Who And Why Puts Arbitration on the Line

The saga about the fight between a Kazakh and a foreign investor for the Vavilonskoye polymetallic ore field in the East Kazakhstan region is nowhere near its end. We will continue covering this topic since, with specific reference, it shows whether of not one can invest in the Kazakh economy.   

We sincerely hope that those reading our saga and following the story it is based on have realised that, in Kazakhstan as oppose to the civilised countries, investors must take into consideration several-fold more factors. Among other things, they must take into account the unofficial capabilities of their competitors (opponents). Apart from that, there is a good chance that, when buying (launching) the business and later, in the course of its life, they will have to deal with dishonest people on a regular basis.

They will encounter such people everywhere but, first and foremost, in the “super-presidential” vertical. The decades of the adverse selection that existed under the authoritarian rule of Nursultan Nazarbayev have resulted in a situation where it is the opportunistic, the unscrupulous and the authority-abusing people that strive to work at the state structures including the courts, the public prosecution office, the regulatory and supervisory authorities. And it is these people who can survive in these structures better than anyone.

Now, after this unpoetic note, let us proceed with the story.

In our previous publication titled “The Claim from a Dead Company”, we write about an event that even we find quite shocking. A dead company whose liquidation was officially registered by the country’s legal authorities, has managed to file a claim to Kazakhstan’s International Arbitration Court and the latter has admitted the claim to examination.

As of that writing, we though that the International Arbitration Court and its Chairman Maydan Suleymenov (insidentally, he is a very well-known attorney in Kazakhstan) had been deceived by Erzhan Kumarov. Here is our conjecture.

“In our opinion, the legal precedent created by Erzhan Kumarov (filing a claim from an already dead legal body) and substantiated by IAC Chairman Maydan Suleymenov’s decision to admit it to examination demonstrate that, in Kazakhstan, anything is possible; even things that are impossible by definition.

This is critically dangerous for any investor regardless if they come from Kazakhstan or abroad since, it turns out, the said investor may basically “slip and fall down” at any stage of the implementation of their project if they bump up against such an attorney as Kumarov.

The worst, however, is that Kazakhstan has got enough kumarovs everywhere – in the judiciary establishment, among the lawyers and those practicing in other spheres”.

Now then, the response of the International Arbitration Court to the information that the claim is filed by a non-existent company confirms this conjecture. For, instead of verifying the facts we presented (which was not hard to do via the internet), the members of Suleymenov’s staff began pressuring (by phone) the head of the company – the potential defendant demanding that he consents to the arbitration trial and selects the judge.

At the same time, the argument that the staff of the International Arbitration Court does not know what is going on since they do not read KZ.expert is not applicable here. They have already received a letter of objection that contains all the information on when and how the plaintiff company ceased to exist as a legal body (you will find it at the end of the article).

At this point, we cannot explain the abnormal behaviour of the chairman of the International Arbitration Court and its staff members. Hypothetically, however, we can allow for any possibility. For attorney Kumarov who has filed the claim from the dead company he used to chair and close down has extensive ties in the legal sphere which includes the judges.

But will lay this delicate topic aside and simply venture a guess that he has been able to find his way to the International Arbitration Court as well.

By the way, we and probably many other “non-jurists” were startled by the fact that the International Arbitration Court whose name alone should inspire respect is, in reality, a mere LLP (Limited Liability Partnership) founded by two well-known Kazakhs, the aforementioned Maydan Suleymenov and Aydyn Bikebayev, a member fo the Supreme Judicial Council and the head of its qualifications committee.

So, if these two esteemed attorneys would not spot the violations committed by the staff members of their own private structure, foreign investors should not even think of coming to Kazakhstan. As for the Kazakhstan-based investors, it’s time for them to move to other counties.

Below is the letter of objection sent to our editorial office. It contains all the information on when and how the plaintiff company ceased to exist as a legal body.


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