adversarial nature of civil procedure in Kazakhstan.

Investment Arbitration (ICSID): A Special Regime

The Washington Convention of 1965 ¹³ entered into force for Kazakhstan on 21 October 2000. The Convention ¹⁴ obliges a Contracting State to recognise ICSID awards and to enforce them as final decisions of a national court without any additional prerequisites. The cases of AES Corporation, Tau Power B.V. ¹⁵ and Caratube International Oil Company ¹⁶ confirmed that, where a copy of the award certified by the ICSID Secretary-General is provided, courts grant the application without difficulty.

In practice, however, Kazakhstan has frequently preferred to settle disputes without allowing them to reach the enforcement stage in Kazakhstan; examples include the AIG Capital Partners, Rumeli Telecom, Aktau Maritime Trade Port, and Stati cases ¹⁷.

Investment arbitration is a distinct field to which a separate dedicated series of Unicase publications will be devoted.

II. Procedure and Documents

The local procedural legislation ¹⁸ governs the specifics of filing applications for compulsory enforcement of arbitral awards. Judicial practice has revealed three characteristic issues:

1. an improper court response to documents missing in the application file;
2. formulation of additional grounds for refusal outside the exhaustive legal list; and
3. review of the case on its merits.

The List of Documents is Closed

List of mandatory documents ¹⁹
The application²⁰ shall be accompanied by:
(1) the duly authenticated original arbitral award or a duly certified copy thereof;
(2) the original arbitration agreement or a duly certified copy thereof;
(3) a duly certified translation into Kazakh or Russian, of the above-mentioned documents if those are in another language.

The list is exhaustive. The court may not require other documents. Prior to 2023, the previous comments of the Supreme Court ²¹ effectively expanded this list, in particular by requiring the attachment of a certificate confirming that the award had entered into force. The latest Supreme Court’s clarifications²² expressly noted that this requirement had no legal basis.

In practice, a number of courts even now additionally request documents not required by the NY convention, fore example evidence of service of the arbitral award on the party against whom the recognition&enforcement is sought. This requirement does not follow from the NY Convention; however, to avoid return of the application, applicants are advised to attach such evidence.

The question of what constitutes “duly certified” is directly addressed by neither the local procedural law nor the NY Convention. Analysis of judicial practice yields a working standard for awards rendered in Kazakhstan: for a permanent arbitral institution, a copy certified by an head of the institution is sufficient; for ad hoc arbitration, notarisation is required. For foreign arbitral awards, legalisation or apostille requirements must be taken into account: if the country of issuance is a party to the 1961 Hague Apostille Convention ²³, an apostille suffices; for states that have not acceded to that Convention, consular legalisation is required.

Missing Documents: Return, Not Refusal

The local procedural legislation ²⁴ contains an exhaustive list of grounds for refusing to issue a writ of execution as a result of foreign award’s recognition & enforcement. Non-attachment of required documents is not among them. Where the application package is incomplete, the court is required to return the application to the applicant at the acceptance stage, rather refuse the recognition & enforcement . The Supreme Court’s clarifications ²⁵ confirmed this position expressly.

The distinction is fundamental: a ruling refusing the application may prevent the applicant from re-filing on the application in relation to the same award. Return allows the defect to be remedied and the application to be re-filed. Prior to 2023, some judges issued rulings of refusal, treating the absence of documents as a statutory ground for doing so ²⁶. This, however, constitutes an incorrect application of the law.

Review on the Merits Prohibition

This prohibition ²⁷ flows from the exhaustive character of the list of grounds in the NY Convention ²⁸ for refusing recognition & enforcement of the award, as explained in the UNCITRAL Secretariat Guide ²⁹. The court should examine procedural aspects only: whether the filing procedure has been observed and whether any of the grounds for refusal on the closed list are present. It lies outside the court’s authority to assess whether the arbitral tribunal correctly established the facts, correctly applied substantive law, or whether the amount awarded is justified.

III. Grounds for Refusal

Structure of the Grounds: Who Proves What
The NY Convention ³⁰ divides the grounds into two groups. The first comprises grounds that the debtor must establish independently:

1. Invalid agreement or incapacity;
2. No notice or opportunity to present the case;
3. Award exceeds submission scope;
4. Improper tribunal or procedure;
5. Award non-binding or annulled.

