Kazakhstan: Overview Of Recent Significant Developments In The Civil Procedure Code Of Kazakhstan

Last Updated: 4 February 2015
Article by Bakhyt Tukulov and Zeinebike Madybayeva

On 17 November 2014 significant modifications were introduced into the Republic of Kazakhstan Code of Civil Procedure (CPC). Although such changes have been widely discussed among practitioners within the context of the new Code of Civil Procedure, introduction of these novelties came as a surprise to most practitioners, even to some of the judges. Modification of the existing procedural law to reflect some of the novelties anticipated in the draft of the new CPC may indicate that the new Code is not likely to be adopted as soon as initially expected.

The modifications into the CPC, in our view, would have an overall positive effect on the delivery of justice, although some of items may raise concerns. Please see our summary below:

  1. Introduction of the requirement to pay a state duty for filing appeals, cassation appeals, or motions to initiate a supervisory proceeding;
  2. Introduction of the new simplified category of court proceedings;
  3. Introduction of the requirement for the representatives of parties acting on the basis of a power of attorney to possess a law degree;
  4. Introduction of new rules applicable to settlement agreements;
  5. Guilt established in the course of administrative proceedings would no longer require proof in civil proceedings;
  6. Other changes.

Introduction of the requirement to pay a state duty for filing appeals, cassation appeals, or motions to initiate a supervisory proceeding;

From now on, in order to file an appeal, cassation appeal, or a motion to initiate supervisory proceedings a party submitting an appeal must provide documents which proves payment of a state duty. Otherwise, the appeal would be returned. Article 535 of the Republic of Kazakhstan Tax Code, which specifies amounts of the state duty payable for filing statements of claim, was amended to reflect rates of the state duty payable for filing appeals.

A state duty payable for filing an appeal, cassation appeal, or a motion to initiate a supervisory proceeding, in relation to non-monetary claims, would equal to 50 per cent of the state duty payable for filing a non-monetary claim. For monetary claims, it would be 50 per cent of the state duty normally payable for filing monetary claims, except that it would be calculated out of the disputed amount. Thus, in order to file an appeal in a monetary claim, for example, a legal entity would have to pay 1.5 per cent of disputed amount. For individuals, the figure would be 0.5 per cent of the disputed amount.

It is without doubt, these changes will significantly reduce the number of appeals. And the parties would now be more willing to settle their claims to avoid significant costs.

Introduction of the new simplified category of court proceedings;

New Chapter 13-1 was introduced to the CPC to govern so-called simplified proceedings. This new category of civil proceedings is shorter than the ordinary proceedings, it does not involve oral hearings, and the cases are reviewed by a judge based on written submissions of the parties. Simplified procedure applies to claims for recovery of funds where the value of a claim does not exceed 500 Monthly Calculation Indicates (approx. USD 5,000) for legal entities and one hundred MCIs for private entrepreneurs (approx. USD 1,000). It also applies to cases, regardless of their value, where the claim is based on written evidence which proves respondent's liability.

In simplified proceedings, a court would review the case within one month and issue a judgment. Judgments issued in simplified proceedings cannot be appealed to the Supreme Court. The parties may file written submissions and objections within time limits established by the court. Simplified proceedings do not apply to judicial proceedings which concern third parties, cases which require inspection or examination of evidence at the place such evidence is located, cases which require an expert review or witness testimony, cases connected with other claims, including claims against other parties, and cases where a judge decides that the case requires additional examination of evidence, etc.

Introduction of the requirement for the representatives of parties acting on the basis of a power of attorney to possess a law degree;

Article 59 of the CPC lists categories of individuals who may represent parties in civil proceedings. Representatives acting on the basis of a power of attorney represent the party issuing the power of attorney pursuant to Article 59(7) of the CPC, as persons admitted by the court at the request of parties to the proceedings.

Revisions concerned with Article 59(7). From now on, individuals admitted by court to act as representatives at the request of the parties to the proceedings must possess law degree. Thus, in the course of judicial proceedings, one would have to provide a copy of his (her) diploma. Thus, it appears that a notary certified copy of a representative's diploma would have to be enclosed to the statement of claim or an objection.

In addition, Article 62(3) of the CPC has been clarified to say that an advocate in a civil proceeding must have a power of attorney from the principal (on top of the advocate's assignment). Article 62 of the CPC now expressly states that: an advocate's powers to act in a certain case shall be certified by a power of attorney and advocate's assignment issued by the respective legal consultation office or Bar Council, or by the Bar Presidium, if the advocate works individually.

A new paragraph was added to Article 62(3) of the CPC which states that advocate's powers to execute each of the procedural powers described in Article 61(1) of the CPC (for instance, powers to sign and submit a statement of claim, enter into a mediation agreement or refer a case to arbitration, waive claims in full or in part, acknowledge a claim, etc.) shall be supported with a notarised power of attorney or power of attorney equivalent to the notarised one.

Conversely, the CPC does not require notary certification of the transfer of powers described in Article 61 in the case of transfer of powers to representatives acting without an advocate's licence. This may be due to the anticipated new draft of the CPC, which is supposedly aimed at limiting the possibility of court representation by persons who are not advocates.

