Compensation for Moral Harm in Protecting the Business Reputation of an Individual and Application of the Rules on Compensation for Losses in Protecting the Business Reputation of a Legal Entity
The claims for protection of the business reputation of an individual shall also apply to the protection of the business reputation of a legal entity, except for claims for compensation for moral harm. The protection of the business reputation of a legal entity shall be governed by the rules on compensation for losses in accordance with the procedure established by the Civil Code of the Republic of Kazakhstan (hereinafter – the Civil Code).
According to the clarification provided in paragraph 17 of the Regulatory Resolution on Compensation for Moral Harm, claims for the protection of the business reputation of an individual shall also apply to the protection of the business reputation of a legal entity, except for claims for compensation for moral harm. The protection of the business reputation of a legal entity shall be governed by the rules on compensation for losses in accordance with the procedure established by the Civil Code.
Civil legislation does not provide for compensation for moral harm to a legal entity
Pursuant to paragraph 1 of Article 951 of the Civil Code, moral harm means the violation, diminution or deprivation of personal non-property benefits and rights of individuals, including moral or physical suffering experienced by the victim.
Pursuant to paragraph 3 of the Regulatory Resolution on Compensation for Moral Harm, personal non-property rights and benefits mean benefits belonging to an individual from birth or rights arising by virtue of law that are inseparably connected with his or her personality. It follows from the foregoing that moral harm may only be caused to an individual.
Thus, by its legal nature, moral harm is associated with intangible benefits – a person's mental and physical suffering – rather than with property damage suffered by an organization.
A legal entity is an artificial formation that does not possess consciousness or emotions and, therefore, cannot experience pain, offence or stress. A legal entity may suffer financial losses (for example, its income may decrease as a result of defamation) or damage to its business reputation; however, such damage is subject to material compensation rather than compensation for moral harm.
The protection of the business reputation of a legal entity shall be governed by the rules on compensation for losses in accordance with the procedure established by the Civil Code.
Accordingly, a claim for compensation for moral harm caused to a legal entity shall not be subject to satisfaction.
At the same time, by the decision of the Bukhar-Zhyrau District Court of the Karaganda Region dated September 11, 2023, the claim of an LLP against N. for protection of honor and dignity and recovery of moral harm was partially satisfied.
The court ordered the refutation of previously disseminated false information concerning the LLP and awarded KZT 10,000 in moral harm against the defendant in favor of the LLP.
By the ruling of the Civil Cases Judicial Panel of the Karaganda Regional Court dated December 19, 2023, the decision in the part concerning the recovery of moral harm was reversed, and a new decision was rendered dismissing the claim.
The conclusions of the appellate court concerning the absence of grounds for awarding compensation for moral harm to a legal entity are considered correct.
Jurisdiction
The jurisdiction of disputes in this category is determined according to the general rules established by Article 29 of the Civil Procedure Code of the Republic of Kazakhstan (hereinafter – the CPC), under which claims shall be filed with the court at the place of residence or location of the defendant.
Pursuant to Part 12 of Article 30 of the CPC, claims against several defendants may, at the claimant's option, be filed at the location of one of the defendants.
Cases concerning the protection of honor, dignity and business reputation are considered by courts of general jurisdiction. Claims concerning the protection of the honor, dignity and business reputation of legal entities also fall within the jurisdiction of district (city) courts. If a legal entity or an individual entrepreneur is a party to such cases, the claim shall be considered by an economic court.
Cases related to the protection of the rights and interests of minors fall within exclusive jurisdiction and shall be considered by specialized interdistrict courts for juvenile cases.
An analysis of the cases demonstrated that the courts of the Republic generally comply with the rules of jurisdiction.
At the same time, there are individual violations concerning the jurisdiction of cases.
Thus, by the ruling of the Mughalzhar District Court of the Aktobe Region dated April 30, 2024, in the case concerning the claim of Sh. against S. for a public apology on social media, a mediation agreement was approved.
It follows from the case materials that the claimant, Sh., is the father of a minor, “A”, whose photographs and video materials containing false and inaccurate information insulting the honor and dignity of the minor had been published by the defendant.
Sh. filed the claim in the interests of his minor child, namely his son, born in 2011.
Pursuant to Part 3 of Article 27 of the CPC, cases related to the protection of the rights and interests of minors fall within exclusive jurisdiction and shall be considered by specialized interdistrict courts for juvenile cases.
Since the claim concerns the interests of minor children, including claims for prohibiting the dissemination of information and deleting photographs, the case requires a special procedural approach and consideration by a specialized court (the relevant provision entered into force on September 1, 2023).
At the stage of accepting the claim, or during the preparation or consideration of the case, the court was required, pursuant to subparagraph 2) of Part 1 of Article 152 of the CPC, to return the claim or refer the case to the court having proper jurisdiction. However, the court failed to do so.
