Cancellation of the arbitration award | Legal protection in Arbitration proceedings | Representation in the Arbitration Court

The District Court No. 2 of the Almaly city of Almaty, composed of the presiding judge Sadykov T.K., with the secretary of the court session, Askar K.K., having considered the application of LLC "..." for the annulment of the Adilet arbitration award dated 05/20/2019. By the decision of the Adilet arbitration court dated 05/20/2019, the claims of KazTransZhol Logistics LLP against Stroymontazh LLC for debt collection were satisfied. It was decided to recover from Stroymontazh LLC in favor of KazTransZhol Logistics LLP the amount of debt in the amount of 7,733,700.00 rubles, equivalent to 45,860,841 tenge. To collect from Stroymontazh LLC in favor of KazTransZhol Logistics LLP the amount of the arbitration fee in the amount of 247,011.00 Russian rubles, equivalent to 1,464,775.23 tenge. Stroymontazh LLC applied to the court for the cancellation of this decision of the Adilet arbitration court dated 05/20/2019, arguing that KazTransZhol Logistics LLP had failed to comply with the pre-trial dispute resolution procedure. The defendant, Stroymontazh LLC, has repeatedly appealed to the arbitration court to postpone the arbitration for three weeks to determine the actual amount owed, since the requirements of KazTransZhol Logistics LLP were overstated. The arbitrator did not provide copies of the documents attached by the plaintiff to KazTransZhol Logistics LLP, the arbitrator also refused to conduct the proceedings via videoconference, due to the location of Stroymontazh LLC in the Russian Federation, they could not arrive in time for the arbitration proceedings and familiarize themselves with the case materials.

Cancellation of the arbitration award | Legal protection in Arbitration proceedings | Representation in the Arbitration Court

At the hearing, the applicant's representative requested that their petition be granted and the decision of the Adilet arbitration be annulled, giving similar explanations with the arguments indicated in the application. At the hearing, the representative of KazTransZhol Logistics LLP asked to dismiss the petition. After listening to the explanations of the parties and examining the submitted materials, the court comes to the following conclusion. In accordance with art . 464, the Civil Procedure Code of the Republic of Kazakhstan, a petition for the annulment of an arbitral award may be filed by the parties to the arbitration proceedings, third parties not involved in the case, but in respect of whose rights and obligations the arbitration has decided on the grounds provided for by law, within one month from the date of receipt of the award. By the decision of the Adilet arbitration court dated 05/20/2019, the claims of KazTransZhol Logistics LLP against Stroymontazh LLC for debt collection were satisfied.

It was decided to recover from Stroymontazh LLC in favor of KazTransZhol Logistics LLP the amount of debt in the amount of 7,733,700.00 rubles, equivalent to 45,860,841 tenge. To collect from Stroymontazh LLC in favor of KazTransZhol Logistics LLP the amount of the arbitration fee in the amount of 247,011.00 Russian rubles, equivalent to 1,464,775.23 tenge. According to Article 53 of the Law of the Republic of Kazakhstan "On Arbitration", a petition for the annulment of an arbitration award is filed with the court in accordance with the civil procedure legislation of the Republic of Kazakhstan. The court issues a ruling on the issue of annulment of the arbitral award. This ruling may be appealed or protested in accordance with the civil procedure legislation of the Republic of Kazakhstan. In accordance with Article 52 of the Law of the Republic of Kazakhstan "On Arbitration", In order for an arbitration award to be annulled by a court, the party filing a motion for annulment must provide evidence that: 1) it contains a decision on an issue not provided for by the arbitration agreement or not subject to its terms, or contains rulings on issues beyond the scope of the arbitration agreement, as well as due to the non-jurisdiction of the dispute to arbitration. If arbitral awards on matters covered by an arbitration agreement can be separated from decisions on matters not covered by such an agreement, then only that part of the award which contains decisions on matters not covered by the arbitration agreement may be set aside; 2) one of the parties to the arbitration agreement has been declared legally incompetent by the court or the arbitration agreement it is invalid according to the law to which the parties have subordinated it, and in the absence of such indication – according to the legislation of the Republic of Kazakhstan.; 3) the party was not properly notified of the appointment of an arbitrator or of the arbitration proceedings, or for other reasons recognized by the court as valid, could not provide its explanations; 4) the composition of the arbitration or the arbitration procedure did not comply with the agreement of the parties; 5) there is an effective ruling on a dispute between the same parties, on the same subject and on the same grounds, a court decision or an arbitral award or a court or arbitration ruling on the termination of proceedings in connection with the plaintiff's rejection of the claim; 6) the arbitration award does not meet the requirements for writing and signature provided for in article 47 of this Law. The arbitral award is annulled by the court if it is determined that: 1) the arbitration award contradicts the public policy of the Republic of Kazakhstan; 2) the dispute on which the arbitration award is made cannot be the subject of arbitration proceedings under the legislation of the Republic of Kazakhstan.

The court, having studied the case materials, comes to the conclusion that the requirements of Stroymontazh LLC are to be satisfied. According to the norms of art.4 of the CPC (legality), when considering and resolving civil cases, the court must strictly comply with the requirements of the Constitution of the Republic of Kazakhstan, the constitutional laws of the Republic of Kazakhstan, this Code, and other regulatory legal acts.

Cancellation of the arbitration award | Legal protection in Arbitration proceedings | Representation in the Arbitration Court

Courts have no right to apply laws and other normative legal acts that infringe on the rights and freedoms of a person and citizen enshrined in the Constitution. Violation of the law by the court in resolving cases is unacceptable and entails the cancellation of illegal judicial acts. If legislative acts or an agreement of the parties to the dispute provide for the resolution of relevant issues by the court, the court is obliged to resolve these issues based on the criteria of fairness and reasonableness. According to Articles 31, 32 of the Law "On Arbitration", the parties have the right to get acquainted with the case materials and make copies of these materials, to present evidence. Each party should be given equal opportunities to present its position and defend its rights and interests.

The parties participating in the arbitration proceedings have the right to present evidence; to file petitions, to ask questions to the participants in the process, to give oral and written explanations; to present their arguments on all issues arising during the process. In this case, the defendant Stroymontazh LLC, as a party to the dispute, in violation of the requirements of Articles 31, 32 of the Law of the Republic of Kazakhstan "On Arbitration", was deprived of an objective opportunity to present its position and defend its rights and interests, and to provide appropriate evidence for this. The evidence to the contrary by the plaintiff's side has not been presented to the court. The arbitration court, despite the defendant's well-founded objections regarding the amount of debt, based its decision on these calculations by KazTransZhol Logistics LLP, which did not refute the defendant's arguments about the inconsistency of the debt calculations, since the defendants' arguments about the inaccuracy of the debt calculation are in the case file. As can be seen from the materials of the case and the decision appealed by the defendant, Stroymontazh LLC, the above-mentioned arguments of the defendant and his objections to the amount owed by the arbitration were left without due examination, while not taking into account all the arguments of the defendant aimed at reducing the amount owed. In such circumstances, the court concludes that when the appealed decision was made by the commercial court, the principle of legality was significantly violated, which is a legitimate reason for its cancellation.

Cancellation of the arbitration award | Legal protection in Arbitration proceedings | Representation in the Arbitration Court

Based on the above and guided by art. 268,269 of the CPC RK, the court DETERMINED to satisfy Stroymontazh LLC's Application for the annulment of the Adilet arbitration award dated 05/20/2019. The decision of the Adilet arbitration court dated 05/20/2019 was made on the claim of KazTransZhol Logistics LLP against Stroymontazh LLC on debt collection, to cancel.

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