The second comprises public policy and non-arbitrability, which the court may consider on its own initiative, independently of the parties’ submissions. The parties are nevertheless not precluded from presenting arguments and evidence to the court on the grounds in the second group.

This allocation is expressly set out in the text of the NY Convention ³¹: recognition may be refused… at the request of the party against whom it is invoked, and only if that party furnishes the relevant proof. This approach is consistent with the adversarial principle enshrined in the civil procedural legislation in Kazakhstan as confirmed by the Supreme Court’s clarifications ³².

This allocation was systematically disregarded in practice: courts placed on the creditor the burden of proving proper notification, whereas it is the debtor who bears the burden of proving improper notification.

Improper Notification During Arbitral Proceedings

In practice, representatives of debtors frequently persuade Kazakhstani courts to apply Kazakhstani postal legislation to the issue of notification. This argument has no basis in law: the standard for proper notification during arbitral proceedings is determined by the rules applicable to those proceedings - the law of the seat of arbitration, the contract itself, and the rules of the arbitral institution. Kazakhstani postal legislation is not the applicable standard for the foreign lex arbitri. A party participating in arbitration must ensure that notifications comply with precisely requirements of Kazakhstani legislation as well to avoid challenged at the recognition & enforcement stage; this frequently entails obtaining acknowledgment of receipt.

Points to note. The party seeking recognition & enforcement is not required to prove proper notification when filing the application. However, building an evidentiary file in advance significantly reduces the risk of a successful challenge: postal tracking numbers, delivery confirmations, electronic correspondence with the respondent, and a letter from the arbitral institution confirming all notifications sent.

Public Policy: Narrow InterpretationThe court may consider public policy issues on its own initiative upon an application by a party, but the court must refuse recognition & enforcement of award on that applies ground only in exceptional cases. In one of the decisions examined, ³³ the court provided the most detailed definition of public policy found in the analysed case law.

Definition of public policy: the Supreme Court’s position
The public policy of the Republic of Kazakhstan is to be understood as the fundamental, core principles and norms governing the economic and social order as enshrined in the Constitution and national legislation. An arbitral award may be held to violate public policy only if its enforcement entails actions directly prohibited by law, causes harm to the sovereignty or security of the state, or affects the interests of large social groups.

The debtor in that particular case did not submit evidence on any of the listed criteria, and the public policy plea was rejected. The Supreme Court’s clarifications ³⁴ indicated that the subject of review is not whether the content of the arbitral award is consistent with public policy, but whether enforcement of the award itself would violate the foundations of the legal system of Kazakhstan.

Competing Decision: Procedural Legislation vs New York Convention

The local procedural legislation ³⁵ provides for an additional ground for refusing recognition & enforcement: the existence of an enforceable decision on the same dispute between the same parties. The NY Convention contains no such ground. The Supreme Court’s clarifications ³⁶ resolved this issue: since the NY Convention takes precedence, this ground does not apply to foreign arbitral awards. The existence of a Kazakhstani judicial act on the same subject matter does not automatically block recognition & enforcement. However, arguments concerning preclusion by a previously rendered Kazakhstani act (the principle of res judicata) may be characterised as an argument of public policy violation and examined by the court in that capacity.

IV. Time Limits

The period for presenting foreign arbitral awards for compulsory enforcement is three years. Prior to 2023, a conflict existed: one provision of the local procedural legislation ³⁷ calculated the period from the moment the foreign arbitral award or judgment of a foreign court entered into legal force, while another ³⁸ with respect to Kazakhstani arbitral awards calculated it from the expiry of the period for voluntary compliance. SC NR No. 3 ³⁹ resolved the discrepancy: three years from the date of expiry of the period for voluntary compliance, for all arbitral awards without exception.

Starting Point: The Law of the Seat of Arbitration and the Terms of the Award

For foreign arbitral awards, the moment of entry into legal force, and consequently the commencement of the period for voluntary compliance is determined by the law of the seat of arbitration, not by Kazakhstani legislation. The award itself typically indicates the moment at which it becomes final and binding; the rules of the relevant arbitral institution also frequently contain relevant provisions.

