Commercial arbitration: how businesses resolve disputes without a state court

Which disputes go to arbitration

Typical disputes that companies refer to arbitration:

• supply and sale: non-payment, short delivery, quality of goods;
• construction contracts: deadlines, scope, acceptance of works, penalties;
• subsoil use, service and EPC contracts;
• leasing between companies;
• sale and purchase of ownership interests and shares, shareholder agreements;
• lease of commercial real estate;
• foreign trade contracts.

Some categories are reserved by law for state courts: bankruptcy, disputes between state bodies and entities of the quasi-public sector, and certain disputes between banks and individuals. The full list is given on the arbitration agreement page.

How international arbitration works

A Kazakh company signs a contract with a supplier from another country. Neither party wants to litigate in the counterparty’s country, under unfamiliar rules and in a foreign language. So the contract includes a clause providing for neutral arbitration. In it, the parties settle four questions in advance.

The seat of arbitration. This is a legal concept, not the address of the hearings: the award is deemed made at the seat of arbitration, and it is the court of that country that hears an application to set it aside. Hearings can be held in another city or online.

The applicable law. The parties choose the law of the state under which the contract will be interpreted. In a dispute between two Kazakh parties, Kazakh law applies.

The language of the proceedings. It is most convenient when it matches the language of the contract and correspondence.

The arbitral forum. A permanent arbitral institution with its own rules, or a tribunal the parties set up themselves for a single dispute.

Then come the claim, the choice of arbitrators, the exchange of submissions, the hearing and the award. If the losing party does not comply with the award voluntarily, the creditor applies to the court of the country where the debtor’s assets are located.

Institutional or ad hoc arbitration

The law permits both options. In arbitration set up for a specific dispute, the parties agree on the rules themselves, choose the arbitrators, and arrange the hearings and the storage of documents. This is flexible, but when the parties are in conflict, any procedural detail becomes a new point of dispute, and there is no one to help.

In a permanent arbitral institution, the rules are written down, and the Secretariat administers the case. If a party delays the choice of an arbitrator, the head of the institution appoints one. For most commercial disputes this is more convenient and more predictable.

How to choose an arbitration center

Before writing an arbitral institution into a contract, check:

• whether its rules, address and register of arbitrators are published (the law requires a permanent arbitral institution to publish them);
• whether the register includes arbitrators with experience in your industry and in the language you need;
• whether the cost is clear: the fee scale and a calculator available before you file a claim;
• how long the proceedings take under the rules;
• the exact name of the institution for the clause.

Arbitration and the state court

Interim measures

Interim measures, such as the attachment of property or accounts, are granted by a state court on a party’s application. Such an application is usually filed right after the claim is submitted, before the arbitral tribunal is formed. To confirm that arbitration proceedings have begun, the Center’s ruling on commencing the case is sufficient for the court. Applying to a court for interim measures does not breach the arbitration agreement.

If the tribunal dismisses the claim, this is a ground for the court to lift the interim measures.

Enforcing the award abroad

The New York Convention 1958 obliges the courts of contracting states to recognize foreign arbitral awards. A court may refuse only on a closed list of grounds, including: incapacity of a party or invalidity of the arbitration agreement, the party was not notified of the proceedings, the tribunal exceeded the scope of the agreement, the procedure was breached, the award is not yet binding or has been set aside, the dispute is not arbitrable, or the award conflicts with public policy. In Kazakhstan a similar list is set out in Article 57 of the Law “On Arbitration”, with an additional ground: a decision on the same dispute has already entered into force. The court has no power to review the award on the merits.

Weak points of arbitration

An error in assessing the evidence cannot be corrected: there is no appeal, and a court may set the award aside only on the grounds listed in Article 52 of the Law. Interim measures and the writ of execution can only be granted by a court, so it cannot be avoided entirely. In a small dispute, compare the arbitration fee with the state duty in advance. Note that if the claim is granted, the fees are recovered from the respondent.

Cost

The claimant pays a registration fee of 70,000 tenge excluding VAT and an arbitration fee based on a scale tied to the amount in dispute. For non-property disputes the arbitration fee is fixed at 600,000 tenge excluding VAT. If the claimant withdraws the claim before the arbitral tribunal is formed, 75% of the arbitration fee is refunded, and 40% if withdrawn before the first hearing. The final allocation of costs between the parties is made in the award.

Calculate the fee

Atameken Arbitration Center

The Center operates in Astana under the National Chamber of Entrepreneurs of the Republic of Kazakhstan “Atameken”. Its register lists 84 arbitrators from Kazakhstan and other countries: practicing lawyers, former judges and academics. Proceedings are conducted under the Rules of the Center as amended on 05.06.2025, in the language agreed by the parties.

Open the registerWrite to the Secretariat