In Kazakhstan, arbitration as a method for resolving disputes is increasingly gaining popularity; however, businesses traditionally prefer the default option of judicial resolution of disputes.

An increase in interest in arbitration occurred with the establishment and active operation of the International Arbitration Centre at the Astana International Financial Centre (AIFC). AIFC, alongside its special legislation based on English law and its dedicated Court (which is also founded on English law principles but functions as a Kazakhstan court), maintains the International Arbitration Centre (IAC), which operates under the supervision and assistance of the AIFC Court.

Many disputes in the AIFC, or related to its activities, are settled through arbitration under the IAC Rules of Arbitration and Mediation. As legislation permits parties to optin and select the IAC as their dispute resolution forum, numerous parties (particularly foreign entities) also favour arbitration in the IAC as their preferred dispute resolution mechanism.

Businesses in Kazakhstan usually opt for international arbitration (ie, arbitration conducted by well-known arbitral institutions outside Kazakhstan) when a fair and impartial resolution of a dispute involving large sums of money by qualified arbitrators takes precedence over the relative speed and convenience of local judicial processes.

International arbitration is also the preferred choice when a Kazakhstan party needs to enforce an award outside Kazakhstan, as the 1958 New York Convention offers broader opportunities for enforcement compared to treaties for the recognition and enforcement of court decisions signed by Kazakhstan.

International arbitration is quite popular in Kazakhstan’s energy (oil and gas) sector. The significant sums involved in contracts related to various oil and gas activities incentivise parties to select international arbitration as a more impartial and comprehensive dispute resolution mechanism, free from the political influence of the state.

The AIFC International Arbitration Centre is becoming increasingly popular due to a combination of factors – geographical proximity, availability of high-quality arbitrators, the exclusive jurisdiction of the AIFC Court (staffed by English judges) over challenges to and enforcement of IAC awards, and the ease of enforceability of the awards. Other popular foreign arbitration institutions traditionally include the ICC, the LCIA and the Stockholm Institute. The growing presence of Chinese businesses is also contributing to the increasing popularity of CIETAC.

There are no special courts in Kazakhstan which deal with arbitration matters.

Under general legislation in Kazakhstan, the appellate courts of relevant administrative territorial units review challenges against domestic arbitral awards (which may be brought on procedural grounds), while the recognition and enforcement of an arbitral award are subject to the jurisdiction of the courts of first instance.

International arbitral awards can be challenged in Kazakhstan’s appellate courts if:

• the seat of arbitration is in Kazakhstan;
• the dispute is resolved under Kazakhstan law, and the award is issued abroad by a permanent arbitral institution located in Kazakhstan; or
• the dispute is resolved under Kazakhstan law, and the award is issued abroad by a tribunal formed in Kazakhstan.

The first instance courts also have the authority to rule on interim measures, assist in taking evidence, and handle challenges against awards.

Under the AIFC legislation, the AIFC Court has the authority to rule on challenges against arbitrators, tribunal rulings confirming its jurisdiction, interim measures, securing evidence, assistance in taking evidence, challenges against awards, and the enforcement of awards.

The Law on Arbitration of 2016 is the primary legislation governing arbitration in Kazakhstan. It is based on the UNCITRAL Model Law; however, it also contains many provisions not found in the Model Law.

Most notable differences with the Model Law are limitations and prohibitions on arbitrability of certain disputes, as explained in 3.2 Arbitrability.

The Law on Arbitration stipulates certain qualification requirements for arbitrators, as described in 4.1 Limits on Selection.

The AIFC legislation on arbitration (AIFC Arbitration Regulations 2017) is based on the Kazakhstan Constitutional Law on the AIFC, which establishes special jurisdiction and legislation for the AIFC. It is less restrictive than the Kazakhstan Law on Arbitration and implements arbitration principles customary for other international arbitration institutions.

It is worth noting that the AIFC Arbitration Regulations 2017 explicitly specify that the Law on Arbitration is not applicable to arbitration proceedings conducted in the IAC.

There have been no major changes to arbitration laws (including both general and special AIFC legislation) in Kazakhstan over the past year, and no significant changes are currently planned.

The general Kazakhstan Law on Arbitration largely aligns with the provisions of the UNCITRAL Model Law regarding the form of the arbitration agreement. It must be in writing and may be concluded either by exchange of documents between the parties or by tacit consent, such as the claimant’s submission of a claim referencing the arbitration agreement and the respondent’s response without challenging its existence. The limitations and restrictions on arbitrability in the Law on Arbitration mentioned in 3.2 Arbitrability must also be adhered to for the arbitration agreement to be effective.