Law of the Republic of Kazakhstan No. 84-VII dated December 20, 2021 introduced amendments to Article 32 of the CPC providing for the possibility for the parties to agree on extraterritorial (contractual) jurisdiction.
This provision is actively applied by the courts. During the period under review, a total of 48 cases were referred on the basis of extraterritorial jurisdiction.
Thus, pursuant to an agreement between the parties on extraterritorial jurisdiction, a case brought by B. against P. concerning recognition of information as untrue and defamatory of honor and dignity and compensation for moral harm was transferred from a court of the North Kazakhstan Region to the Karakiya District Court of the Mangystau Region.
Similarly, a case concerning the claim of K. against O. for the protection of honor and dignity and compensation for moral harm was transferred from the Interdistrict Civil Court of Astana to Court No. 2 of the Alikhan Bokeikhan District of Karaganda under extraterritorial jurisdiction.
The above-mentioned article provides the parties with the right to change territorial jurisdiction on the basis of an agreement between them. Such an agreement is binding both on the parties and on the court and must be made in writing.
Ниже — полный перевод на английский язык с сохранением юридического стиля и структуры исходного текста.
State Duty
Pursuant to subparagraph 7) of Article 610 of the Tax Code, a state duty in the amount of 0.5 monthly calculation index (hereinafter – MCI) shall be charged on statements of claim of a non-property nature.
Pursuant to subparagraph 14) of Article 610 of the Tax Code, a state duty in the amount of 1% of the amount of the claim shall be charged on statements of claim filed by individuals for recovery, in monetary terms, of compensation for moral harm caused by the dissemination of information damaging to honor, dignity and business reputation.
The analysis demonstrated that, in most cases, courts correctly calculate the state duty when a claim is filed.
However, certain shortcomings have been identified.
Pursuant to paragraph 7 of the Regulatory Resolution on Court Costs, a statement of claim to which a document confirming payment of the state duty has not been attached, or where the state duty has not been paid in full or has been paid using incorrect details (beneficiary, code, budget classification code (BCC), etc.), shall be returned pursuant to Article 152 of the Civil Procedure Code, since failure to pay the state duty prevents the initiation of civil proceedings.
Thus, some courts have a practice of charging a state duty in the amount of one MCI for a claim concerning the protection of honor, dignity and business reputation, which is incorrect.
Therefore, pursuant to the requirements of the Tax Code, when filing a claim where the only claim is for the protection of honor, dignity and business reputation, a state duty in the amount of 0.5 MCI shall be charged. Where a claim for compensation for moral harm is also filed, the state duty shall be paid in the amount of 1% of the amount claimed.
Simplified Proceedings
Article 267-2 of the Civil Procedure Code provides for a list of cases that may be considered under simplified (written) proceedings.
The generalization demonstrated that all cases were considered by the courts under the rules of ordinary claim proceedings.
At the same time, there is one case that was considered under simplified (written) proceedings.
Sh. and A. filed a claim with the court against T. for the protection of honor, dignity and business reputation and for compensation for moral harm.
By the ruling of the Kyzylorda City Court dated December 6, 2024, it was ordered that the case be considered under simplified proceedings.
By the judgment of the same court dated December 30, 2024, the claim was granted. The defendants were ordered to pay KZT 1,000,000 in compensation for moral harm.
By the court's ruling dated January 20, 2025, the judgment was set aside.
By the judgment of the court dated April 14, 2025, which entered into legal force, the claim was dismissed.
Cases concerning the protection of honor, dignity and business reputation fall within the category of non-property disputes.
This category of cases should be considered by courts under the rules of ordinary claim proceedings, as they involve the protection of non-property rights, require a detailed examination of evidence and an assessment of the content of the disputed information, and often require the appointment of linguistic and other expert examinations.
In order to establish all the circumstances of such cases, it is necessary to examine a number of items of evidence or request additional evidence. Therefore, courts are recommended to apply the provisions of subparagraphs 5) and 6) of Part 3 of Article 267-1 of the Civil Procedure Code.
Return of a Claim
Article 152 of the Civil Procedure Code provides for an exhaustive list of grounds for returning a claim.
In judicial practice, there are cases involving claims seeking recognition of information disseminated on social networks such as YouTube, Telegram channels and Facebook as untrue, defamatory of the honor and dignity of the claimant, and damaging to the claimant's business reputation.
Some courts return such claims by referring to paragraph 3 of Article 143 of the Civil Code, which provides for a mandatory pre-trial procedure in cases where the claims of an individual or legal entity for the protection of honor and dignity are related to the publication of a refutation (reply) in the mass media.
Thus, by the ruling of the Taraz City Court dated July 25, 2024, the claim filed by E. against D. and others seeking recognition of a publication as untrue and damaging to business reputation was returned with reference to subparagraph 1) of Part 1 of Article 152 of the Civil Procedure Code due to non-compliance with the pre-trial dispute resolution procedure.
