Answer ... The Kazakhstan Supreme Court database (http://sud.gov.kz/) contains details of most court cases. Some recent cases of note are described below.
MoE v Subsoil User 1 (March 2021): The MoE filed suit with the Supreme Court in a bid to oblige the subsoil user to comply with its obligations for 2017 to finance research and development (R&D) works in the amount of 1% of its aggregate annual income from contractual activities based on the results of the preceding year.
The subsoil user objected, pointing out that from 2013 to 2017 it had financed R&D works for a larger amount (five times more than the claimed amount). According to Article 76.1.12-1 of the 2010 Subsoil Law, in case of over-performance of this obligation on the results of the current year, the amount of such over-performance may be transferred to subsequent reporting periods.
The court ruled in favour of the MoE, stating as follows:
- While the amendments to Article 76.1.12-1 regarding the possibility to transfer the amount of over-performance became effective on 1 June 2015, the subsoil user’s over-performance occurred in 2014 (99%) and 2016 (1%).
- Article 383 of the Kazakh Civil Code provides that if, after the conclusion of a contract, the law introduces new provisions which differ from those that were effective when the contract was concluded, the terms of the contract will remain valid, except where the law specifically provides that it applies to relations arising from contracts concluded earlier.
- The subsoil user overlooked the fact that, according to the SUC, it had undertaken to finance R&D works with a determined minimum threshold value, which did not prevent it from making payments in an amount exceeding 1%.
Subsoil User 2 v MoE (June 2021)
A company filed suit with the Nur-Sultan SIEC challenging the MoE’s rejection of its application to participate in an auction for the grant of a subsoil use right for a certain subsoil plot, and requesting it to order the MoE to register the application.
The court ruled in favour of the MoE, stating that it had the authority to reject the application because the subsoil user had failed to provide duly certified documents regarding its legal entities and the individuals that indirectly controlled them, and a guarantee letter relating to its undertakings in Kazakh and confirming that it had no unrectified violations under its SUC.
Subsoil User 3 v MoE (July 2021)
A company filed suit with the Nur-Sultan SIAC challenging the MoE’s failure to extend the exploration period and requesting it to order the MoE to sign an addendum to the SUC on the extension of the exploration period.
The court stated that investors’ claims seeking to challenge administrative acts and actions (or lack of action) of administrative bodies and officials are considered under the APD. Meanwhile, civil cases relating to investment disputes are considered by the Nur-Sultan SIEC under the CPD.
The court ruled that although the first claim challenging the MoE’s failure to extend the exploration period was formally of a public law nature, de facto it was covered by the SUC’s terms, as the claimant’s ultimate goal was to extend the exploration period through execution of the addendum.
Accordingly, the claim was dismissed and it was clarified that the claimant could file suit with the Nur-Sultan SIEC.