The AIFC Arbitration Regulations 2017 provisions regarding the arbitration agreement resemble Article 7 of the Model Law.

Generally, in Kazakhstan, disputes that arise from civil law relationships are arbitrable.

The approach to arbitrability varies between the general legislation (Kazakhstan Law on Arbitration) and the special legislation of the AIFC.

The Law on Arbitration states that disputes arising from personal non-property-related civil law relationships are not arbitrable. Disputes relating to bankruptcy also cannot be settled through arbitration. The Law on Arbitration prohibits the inclusion of arbitration clauses in standard, non-negotiable contracts and loan agreements between a commercial entity and an individual; it also bans arbitration of disputes between banks and lending organisations on the one hand and clients who are individuals on the other as well as between governmental, quasi-governmental or monopolistic entities.

Additionally, there are restrictions on including an arbitration clause (for domestic arbitration) in agreements with governmental, quasi-governmental or government-owned entities (holding 50% or more shares) without prior special permission from the relevant authority. Notably, these restrictions do not apply to agreements with foreign parties.

The AIFC Arbitration Regulations 2017 do not include any provisions that limit arbitrability. The general Law on Arbitration does not apply to arbitrations conducted under these Regulations, and its restrictions are not relevant when determining arbitrability within the AIFC.

The national courts are guided by the provisions of the Civil Procedure Code and the Law on Arbitration, and if the arbitration agreement is governed by Kazakhstan law, they will examine the arbitration agreement against the limitations and restrictions of the Law on Arbitration.

The general approach of the courts is that if a contract, on the basis of which a dispute has arisen, contains an arbitration clause, then the courts usually refer the parties to the relevant arbitration institution, respecting the arbitration clause.

Sometimes, this approach can be seen as “overly pro-arbitration” when the courts decline to hear the case and instead send the parties to the arbitration institution, even if the arbitration clause is void, invalid or not enforceable.

Kazakhstan law honours the principle of autonomy and separability of the arbitration agreement, as outlined in both the general Law on Arbitration and the specific AIFC Arbitration Regulations 2017. Even if an otherwise invalid agreement includes an arbitration clause, this clause should be regarded as valid for resolving disputes through arbitration.

Kazakhstan’s general legislation sets certain statutory qualification requirements for arbitrators: a minimum age of 30 years, a university degree, at least five years of professional experience, and a law degree for the tribunal chairperson or sole arbitrator. It also imposes restrictions: active judges, civil servants, members of legislatures, servicemen and servicewomen, and individuals with a criminal record are disqualified from serving as arbitrators.

Additional requirements may be set out in the rules of an arbitral institution. Some arbitral institutions in Kazakhstan restrict the choice of arbitrators to their lists of arbitrators; however, this practice is gradually declining.

The AIFC Arbitration Regulations 2017 do not restrict the parties from selecting arbitrators.

The Law on Arbitration states that if the method chosen for selecting arbitrators fails, an arbitrator must be appointed by the head of a permanent arbitration institution or, in the case of ad hoc arbitration, by the Arbitration Chamber of Kazakhstan (a self-governing union of Kazakhstan’s arbitration institutions).

Under the AIFC legislation, if the parties choose to apply the IAC Rules of Arbitration and Mediation, then the IAC Chairperson has the right to appoint an arbitrator if the parties fail to select one. If the parties do not agree on the procedure for selection at all (including by reference to the Rules of Arbitration), then under the AIFC Arbitration Regulations 2017, an arbitrator can be appointed by the AIFC Court.

The Law on Arbitration does not provide for the court’s authority to intervene in the selection of arbitrators. There have been practical precedents of courts declining to adjudicate disputes relating to challenging the appointment of arbitrators by an improper appointing body.

Under the AIFC legislation, as described in 4.2 Default Procedures, the AIFC Court may take part in the appointing procedure, and also it may play role in case of challenge of an arbitrator.

The Law on Arbitration provides that an arbitrator may be challenged if he/she fails to meet the statutory requirements to be an arbitrator, and if there are grounds for doubts as to the arbitrator’s impartiality and/or competence. The relevant article of the Law on Arbitration lists specific examples of such grounds. Additional grounds for challenge may also be specified in the rules of an arbitration institution.

Under the AIFC legislation, the challenge procedure is provided for in the IAC Rules of Arbitration and Mediation; a party may also apply to the AIFC Court to appeal the results of the challenge of an arbitrator.

The Law on Arbitration states that an arbitrator must be impartial and independent.

