Jurisdiction of Investment Disputes in Kazakhstan Considering Chinese Investments
The Republic of Kazakhstan is one of the key destinations for Chinese investment in Central Asia within the framework of the “Belt and Road Initiative.” Chinese investors are actively involved in projects in the fields of energy, infrastructure, transport and logistics, mining, industry, and digital technologies.
The growth of cross-border investment increases the importance of dispute resolution mechanisms, primarily the issue of jurisdiction—determining which body is authorized to hear an investment dispute: the state courts of Kazakhstan, international arbitration, the Astana International Financial Centre (AIFC) Court, or foreign arbitration institutions.
| Jurisdiction in this context refers to the allocation of competence among various adjudicatory bodies for the consideration and resolution of disputes. In Kazakhstan, investment and related commercial disputes may be heard by state courts, international commercial arbitration, the AIFC Court, the International Arbitration Centre (IAC) of the AIFC, as well as foreign arbitral institutions such as ICC, CIETAC, HKIAC, SIAC, and others. An investment dispute typically arises between an investor and a state authority in connection with investment activity. |
The judicial system of Kazakhstan does not establish a separate category of “investment courts,” so such disputes are considered within civil and administrative proceedings. Specialized interdistrict economic courts hear civil disputes involving investors, while specialized interdistrict administrative courts hear disputes challenging acts of state authorities. Relevant appellate and cassation courts, including the Supreme Court of the Republic of Kazakhstan, review judicial acts. National courts have jurisdiction over cases involving foreign legal entities and investors, including disputes related to investment activity and state regulation.
The specific features of disputes involving Chinese investors are determined by their international nature: the parties are often registered in different jurisdictions, contracts may include provisions on foreign law (frequently English law), financing is provided through international financial institutions, and projects are implemented in a cross-border format. This creates a strong tendency to include arbitration clauses in investment and EPC contracts providing for dispute resolution under the AIFC, CIETAC, HKIAC, SIAC, or ICC rules. The legislation of Kazakhstan permits submission of disputes to arbitration provided there is a valid arbitration agreement between the parties.
A special role in the dispute resolution system is played by the Astana International Financial Centre (AIFC), which includes the AIFC Court and the International Arbitration Centre (IAC). The AIFC Court is based on the principles of English common law, operates independently from the national judicial system, conducts proceedings in English, and applies the autonomous AIFC legal framework. Its jurisdiction covers disputes between AIFC participants, disputes arising from activities within the Centre, and commercial disputes by agreement of the parties.
Chinese investors actively use international arbitration, relying on bilateral investment treaties, the 1958 New York Convention, and the 1965 Washington Convention (ICSID). Kazakhstan and China have established the possibility of recourse to international arbitration mechanisms under investment protection agreements. The main advantages of arbitration include forum neutrality, independence of arbitrators, confidentiality, and the international recognition and enforceability of awards.
However, the system of jurisdiction over investment disputes is not without challenges. There may be competition between jurisdictional mechanisms of state courts and arbitration, parallel proceedings, and the risk of conflicting decisions. In practice, issues also arise regarding the recognition and enforcement of arbitral awards, particularly in relation to public policy, the validity of arbitration agreements, and procedural grounds for refusal of recognition. Additionally, state authorities may insist on national jurisdiction for certain categories of disputes, especially those involving subsoil use, taxation, environmental regulation, or strategic assets.
In the future, Kazakhstan’s investment dispute resolution system is expected to evolve through the strengthening of the AIFC’s role, digitalization of judicial processes, expansion of international arbitration practice, and harmonization of legislation with international standards. In the context of growing Chinese investment, predictability and efficiency of dispute resolution mechanisms are of particular importance, as they directly influence investor confidence.
Thus, jurisdiction over investment disputes in Kazakhstan represents a multi-layered system combining state courts, international arbitration, and AIFC institutions, and its development is closely linked to the expansion of cross-border investment and the need for stable and neutral dispute resolution mechanisms.
| If your company is implementing investment or infrastructure projects in Kazakhstan involving foreign counterparties, the REVERA team is ready to assist with: |
• drafting arbitration clauses and EPC contracts;
• selecting the optimal jurisdiction for dispute resolution;
• supporting arbitration proceedings;
• recognition and enforcement of foreign arbitral awards;
• protection of investors’ interests in cross-border disputes.
Contact our lawyer to learn more details
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