For domestic Kazakhstani arbitral awards, the Arbitration Law ⁴⁰ provides that the award enters into force on the date of its signing by the arbitrator or arbitrators, and not on the date of its «rendering» or «pronouncement». These dates may differ.

This distinction was reflected in judicial practice: in a 2022 case ⁴¹ involving a domestic Kazakhstani arbitral award, the applicant relied on the date of rendering, whereas the three-year period began to run from the later date of signing. As a result, the enforcement proceedings initiated by a bailiff were declared unlawful in administrative proceedings. It is also important to note that even where a court ruling recognising the award and issuing a writ of execution has entered into force, the writ itself must be presented for enforcement within the three-year period.

A costly mistake (in respect of domestic Kazakh arbitral awards). Applicants frequently rely on the date of rendering of the award stated in the heading, without verifying the date of signing in the operative part. Under the local Arbitration Law, the three-year period begins to run from the date of signing. For foreign arbitral awards, the applicable moment of entry into force must be established under the law of the seat of arbitration.

Restoration of a Time Limit: A High Standard
The court may restore a missed time limit of three years for enforcement where there are valid grounds ⁴². The three-year period is more than sufficient for the preparation of an application, and courts accordingly apply a high standard when assessing the validity of the grounds. We recommend applying for recognition and enforcement well in advance: the court may return the application for remediation of defects or request additional materials, which takes time, while the period continues to run.

V. Cassation Appeal

Following the adoption of amendments to the local procedural legislation, cassation appeal against judicial acts in cases concerning the recognition and enforcement of foreign arbitral awards has become a right of the parties, rather than a matter subject to discretionary admission. Parties may file a cassation appeal directly with the cassation court, without a preliminary filter.

The ground for appeal with a higher instance court is a material violation of substantive or procedural law resulting in the rendering of an unlawful judicial act ⁴³. In the context of recognition & enforcement cases, material violations include: incorrect identification of the applicable international treaty; expansion of the closed list of grounds under the NY Convention⁴⁴; and violation of the prohibition on review of the merits. Cases concerning the recognition and enforcement of foreign awards are already being reviewed under the new cassation procedure.

One should remember though, that the outcome of cassation proceedings continues to depend largely on the quality of the arguments advanced at first instance and, where applicable, on appeal.

VI. Practical Conclusions

1. Identify the Applicable International Instrument Before Applying to the Court
It is necessary to establish whether the act to be recognised is a decision of a state court or of a commercial arbitral tribunal. In the former case, the existence of an international treaty between Kazakhstan and the relevant state must be verified. In the latter, it must be confirmed that the country of issuance is a party to the NY Convention, and documents must be prepared in accordance with the standard it prescribes. If the country of award rendering is also a party to the European Convention on International Commercial Arbitration of 1961, the provisions of that Convention should be prioritised. Selection of an incorrect instrument creates procedural risks that are extremely difficult to remedy at a later stage.

2. Documents: Form Matters
The application for recognition & enforcement must be accompanied by the following documents: an original or copy of the award; an original or notarised copy of the arbitration agreement; and a certified translation of these documents. For states party to the Hague Apostille Convention, an apostille is sufficient; for other states, consular legalisation is required. Failure to submit mandatory documents or defects in their form results in return of the application, not refusal of recognition; however, the three-year period continues to run in the interim.

3. Time Limits: Verify the Law of the Seat of Arbitration
The three-year period runs from the expiry of the period for entrance into force. For foreign arbitral awards, the moment of entry into force is determined by the law of the seat, not by the Kazakhstani Arbitration Law. The award itself or the rules of the applicable arbitral institution will typically contain relevant guidance. It is advisable to file the application well in advance of the expiry of the period.

4. Build an Evidentiary File on Notification from the Outset
The burden of proving improper notification rests with the debtor. Nevertheless, the creditor is advised to attach evidence of proper notification to the application at the time of filing and to be prepared to submit counter-arguments with supporting evidence at the hearing - this will reduce the risk of the application being returned and will simplify examination of the case.