It specifies the following specific grounds for challenge:

• if a person closely related to the arbitrator is a party to the dispute or if the arbitrator expects significant benefit or loss based on the case’s outcome;

• if the arbitrator or someone closely related to him/her is the head of a legal entity involved in the dispute, or of a branch or representative office of such an entity, or otherwise represents a party or other individual who might expect significant benefit or loss based on the case’s outcome;
• if the arbitrator acted as an expert or otherwise predetermined his/her position in the dispute or assisted a party in preparing or presenting its case;
• if the arbitrator received or demanded remuneration for the case, not provided for by the law; or
• if the arbitrator unreasonably failed to comply with the arbitration proceedings’ terms.

The Law on Arbitration also requires the arbitrator to disclose any circumstances that could disqualify him/her from serving as an arbitrator.

Under the AIFC legislation, a candidate for the position of arbitrator must submit to the IAC a statement of availability, independence and impartiality, and must disclose any circumstances he/she is aware of that could give rise to justifiable doubts regarding his/her independence or impartiality.

In Kazakhstan, an arbitral tribunal has the authority to determine its own jurisdiction (the competence-competence principle). This also means that if one of the parties challenges the validity or applicability of the arbitration agreement, the tribunal itself is empowered to decide on the matter.

This method is explicitly provided for under the Law on Arbitration and aligns completely with international standards. National courts do not interfere at the initial stage and permit the arbitral tribunal to decide on its own jurisdiction. However, a court may later review the tribunal’s jurisdictional decision if one of the parties seeks to set aside the award.

Judicial Intervention in Jurisdictional Matters

Although an arbitral tribunal is authorised to determine its own jurisdiction, national courts may intervene at a later stage – usually after an award has been issued. If a party believes that the tribunal exceeded its authority or lacked jurisdiction to resolve the dispute, it may apply to the court to set aside the arbitral award. In such cases, the court will assess whether the tribunal’s jurisdiction was correctly established.

Judicial Attitude Towards Intervention

Kazakhstan courts generally adopt a non-interventionist approach and respect the autonomy of arbitration. They do not re-examine the merits of arbitral awards and only intervene in cases of serious procedural violations or clear breaches of due process. This practice enhances the credibility and independence of arbitration. If a claim is filed with a state court in breach of a valid arbitration agreement, Kazakhstan courts typically decline jurisdiction. In such cases, the court will terminate the proceedings and refer the parties to arbitration, thereby upholding the enforceability of arbitration clauses. If an arbitral tribunal rendered an award without having jurisdiction, such an award may also be subject to a set-aside procedure before the court.

In Kazakhstan, the national courts consider issues of jurisdiction only after the arbitral tribunal has expressed its position – either by ruling on jurisdiction in a final award or by declining to hear the case. This approach helps maintain a balance between the autonomy of arbitral proceedings and the supervisory role of the courts.

Under the AIFC legislation, the issue of jurisdiction may be raised by challenging the tribunal and appealing to the AIFC Court against the results of an unsuccessful challenge.

When examining an arbitral tribunal’s jurisdiction, courts in Kazakhstan carry out a comprehensive and independent assessment, applying a de novo standard. They do not restrict themselves to procedural or formal aspects.

In contrast, issues of admissibility – such as whether pre-arbitration procedures were properly followed – are usually reviewed with a more deferential and restrained approach, reflecting respect for the tribunal’s procedural discretion.

Kazakhstan courts do not favour initiating court proceedings in breach of a valid arbitration agreement. If a party submits a claim to a court despite the existence of such an agreement, the opposing party must raise an objection. When the arbitration agreement applies to the dispute, the court will terminate the proceedings. However, if the other party fails to raise an objection, it is deemed to have consented to the court’s jurisdiction.

In practice, courts are typically hesitant to consider disputes covered by an arbitration agreement. This is in keeping with a broader policy of endorsing arbitration and other types of alternative dispute resolution.

Generally, arbitral tribunals in Kazakhstan may not assume jurisdiction over individuals or entities that have not explicitly consented to arbitration, ie, those that are not parties to the arbitration agreement.

In exceptional cases, a tribunal may extend the proceedings to third parties if they do not object to participating or have explicitly consented, for example by signing a written agreement to that effect.

If a tribunal determines that the participation of a third party is permissible, there are no restrictions based on the nationality or jurisdiction of that party. The key requirement is either express consent or a legal connection to the arbitration agreement.

An arbitral tribunal seated in Kazakhstan has the authority to allow a party to apply to the court for an order for interim or preliminary relief. This enables the protection of the party’s rights prior to the final award being issued – for example, by safeguarding assets or prohibiting certain actions.

