New types of alternative (conciliation) procedures for dispute resolution in the Republic of Kazakhstan

On 1 January 2016, the new Civil Procedure Code of 31 October 2015, the Entrepreneurial Code of 29 October 2015[1], as well as the Law “On amendments and additions to some legislative acts of the Republic of Kazakhstan on improvement of the justice system” are coming into effective.[2] Among the innovations in these regulations is the promotion of alternative disputes resolution procedures (hereinafter referred to as ADR).

Сurrently, the legislation of the Republic of Kazakhstan (RK) provides for the following types of ADR: negotiation; mediation; domestic and international arbitration; pre-action protocols etc. From January 2016, this list will be increased with the following ADR procedures: notarial endorsement, participatory procedure and court-connected mediation. [3]

Notarial endorsement is a new well-forgotten old notarial instrument designed to conduct reconciliation procedures. Initially, Law “On Notary” of 14 July 1997 listed notarial endorsement among the notarial acts, but it was eliminated in 2000. As of next year, the instrument of notarial endorsement will be re-included on the list of notarial acts. Consequently, notaries will be able to provide the notarial endorsement based on the presence of the following grounds: i) documents confirming indisputability debt or other liability of the debtor to the claimant, ii) and the term of the statute of limitations not more than three years.

Within three years after a notary executes a notarial endorsement, the parties have a right to enforce it. One of the parties (the debtor) shall be entitled to protest to the notary within 10 days’ time of receiving the notarial endorsement. Having received a protest, the notary shall look into the protest and shall rule either to set aside or to uphold the notarial endorsement.[4]

A participatory procedure is a new procedure that involves negotiation between the parties with active involvement of their lawyers, unsupervised by a judge or other neutral third party.[5] In this procedure, the lawyers of the both parties are supposed to facilitate the parties to reach a mutually acceptable resolution of the dispute. Consequently, the role of the lawyers is important, because the outcome of the participatory procedure depends on them.

A participatory procedure normally has three stages: 1) advancement of dispute resolution proposals by the parties or their lawyers; 2) consideration of the proposals by the parties; 3) selection of a mutually appropriate proposal by the parties. This procedure will be deemed to have a positive outcome if the parties enter into a written agreement with the involvement of lawyers to resolve the dispute in the context of the participatory procedure. In the case of conclusion of the written agreement, the court shall issue an order to approve the agreement.[6]

Although the participatory procedure resembles the mediation procedure, they differ materially in their objectives. Pursuant to art. 3 of the Law on Mediation of RK, the mediation objectives are as follows: 1) achieve a resolution of the dispute (conflict) mutually acceptable to both parties 2) reduce the tension between the parties. In other words, the parties in mediation not only resolve their dispute by negotiation with the assistance of mediator, but also try to retain their amicable relationship after the mediation. Therefore, unlike the participatory procedure, in mediation the parties do not attempt to validate their claim and objections, but instead try to achieve a conflict resolution acceptable to both disputants (i.e. a win-win solution).

 

Court-connected mediation. Despite the fact that the doctrine of mediation has existed in Kazakhstan since 2011 and the government gives every possible support to this type of ADR, it still has not become common. Thus, to expand the scope of mediation and reduce the load on the judges, the mediation procedure is being implemented in the judiciary. The active process of implementation of this procedure started in 2014 when the Supreme Court of Kazakhstan conducted a pilot project to implement court-connected mediation in civil proceedings[7] at 59 courts specializing in civil cases and courts of general jurisdiction, as well as civil and administrative appeal panels at regional courts and those equated therewith. From May to December 2014, there were 3,939 court-connected mediation cases at abovementioned courts, 3,816 cases were conducted at the district courts and 123 cases at the appeal benches of the regional courts respectively. In fact, that pilot project increased the total number of private and court-connected mediation cases in 2014 up to 9029.[8]

Essentially, court-connected mediation is a reconciliation procedure for the resolution of a dispute (conflict) between the disputants with the assistance of the judge. [9] This type of mediation can be conducted in the court of first and appeal instances upon the request of the parties.

 

As a mediator in the first instances can be either the judge in charge of the case or another judge, but in the appeal instances the judge from the panel. A positive outcome of court-connected mediation is a dispute (conflict) resolution agreement made or so called mediation agreement. The judge in charge of the case shall review the agreement, and render an order to approve it and terminate the proceeding. In the event that the parties fail to resolve their dispute in the court-connected mediation, the court does not approve the agreement, the proceedings in the case shall be resumed to the trial.[10]

 

Court-approved agreements of court-connected mediation or private (out of court) mediation, as well as an agreement of the participatory procedure have largely the same effect as an amicable agreement. Therefore, such agreements are enforced under the rules of amicable agreement.

