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International Experts Discuss Successful Experience of Kazakhstan Ministry of Justice in Improving Dispute Resolution and Prevention Mechanisms as Part of World Bank Webinar


NUR-SULTAN, Kazakhstan–()–On 27 May 2021, the World Bank jointly with Kazakhstan’s Ministry of Justice held a high-level webinar entitled: “Experience of Kazakhstan in improving the International Business and Investment Climate – Improving Dispute Resolution and Prevention Mechanisms: Prevent, Arbitrate, and Mediate”.

The event represented the third webinar session as part of series of webinars hosted by the World Bank that explores Kazakhstan’s judicial reform cycle and its approach to strengthening its institutional and regulatory framework.

In his opening remarks, the World Bank Country Manager for Kazakhstan, Jean Francois Marteau, introduced the key topic of the session — Kazakhstan’s commitment to investment dispute resolution and how its track record in this area can impact the country’s attractiveness as a forum for investment.

In his welcoming speech, Minister of Justice Marat Beketayev reiterated that Kazakhstan is deeply dedicated to following and adopting the best frameworks for resolving disputes, and that this has helped to promote and protect the rule of law in Kazakhstan for both foreign and domestic investors. Minister Beketayev cited the establishment of the Astana International Financial Center as evidence of the achievements made. The Minister added that: “the development of our institutions has been accompanied by a decline in the number of international arbitration cases brought against Kazakhstan”, as reflected by the latest World Bank data.

Prof. George Bermann, Professor and Director of the Center for International Commercial and Investment Arbitration, Columbia Law School, acting as the moderator for the session, proceeded to introducing the panel of speakers, comprised of leading international experts on dispute resolution. As he explained, the webinar focused on two competing principles which all States, including Kazakhstan, must navigate: “one, the general duty of States to respect and comply with arbitral awards and two, the right of a State to resist awards to which they have a legitimate defense under applicable treaties.” A State that properly navigates this tension, Prof. Bermann further explained, “will by definition have acted in a way that is genuinely pro-arbitration and in so doing have made an important contribution to the rule of law.”

The first panellist, Meg Kinnear, Vice President of the World Bank and Secretary General of the International Centre for Settlement of Investment Disputes (ICSID), provided a summary of the function of ICSID and Kazakhstan’s experience with investor arbitration at ICSID and more generally. She presented substantial data and highlighted the results of the twenty-three total investor-state arbitrations in which Kazakhstan has been involved since gaining its independence in 1991. This data showed that of the 19 completed cases, 10 were won by Kazakhstan, 2 were settled pre-award, 6 were lost at arbitration and 1 contesting enforcement. Of those 6, Kazakhstan has settled or paid the award in all cases but one – the Stati case – where Kazakhstan is actively challenging enforcement post-annulment. As Ms. Kinnear noted, these results are in line with those of other States and are “very balanced.”

This viewpoint was complemented by Prof. Dr Kaj Hober, Professor of International Investment and Trade Law at Uppsala University, and associate member at 3 Verulam Buildings, Gray’s Inn London, who discussed the impact of investment disputes on investment climate from the perspective of states and investors. Prof. Hober emphasised that education and training are key, adding that the statistics look good for Kazakhstan but that, even with those statistics, the specifics of each case must be interrogated to understand the truth rather relying on broad and often incorrect generalizations.

Prof. August Reinisch, Professor of International and European Law at the University of Vienna, focused on a specific phenomenon which has become more prominent in the last couple of decades — fraud and corruption in the field of investment arbitration. Prof. Reinisch highlighted that both fraud and corruption are difficult to prove, often based on circumstantial evidence, red flags and indications.

Prof. Reinisch concluded that while in the past established cases of fraud or corruption usually led to the dismissal of investor claims for lack of jurisdiction or inadmissibility, there are tendencies calling for more nuanced solutions, inspired by commercial arbitration approaches as well as Article 34 of the UN Convention against Corruption.

Finally, Akerke Akhmetova, Vice Minister of Justice, Kazakhstan, covered Kazakhstan’s experience and reforms in improving dispute resolution and prevention mechanisms. She highlighted that a lot has been done in the last years and that “the Ministry of Justice of Kazakhstan believes that the way to successful reform and change is to foster transparency and open discussion”. She then proceeded to outlining the various initiatives and reforms that the Ministry has been undertaking in terms of strengthening the mechanisms of investment dispute resolution across three categories: reforms of the legal framework, institutional reforms and cultural changes. Ms Akhmetova concluded with noting that all reforms and initiatives are carried out under the overarching principle of rule of law, which must be respected at all times.

Waleed Malik, Senior Public Sector Specialist, World Bank, provided closing remarks and thanks to the participants and organisers of the session and announced that the next session of the series will take place on June 3rd 2021.

The recording of the webinar can be found here:

https://fb.watch/5Ph2NEkD-u/

Presentations are available here:

https://www.gov.kz/memleket/entities/adilet/documents/details/172245?lang=en

https://www.gov.kz/memleket/entities/adilet/documents/details/172246?lang=en



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