Under the AIFC legislation, the IAC Rules of Arbitration and Mediation permit the tribunal to issue an order for interim measures; however, interim measures issued by the tribunal are binding on the parties only if they voluntarily comply. To enforce such measures against third parties or to secure compulsory enforcement, court assistance is required.

Types of interim relief that may be granted include:

• an injunction against the disposal of assets;
• an order prohibiting certain conduct by a party;
• preservation of evidence; and
• suspension of contractual obligations on a temporary basis.

Such measures may be granted at the request of a party that demonstrates an urgent need to protect its rights pending the outcome of the arbitration.

In Kazakhstan, national courts play a significant role in granting interim measures to support arbitration proceedings. Parties can apply to the courts either before the start of arbitration or during the process if there is a risk of asset dissipation, loss of evidence or infringement of rights.

Kazakhstan courts may also grant interim relief to support foreign-seated arbitrations. National legislation does not restrict such measures to domestic arbitrations. The key requirements are the existence of a valid arbitration agreement and a well-founded justification for the relief sought.

The concept of an emergency arbitrator is not forbidden under Kazakhstan law and can be included in the procedural rules of a specific arbitral institution.

Under the AIFC legislation, such a mechanism is expressly provided for in the IAC Rules of Arbitration and Mediation.

Decisions made by an emergency arbitrator are binding on the parties, provided that the arbitration is conducted under rules permitting such appointment. However, as with standard interim measures, judicial assistance may be necessary to enforce these decisions.

While courts generally refrain from interfering with arbitral proceedings, they become involved in the enforcement of interim or emergency measures.

Both the Kazakhstan general legislation and the legislation of the AIFC allow for the possibility of ordering security for costs.

An arbitral tribunal has the authority to determine the amount and form of security in relation to claims. If one party fails to provide its portion of the required security within the time set by the tribunal, the other party may advance the full amount. If neither party provides the required security, the tribunal is entitled to suspend or terminate the proceedings, in whole or in part.

The arbitral tribunal may use the security during the proceedings to cover incurred costs. Once the tribunal has ruled on its fees and expenses in the final award, and such part of the award becomes enforceable, the arbitrators are entitled to draw from the security in case of non-payment by the parties in accordance with the award.

Arbitration proceedings in Kazakhstan are governed by the Constitution of the Republic of Kazakhstan, ratified international treaties, the Law of the Republic of Kazakhstan “On Arbitration”, Normative Resolution of the Supreme Court of the Republic of Kazakhstan dated 2 November 2023 No. 3 “On Certain Issues of Application of Arbitration Legislation by Courts” and the arbitration agreement, as well as the rules of arbitration chosen by the parties.

It should be noted that the Civil Procedure Code does not apply in arbitration proceedings, except for issues related to:

• delimitation of competence (if there is an arbitration clause, the court may not consider the dispute unless otherwise provided by law);
• application to the competent court for assistance in securing interim measures and collecting evidence;
• setting aside arbitral awards; and
• recognition and enforcement of arbitral awards.

The exception is the IAC, where arbitration proceedings are governed by the IAC Rules of Arbitration and Mediation approved by the Chairman of the IAC on 1 January 2018 (amended in 2022), as well as the AIFC Arbitration Regulations approved by the resolution of the AIFC Management Council dated 5 December 2017.

Provisions of the Law on Arbitration may not be applied to arbitration proceedings conducted at the IAC.

As a general rule, arbitral proceedings begin with the filing of a claim. Upon receipt, the arbitral tribunal (unless the parties’ agreement or arbitration rules specify otherwise) shall, within ten calendar days, issue a ruling on the initiation of proceedings, notify the parties of the location for consideration, and invite the respondent to submit a written response to the statement of claim. By law, the arbitral tribunal must prepare the case for arbitration within 15 calendar days at the latest, a period that may be extended to one month in exceptional circumstances. The arbitration itself must be concluded within two months from the completion of the case preparation, unless a different timeframe is set by the rules or the parties’ agreement.

A slightly different procedure is established for arbitrations conducted under the AIFC legislation, where the process of arbitrating disputes is more closely aligned with international standards.