(For further information, see the table below).

 

 

 

 

 


Comparative table

ADR procedures Duration Neutral party Notarial endorsement/ Participatory and mediation agreements/amicable agreement Stamp duty Enforcement
Notarial endorsement Notary A notary executes a notarial endorsement on debt instruments. A stamp duty is charged on notarial endorsement at the rate of 50 per cent. Notarial endorsement is included on the list of writs of execution. Collection under notarial endorsement is made under the statutory procedure of RK for enforcement proceedings.
Participatory procedure 10 days Lawyers – A dispute resolution agreement reached by the parties by participatory procedure and   mediation prior to civil litigation (i.e. out of court) is an agreement aimed to establish, change or terminate civil rights and duties of the parties.

 

– A dispute resolution agreement reached by the parties by participatory procedure and mediation in the course of civil process is subject to the approval of the court in charge of the civil matter.

The case having been ended by an agreement to resolve the dispute (conflict) by way of mediation or participatory procedure, the stamp duty paid shall be refunded in full at the first and appeal instances and 50 per cent at the cassation court[11]. – Enforcement of pre-action participatory procedure and mediation dispute resolution agreement is subject to summary written proceedings.

 

– Enforcement of court-approved participatory procedure and mediation agreement is subject to the enforcement of the rules of amicable agreement.

Mediation Out of court mediation 30 days Mediator
Private mediation during trial
Court-connected mediation 10 days Judge
Amicable settlement Upon mutual agreement of the parties Amicable agreement shall be reviewed by court. Upon review, the court shall render an order to approve the settlement and termination of the proceedings or refuse to approve the amicable agreement. The case ended by the amicable settlement between the parties, the stamp duty paid shall be refunded in full at the first and appeal instances and 50 per cent at the cassation court . Unless performed voluntarily, an amicable agreement shall be enforceable by a writ of execution, to be issued by a court upon the application of one of the parties.

 

 

[1] http://www.kazpravda.kz/uploads/redactors/files/56382e2654bec1446522406.pdf

[2] http://online.zakon.kz/Document/?doc_id=33968956#sub_id=2200

[3] ROK Business Code, art.264;

[4]http://online.zakon.kz/Document/?doc_id=33968956&doc_id2=1008028#sub_id=1002248171&sdoc_params=text%3D%25D0%25B8%25D1%2581%25D0%25BF%25D0%25BE%25D0%25BB%25D0%25BD%25D0%25B8%25D1%2582%25D0%25B5%25D0%25BB%25D1%258C%25D0%25BD%25D0%25B0%25D1%258F%2520%25D0%25BD%25D0%25B0%25D0%25B4%25D0%25BF%25D0%25B8%25D1%2581%25D1%258C%26mode%3Dindoc%26topic_id%3D33968956%26spos%3D1%26tSynonym%3D1%26tShort%3D1%26tSuffix%3D1&sdoc_pos=1&sub_id2=30010000&sel_link=1002248171

[5]http://online.zakon.kz/Document/?doc_id=31617138#sdoc_params=text%3d%25d0%2594%25d0%25be%25d1%2581%25d1%2583%25d0%25b4%25d0%25b5%25d0%25b1%25d0%25bd%25d0%25be%25d0%25b5%2520%25d1%2583%25d1%2580%25d0%25b5%25d0%25b3%25d1%2583%25d0%25bb%25d0%25b8%25d1%2580%25d0%25be%25d0%25b2%25d0%25b0%25d0%25bd%25d0%25b8%25d0%25b5%2520%25d1%2581%25d0%25bf%25d0%25be%25d1%2580%25d0%25be%25d0%25b2%2520%25d1%258d%25d1%2582%25d0%25be%26mode%3dindoc%26topic_id%3d31617138%26spos%3d1%26tSynonym%3d1%26tShort%3d1%26tSuffix%3d1&sdoc_pos=0

[6] http://advokatura.kz/partisipativnye-protsedury/

[7] http://almaty.sud.kz/rus/content/polozhenie-o-realizacii-pilotnogo-proekta-po-vnedreniyu-v-grazhdanskoe-sudoproizvodstvo-1

[8] http://online.zakon.kz/Document/?doc_id=31655763

[9] http://zhmb.sud.kz/rus/sub/smes/sudebnaya-mediaciya

[10] The new GPK [Civil Procedure Code (CPC)], art. 179-180.

[11] An application by the parties to resolve the dispute (conflict) by mediation may be filed with the cassation court, unless requiring additional procedural steps and stay of proceedings in the case. The motion before the cassation court must be filed by the Parties complete with a mediation agreement. (art.179, CPC).

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