Introduction of new rules applicable to settlement agreements;

Previously, the CPC did not describe in sufficient detail the rules applicable to settlement agreements. Now, a new chapter 16-1 Settlement Agreement has been introduced into the Code. The new chapter elaborates on the procedure governing entry into a settlement agreement, the form and content thereof, the procedure of court's approval and other matters. Indeed, this is a significant step forward.

For example, Article 173-3 of the Code provides that a settlement agreement must be in written form and signed by the parties, it must incorporate terms agreed upon by the parties.

A settlement agreement may envisage deferral of obligations or performance thereof in instalments, assignment of claim, full or partial release or acknowledgement of the debt, distribution of legal costs, and other terms consistent with the law. A settlement agreement must be executed in such a number of copies so as to exceed the number of parties by one extra copy. One such extra copy must be kept in the case file. Article 173-4(6) of the Code elaborates on the contents of court's ruling approving a settlement agreement.

Guilt established in the course of administrative proceedings would no longer require proof in civil proceedings;

As a general rule, within civil proceedings, there is no requirement to prove circumstances which have been established in another civil case where the same parties took part, as well as circumstances established by a judgement issued in a criminal case. Similarly, from now on, circumstances established by court in the course of an administrative proceeding would not require proof.

In particular, a new paragraph 3-1 has been added to Article 71 of the CPC, which provides that, if a party's guilt in relation to an administrative offence is established by court's judgment in an administrative proceeding, such guilt shall be deemed to have been proven in a civil case on the legal implications of such administrative offence. Despite the fact that the above article only mentions of guilt; it does not mention of the binding effect of other circumstances established by court in an administrative case, it is likely that, in practice, civil courts would interpret this provision broadly, as having effectively a binding effect in relation to all circumstances established by an administrative court.

Thus, the following situation could be possible: if a state environmental authority establishes that a business entity generates excessive emissions into environment, the entity is held liable for the administrative offence and such administrative act (judgment) remains valid, it is likely that in the course of civil proceedings initiated by the environmental authority seeking recovery of environmental damage from the business entity, the guilt of such entity for the environmental damage would be deemed to have been established without any further proof. As you may see, application of this rule in practice may have serious implications and we are yet to see how the practice would develop. This change, if applied broadly, can hardly be treated as having positive effect.

Other changes.

Language of Court Proceedings

The language of a court proceeding can be changed at the claimant's request, if at preparation to trial it is discovered that the claimant does not understand the language in which his representative (advocate) filed a claim (application). This was not the case earlier.

In addition, a new rule has been introduced such that, if a party does not understand the language of the proceedings, he (she) may request and court issuing the judgment must provide a translation of such judgment into language which such party understands.

Expansion of the Competence of Economic Courts

Article 30 of the CPC, which contains jurisdictional rules, has been modified to extend the competence of specialised inter-district economic courts to review cases on the restructuring of financial institutions and non-financial organisations being a part of banking conglomerate as a parent company. Previously, this category of cases was within the jurisdiction of specialised financial courts which now has been abolished.

Burden to prove failure to receive court's notice is to be borne by the parties

New paragraph 5, which defines the notion of proper notice, has been added to Article 129 of the CPC. Proper notice is defined as notice received by an adult family member of a party, notice sent by registered mail, telephone message or telegram, as well as a report confirming delivery of a text message to a mobile subscriber or email address, or a notice submitted by other means of communication that registers the notice or summons, unless a party proves that the notice has not been received or has been received later.

As seen from the foregoing, if a party has been notified by court by means of communication that registers notice, burden to prove late receipt or the failure to receive such notice would be borne by the recipient.

This modification would help to accelerate service of court's notices, provided, however, that they are properly sent. In practice, this remains a significant issue and will see how it would be applied in practice.

The number of cases which can be heard by way of summary proceedings has been expanded

The modifications also concerned with Article 140 of the CPC, which lists categories of cases which a court may review in the form of a summary proceeding (prikaznoe proizvodstvo). For example, the following categories of claims would be subject to summary proceedings: claims for the recovery of debt from owners of premises (apartments) which evade from making payment contributions towards the maintenance of condominium property, claims for the recovery of debt under public contracts for the supply of utilities (electricity, gas, heat, water supply, telephone and Internet, cable television, solid waste disposal), claims for indexation of awarded amounts, etc.

Changes in rules relating to presentation of evidence

Article 66 of the CPC was amended to provide that the parties and other persons participating in proceedings must present evidence to district court and such evidence shall be examined in the court's proceedings. According to Article 66(1-1) of the CPC, the contents of each piece of evidence to which a party refers to support his (her) claims or objections must be disclosed in the course of proceedings at a district court. A party may only refer to evidence that was disclosed during the court proceedings.

Greater emphasis has been made on the rule that the failure to present evidence in district court precludes presentation of such evidence in the courts of appeals and other courts, except situations where this is specifically permitted by the CPC. It is noted that the CPC permits parties to present evidence in the court of appeals and other courts up the ladder only for a valid reason.

Apparently, going forward, upper courts would now carefully evaluate admissibility of new evidence which was not presented in the district court.

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.

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