In particular, arbitration before the IAC concerning a specific dispute begins on the day the respondent receives the request for arbitration (unless the parties have agreed otherwise). The obligation to serve the request for arbitration lies with the claimant, who must submit proof of such service to the IAC. The next step is to agree on the appointment of arbitrator or arbitrators and to obtain approval of the composition of the arbitration tribunal from the IAC Chairperson. Then, the dispute shall be considered by the arbitration tribunal, which shall, at the earliest opportunity, hold a case management conference with the parties in order to establish, organise and plan the procedures that will be most appropriate and effective for the arbitration concerned, and shall adopt a procedural timetable in accordance with which the dispute proceeds. There is usually a two-stage exchange of written statements between the parties, followed by an oral hearing and award.

The primary duty of the arbitral tribunal is to resolve the dispute in accordance with the principles of the parties’ autonomy, legality, independence, competition, equality, fairness, confidentiality, and the autonomy of the arbitration agreement. Simultaneously, the arbitral tribunal has the right to independently determine whether it possesses the jurisdiction to hear the case, including in instances where a party objects to arbitration due to the invalidity of the arbitration agreement.

In the AIFC, IAC arbitrators are granted extensive rights to ensure a fair and impartial resolution of disputes without delays or unnecessary costs. Specifically, the arbitral tribunal has the authority to define its own scope of jurisdiction and to take certain interim measures when necessary, which notably distinguishes the powers of an IAC arbitrator from those of arbitrators in other tribunals. Furthermore, the IAC arbitral tribunal possesses broad rights to resolve issues concerning the reimbursement of costs incurred by a party.

All arbitrations are based on the essential duty of each arbitrator to guarantee fair, impartial and objective consideration of every dispute.

As a general rule, legal aid in Kazakhstan’s judicial proceedings may be provided by advocates (who are licensed) and legal consultants (who must be members of legal consultants’ chambers). In arbitration proceedings, both domestic and international, there are no qualification requirements for the representatives. However, it should be noted that when arbitration proceedings require actions in court (such as interim measures, assistance in taking evidence, or enforcement of the award), qualification requirements will apply to the person acting as a party’s representative in court.

In accordance with the AIFC legislation, a party may be represented in arbitration proceedings by legal practitioners or any other person duly authorised by the party.

Arbitral proceedings in Kazakhstan are founded on the principle of party autonomy. Each party decides what evidence it wishes to submit, and the arbitral tribunal assesses that evidence at its own discretion.

There is no formal discovery or disclosure process under Kazakhstan arbitration law. However, the tribunal may request additional documents or clarifications if it considers them necessary for resolving the dispute.

In practice, parties are expected to submit all supporting evidence along with their statement of claim and statement of defence. There are no strict rules of evidence or limitations, although the parties may agree on specific parameters for the submission of certain categories of evidence.

Regarding witness and expert testimony, the tribunal independently determines the procedure for examination. This may include reviewing written witness statements, oral testimony during hearings and, where appropriate, cross-examination.

In arbitrations held in Kazakhstan, strict and formal rules of evidence – such as those used in state courts – do not apply. Arbitral tribunals and the parties are free to adopt the evidentiary methods they deem most suitable and effective. In this regard, evidentiary procedures in arbitration are generally more flexible than those in court proceedings.

By contrast, Kazakhstan courts, when adjudicating civil disputes, are governed by the Civil Procedure Code, which contains a highly formalised evidentiary framework and prescribes detailed rules for the submission and evaluation of evidence.

Arbitrators in Kazakhstan have real but limited powers.

An arbitral tribunal may order the parties to produce documents or ensure witnesses attend the hearing. Such orders are binding on the parties, and failure to comply may be considered by the tribunal and weighed accordingly in its case assessment.

However, when it concerns third parties that are not involved in the arbitration, the tribunal has no authority to force them to produce evidence or attend a hearing. In such situations, the interested party may request assistance from the state court. The court may accept the request and support the arbitration if it considers the application to be well-founded.

Arbitration confidentiality in Kazakhstan is highly valued and maintained throughout all stages, including the recognition and enforcement of arbitral awards. Arbitral awards in Kazakhstan are not publicly disclosed and are not freely accessible, and court rulings relating to arbitration are sealed by the courts.

In Kazakhstan, arbitrators and participants in arbitration proceedings generally must not disclose information obtained during the process without the consent of the parties or their legal successors. They also cannot be questioned as witnesses about such information, except in cases specified by Kazakhstan law. Moreover, criminal procedural legislation explicitly forbids questioning an arbitrator as a witness, ensuring the confidentiality of arbitration processes.

In general, sharing confidential information may be permitted with the consent of the parties.

Under the AIFC legislation, according to IAC Rules of Arbitration and Mediation, unless the parties have agreed otherwise, all information related to arbitration procedures must be kept confidential, unless disclosure is authorised by a decision of the AIFC Court.