5. Bear in Mind the Prohibition on Review of the Merits
When examining a recognition application, the court may not re-evaluate the facts established by the arbitral tribunal or the correctness of its application of substantive law. Any departure from these limits constitutes an independent procedural violation and a ground for quashing the judicial act. Such violations should be submitted in the future appeal(s).

Footnotes

1. Normative Resolution of the Supreme Court of Kazakhstan No. 3 of 2 November 2023 “On the Application by Courts of Legislation when Examining Applications for the Recognition and Enforcement of Decisions of Foreign Courts and Arbitral Tribunals”.

2. Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters (Chisinau Convention), 7 October 2002. Replaced the 1993 Minsk Convention on Legal Assistance.

3. Agreement on the Procedure for Resolving Disputes Connected with the Conduct of Economic Activity (Kiev Agreement), 20 March 1992.

4. Currently there are more than 12 treaties of such nature.

5. Article 5 of the New York Convention 1958.

6. European Convention on International Commercial Arbitration, Geneva, 21 April 1961. Kazakhstan acceded simultaneously with the New York Convention.

7. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), New York, 10 June 1958. Entered into force for the Republic of Kazakhstan on 18 February 1996.

8. Article 5 of the New York Convention, read together with Article 9(2) of the European Convention on International Commercial Arbitration of 1961.

9. Article 4 of the New York Convention.

10. Articles 501–504 of the Civil Procedure Code of the Republic of Kazakhstan (CPC).

11. Paragraph 44 of SC NR No. 3.

12. Paragraph 6 of SC NR No. 3.

13. Convention on the Settlement of Investment Disputes between States and Nationals of Other States (Washington Convention, ICSID), Washington, 18 March 1965. Entered into force for the Republic of Kazakhstan on 21 October 2000.

14. Article 54 of the Washington Convention.

15. AES Corporation and Tau Power B.V. v. Republic of Kazakhstan, ICSID Case No. ARB/10/16.

16. Caratube International Oil Company LLP and Mr. Devincci Salah Hourani v. Republic of Kazakhstan, ICSID Case No. ARB/13/13.

17. AIG Capital Partners Inc. and CJSC Tema Real Estate Company v. Republic of Kazakhstan, ICSID Case No. ARB/01/6; Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16; Aktau Petrol Terminal Private Company v. Republic of Kazakhstan; Ascom Group S.A. and others v. Republic of Kazakhstan (Stati).

18. Article 503 CPC; list of acts subject to recognition — Article 501 CPC.

19. Article 503(2) CPC and Article 4 of the New York Convention.

20. For recognition & enforcement

21. Normative Resolution of the Supreme Court of the Republic of Kazakhstan No. 5 of 2003 (superseded in the relevant part upon adoption of SC NR No. 3 of 2023).

22. Paragraph 41 of SC NR No. 3.

23. Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Hague Apostille Convention), The Hague, 5 October 1961.

24. Article 255 CPC.

25. Paragraphs 39–40 of SC NR No. 3.

26. Sub-paragraph 1, paragraph 1, Article 255 CPC.

27. Article 503, paragraph 8, CPC.

28. Article 5 of the New York Convention.

29. UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958). United Nations, 2016.

30. Article 5, paragraphs 1 and 2, of the New York Convention.

31. Article 5(1) of the New York Convention.

32. aragraph 30 of SC NR No. 3, with respect to sub-paragraph 1, paragraph 1, Article 255 CPC.

33. Case concerning the recognition of a decision of a foreign commercial arbitral tribunal. Supreme Court of the Republic of Kazakhstan, 2021. Parties not disclosed.

34. Paragraph 46 of SC NR No. 3.

35. Sub-paragraph 1, paragraph 1, Article 255 CPC.

36. Paragraph 44 of SC NR No. 3.

37. Article 501 CPC.

38. Article 253 CPC.

39. Paragraph 47 of SC NR No. 3.

40. Law of the Republic of Kazakhstan “On Arbitration” of 8 April 2016 No. 488-V, Article 45, paragraph 3.

41. Case concerning the declaration of unlawfulness of enforcement proceedings under a domestic Kazakh arbitral award. Examined in administrative proceedings, 2022.

42. Paragraph 3, Article 501, CPC.

43. Paragraph 5, Article 438, CPC.

44. Article 5 of the New York Convention.

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.