It is worth noting that, in accordance with the IAC Rules of Arbitration and Mediation, the IAC may, with the tribunal’s consent, publish any award with the names of the parties and other identifying information redacted.

Where a party objects to such publication, they may apply to the tribunal for an order that the relevant award be sealed, stating the reasons why such an order is required; also, the tribunal may seal the award if its publication (even in anonymised form) would be inconsistent with the overriding objective.

Generally, the award must be made by a majority vote of the tribunal members. Unless the rules specify otherwise, the award must be announced at the arbitration session. The tribunal may specify only the operative part of the award. In such cases, the reasoned decision must be sent to the parties within ten calendar days of the announcement of the operative part (unless another period is established by the rules or the parties’ agreement). This is the only time limit for issuing the award mentioned in the Law on Arbitration.

Typically, the time limits for delivering the award are set out in the rules of arbitral institutions, but these limits usually may be extended.

The award must be signed by the tribunal, and if any arbitrator’s signature is missing, the reason for the absence must be stated in the award. However, an arbitrator who disagrees with the majority decision of the arbitration panel may express their views in a dissenting opinion, which must be attached to the award and made available for the parties to review. The dissenting arbitrator has the right to refuse to sign the award.

Furthermore, the Law on Arbitration lists the mandatory elements that must be included in the award. In particular, the arbitral award must specify: (1) the date of the decision; (2) the seat of arbitration; (3) the composition of the arbitral tribunal; (4) the rationale for the tribunal’s jurisdiction; (5) the names of the parties involved (surnames and initials), and the roles of their representatives, including powers of attorney; (6) the claimant’s submissions and the respondent’s objections; (7) the essence of the dispute; (8) the facts established by the arbitration, the evidence supporting these findings, and the legal framework guiding the tribunal’s decision; (9) the tribunal’s conclusions on the acceptance or rejection of each claim; and (10) the costs associated with resolving the dispute, how these costs are allocated between the parties, and, if applicable, the timeline and procedures for enforcing the award.

The requirements of the IAC are simpler. The award must be in writing and must include the date of the award and the place of arbitration, and be signed by the arbitrators (at least a majority of the arbitrators, with an explanation for the absence of any signatures; if there is no majority of signatures, the signature of the chairperson of the arbitral tribunal should suffice, provided that the decision states the reason for the others’ refusal to sign).

Generally, the final award of the IAC arbitral tribunal must be issued within six months of submitting the case to the arbitral tribunal. The IAC Registrar may extend this period upon the arbitral tribunal’s request.

Kazakhstan law does not specify any restrictions or bans on potential remedies. Generally, anything not explicitly forbidden by law and in line with the applicable civil legislation rules should be allowed.

As a general rule in Kazakhstan legislation, if the recovery of interest is stipulated by the parties’ agreement or by law, the parties may recover the relevant interest. The primary current restriction is the charging of interest (and consequently, its recovery) under loan agreements by parties that are not authorised by law to do so, as this activity is regarded as banking work and requires licensing.

Regarding the costs of resolving the dispute through arbitration, they must be divided between the parties according to their agreement; if no agreement exists, they will be split in proportion to the claims that are satisfied and rejected. At the same time, expenses for paying the representative’s services on behalf of the party in favour of whom the arbitral award was issued, as well as other costs related to the arbitral proceedings, may be imposed on the losing party in accordance with the arbitral award, provided that the claim for reimbursement was made during the proceedings and approved by the arbitral tribunal. The only exception is if the claimant withdraws the claim, in which case the costs incurred by the claimant are not reimbursed by the defendant.

Under the AIFC legislation, in accordance with the IAC Rules of Arbitration and Mediation, the arbitral tribunal has full discretion to decide in its award that all or part of a party’s expenses shall be paid by the other party; there is no requirement for proportionality in splitting or allocating costs.

Generally, there is no “appeal” procedure for arbitral awards in Kazakhstan; Kazakhstan law explicitly prohibits reviewing the merits of an arbitration award. However, a party may submit a request to an appellate court to set aside an arbitration award, but only on procedural grounds, the specific list of which is provided in the law.

In particular, to set aside an award, a party must provide evidence that:

• it contains a decision on a matter not covered by the arbitration agreement or its terms, or it contains rulings on matters outside the scope of the arbitration agreement, and because of the lack of jurisdiction of the arbitral tribunal over the dispute. If awards on matters covered by the arbitration agreement can be separated from awards on matters not covered by such agreement, only the part of the award that includes rulings on matters outside the arbitration agreement may be set aside;
• one of the parties to the arbitration agreement has been declared incompetent by the court or the arbitration agreement is invalid under the law to which the parties have subjected it or, in the absence of such indication,under the laws of the Republic of Kazakhstan;
• a party was not duly notified of the appointment of an arbitrator or of the arbitration proceedings or, for other reasons recognised by the court as valid, was unable to submit its explanations;
• the composition of the arbitration or the arbitral procedure of the proceedings was not in accordance with the agreement of the parties, unless such agreement is contrary to any provision of the Law on Arbitration from which the parties may not derogate, or, in the absence of such agreement, was not in accordance with the Law on Arbitration; or
• there is an enforceable court judgment or arbitral award or a court or arbitral tribunal ruling on termination of proceedings in connection with the plaintiff’s withdrawal from the claim, issued on a dispute between the same parties, on the same subject matter and on the same grounds.

The award may also be set aside by the court if the arbitral award contradicts the public policy of the Republic of Kazakhstan or if the dispute on which the arbitral award was made is not arbitrable under Kazakhstan law.

An application for setting aside may be filed with the court within one month of receipt of the award.

The law also states that the court has the authority to suspend proceedings if an application is made to set aside an arbitral award. This can happen upon request by the parties to resume the arbitral process or to take other steps to address the grounds for setting aside the award.

An arbitral award may be examined upon application by a party to the arbitration agreement or another person whose rights are affected by newly discovered circumstances. The grounds for challenging an arbitral award in newly discovered circumstances are also strictly defined by law.

The rules concerning setting aside an award are similar in the AIFC, where the issue of setting aside an arbitration award is considered by the AIFC Court. In particular, an application to the Court for the setting aside of an arbitral award made in the AIFC can only be made on the grounds listed in the AIFC Arbitration Regulations 2017, which repeat verbatim Article V of the 1958 New York Convention.

The time limit for such a request to the AIFC Court is three months from the date on which the party making such request received the arbitral award, or more than three months, if the parties to the arbitration have agreed this in writing, or, if the request has been made, in connection with the need to correct or make an interpretation of the award, or to make an additional award, from the date on which the request was rejected by the arbitral tribunal.

The AIFC Court has the power to stay the proceedings for the setting aside of the award in order to enable the arbitral tribunal to resume the proceedings and to take such other measures as, in the discretion of the arbitral tribunal, may remove the grounds for setting aside the award.

Kazakhstan’s legislation does not address this issue. Theoretically, a party could include a prohibition or waiver in the contract to prevent the setting aside of the award, but implementing this in practice is likely to be very problematic.

An attempt to contractually exclude some of the grounds for setting aside or expand the list thereof may be unenforceable, as it may be viewed as contrary to imperative legal requirements.

In Kazakhstan, the law strictly prohibits an appeal court from reviewing the merits of an arbitration award; therefore, applicable judicial review standards are in place.

Kazakhstan acceded to the 1958 New York Convention through a presidential decree; the Convention came into force for Kazakhstan on 18 February 1996. Some academic opinions suggest that accession via a presidential decree is not the proper form, and that formal “ratification” by the legislature is required. However, these discussions are mostly theoretical, and in practice, the Convention is applied and observed. Kazakhstan is also a party to the 1961 European Convention on International Commercial Arbitration.

An application for the issuance of an execution writ must be filed within three years from issuance of the award. The enforcement procedure is provided in the Civil Procedure Code and the Law on Arbitration.

If an arbitration award is not executed voluntarily within the period established in it, the award creditor may apply to the first instance court with an application for enforcement of the arbitration award either (1) at the place of the seat of arbitration or (2) at the place of residence of the debtor (or at the location of the executive body of the legal entity), or (3) if the place of residence or location of the executive body is unknown, then at the location of the debtor’s property.

The application for the issuance of the execution writ must be accompanied by: (1) the original or a copy of the arbitration award (a copy of the award issued by a permanent arbitration institution must be certified by the head of this institution; a copy of an ad hoc arbitration award must be notarised), and (2) an original or notarised copy of the arbitration agreement. A failure to attach these documents entails rejection of the application.

The requirements for application for the execution writ are the same for both domestic and international arbitral awards.

The grounds for refusal of issuance of the execution writ as established by Kazakhstan law and those listed in the 1958 New York Convention differ. General Kazakhstan law expands the grounds for refusal to enforce the award listed in Article V of the 1958 New York Convention by two additional grounds: (1) if the award is made on a dispute not covered by the arbitration agreement or not subject to its terms, or contains rulings on issues beyond the scope of the arbitration agreement; and (2) if there is a standing court decision or arbitration award (or a court decision or an arbitration tribunal ruling to terminate the proceedings due to the party’s withdrawal), on the same subject, on the same grounds, between the same parties.

We note that since international arbitral awards are enforced based on the 1958 New York Convention, courts cannot apply these additional grounds specified in domestic legislation. However, not all courts have sufficient experience in handling international awards and treaties, and enforcement practices differ by location.

Under the AIFC legislation, the procedure for issuance of an execution writ for an IAC award is simpler: a mere application to the IAC Registrar, who is at the same time the Registrar of the AIFC Court and the enforcement judge, suffices.

The grounds for refusal of issuance of the execution writ under the AIFC legislation are exactly the same as those listed in Article V of the 1958 New York Convention.

Even though Kazakhstan undertook the obligation to abide by the rules of the 1958 New York Convention, enforcement of international arbitral awards faces difficulties. A notable problem in enforcing an international arbitral award is the practical impossibility of enforcing an award against the assets of a company located outside Kazakhstan. Under a poorly worded provision of the Civil Procedure Code, an application for enforcement may be filed with the court at the seat of arbitration, at the location of the award debtor, or, if the location of the debtor is unknown, at the location of the debtor’s assets. The last of these provisions is interpreted by the court in such a way that enforcement against the assets of the debtor may only be sought if the debtor’s address is unknown to the award creditor, a situation which is virtually impossible in international arbitration.

Courts almost uniformly reject applications for the enforcement of awards, stating that because the debtor’s address is known, filing at the location of the assets is not permitted, and they generally refuse to recognise their jurisdiction over the enforcement proceedings and the debtor’s assets.

This interpretation of law essentially undermines the purpose of the 1958 New York Convention and grants immunity to those arbitral award debtors that are not domiciled in Kazakhstan, even though most of their assets are located there.

Discussions about grounds for refusal to enforce, such as “public policy”, occur periodically. Various government bodies and officials have tried to define the concept of public policy more clearly or to compile an exhaustive list of considerations. There have also been instances where courts or prosecutors have attempted to apply the public policy principle in cases of alleged non-compliance with law, effectively trying to revise an award on its merits; however, such attempts now happen less often.

The legislation of Kazakhstan does not include specific provisions on class or group arbitration. Arbitration in Kazakhstan is generally seen as a form of alternative dispute resolution between particular parties that have entered into an arbitration agreement.

However, group arbitration might be feasible in practice, provided that:

• all parties agree to the joint proceedings;
• the parties have entered into similar or compatible arbitration agreements; and
• the applicable arbitration rules do not prohibit consolidation or joint proceedings.

In such cases, the dispute may be resolved within a single arbitral process, subject to the approval of the tribunal or the arbitral institution involved.

Arbitrators acting in Kazakhstan must adhere to the ethical standards outlined in the Law on Arbitration, including the core principles of impartiality, independence, confidentiality and integrity. They are also expected to follow the ethical rules of specific arbitral institutions, such as the IAC.

Party representatives, including advocates and legal counsel, are subject to the professional ethics rules of their respective organisations: advocates must comply with the Code of Ethics for Advocates; legal consultants are bound by the ethical standards of their professional chambers or associations.

There is no specific regulation in Kazakhstan governing third-party funding of arbitration. However, certain institutional rules, such as those of the IAC, recommend disclosing the identity of the funder.

Even without specific requirements, third-party funding must not breach the general civil law principles of good faith, cause conflicts of interest, or compromise the procedural equality of the parties in arbitration.

Consolidation of multiple arbitral proceedings into a single arbitration is achievable. Although this mechanism is not explicitly governed by national legislation, it is outlined in the rules of certain arbitral institutions, which specify how and under what conditions consolidation may take place.

Kazakhstan courts do not have any role in the consolidation of arbitral proceedings. This matter falls under the exclusive competence of the arbitral institutions or the arbitral tribunal itself.

Under Kazakhstan legislation, an arbitration agreement and any resulting award are only binding on the parties involved in that agreement.

In exceptional cases, third parties may still be affected by an arbitration agreement or award – for example, when the third party has explicitly consented to participate in the arbitration or when legal succession (such as assignment or inheritance) has taken place.

In practice, a Kazakhstan court cannot force a foreign third party to participate in arbitration. However, if an arbitral award has been issued and is subject to recognition and enforcement in Kazakhstan, the court may consider enforcing the award against a foreign party, provided that the requirements of the 1958 New York Convention and national legislation are met.