Pursuant to Article 143 of the Civil Code, if information damaging the honor, dignity or business reputation of an individual or legal entity is disseminated through the mass media, it shall be refuted free of charge by the same mass media. An individual or legal entity in respect of whom information infringing upon their rights or legitimate interests has been published by the mass media shall have the right to have their response published free of charge by the same mass media. A claim by an individual or legal entity for publication of a refutation or response in the mass media shall be considered by the court if the mass media outlet has refused to publish it or has failed to publish it within one month, as well as in the event of its liquidation.
In this case, the publications were posted by the defendants on the YouTube social network and on the Telegram channel “Base”, which are accessible to any user. Accordingly, social networks do not bear responsibility for publications made by their users.
In these circumstances, the court's conclusions that the claimant was required to send the defendants a demand to refute the publications as part of the pre-trial dispute resolution procedure are incorrect.
Another example is the following: by the ruling of the District Court named after G. Musrepov of the North Kazakhstan Region dated July 28, 2023, on the same grounds, the claim filed by S. against B. and others seeking recognition of information as untrue and damaging to honor, dignity and business reputation was returned.
The judge indicated that the claimant had not applied to the mass media, including the “YouTube” partner program and the online publication “Agroblog.kz” on YouTube, with a request to refute the disseminated video material, and had not submitted to the court evidence of a refusal to publish the refutation.
The Civil Cases Judicial Panel of the North Kazakhstan Regional Court correctly found that the return of the claim was unfounded, since the claimant had not brought any claims against the mass media and the statement of claim did not contain a claim for publication of a refutation.
The claimant had brought claims seeking recognition of the information as untrue and damaging to honor, dignity and business reputation against three individuals, without seeking their refutation. Therefore, there were no grounds for returning the claim.
Below is the full English translation, preserving the legal terminology and structure of the original text.
Leaving a Claim Without Consideration
The grounds for leaving a claim without consideration are regulated by the provisions of Article 279 of the Civil Procedure Code of the Republic of Kazakhstan (hereinafter – the CPC).
The generalization demonstrated that this provision of procedural law is generally complied with by the courts.
At the same time, there are examples where courts return claims on grounds not provided for by law.
Thus, by the ruling of the Kokshetau City Court dated June 4, 2024, the claim filed by B. against O. for the protection of honor and dignity and recovery of an amount was returned on the grounds that the claimant had failed to clarify the claims.
However, such a ground for leaving a claim without consideration is not provided for by procedural law.
By the ruling of the Civil Cases Judicial Panel of the Akmola Regional Court dated August 14, 2024, the court's ruling was set aside and the case was remitted for a new judicial consideration, which resulted in unnecessary delay in the consideration of the case.
The claim was received by the court on March 27, 2024, and was considered on the merits only on October 31, 2024.
Thus, a case that did not present any particular complexity remained unresolved for seven months.
Termination of Proceedings Due to the Conclusion of Settlement Agreements
The idea of introducing conciliation procedures as one of the priority areas for improving the judicial system was enshrined in the Law on Mediation, which laid the foundation for the development of mediation as a conciliation procedure in various fields.
The judge shall take measures to reconcile the parties and assist them in resolving the dispute at all stages of the proceedings by sending the parties an invitation to participate in a conciliation procedure.
The current legislation allows an agreement to be concluded only between the parties in cases of the category under review. The agreement must contain the terms agreed upon by the parties, indicating the time limit and procedure for its performance.
Judicial Practice in the Consideration of Cases
Judicial statistics indicate a certain increase in the number of cases in this category, which is facilitated by the development and accessibility of social networks and information, an increase in the legal literacy of the population, a more active position of citizens, and other factors.
In most cases, the parties to cases in this category are individuals, while the subject matter of their disputes concerns information disseminated by the defendants, including through the mass media, which is defamatory in nature and does not correspond to reality.
The main methods chosen for the protection of their rights are compensation for moral harm or compensation for losses caused by the dissemination of defamatory information, as well as such specific methods of protecting honor, dignity and business reputation as refutation of defamatory information disseminated through the mass media, publication of one's response, and removal of the relevant information from the Internet.
Article 18 of the Constitution provides that everyone shall have the right to privacy, personal and family secrecy, and protection of his or her honor and dignity.
Pursuant to Part 1 of Article 8 of the CPC, everyone shall have the right, in the manner prescribed by this Code, to apply to a court for the protection of violated or disputed rights, freedoms or legitimate interests.
Pursuant to Article 141 of the Civil Code, personal non-property rights shall be subject to protection irrespective of the fault of the person who violated the right, unless otherwise provided by the Civil Code. A person who brings a claim for protection shall prove the fact of violation of his or her personal non-property right.
Pursuant to paragraphs 1 and 2 of Article 143 of the Civil Code, a citizen shall have the right to demand, through judicial proceedings, the refutation of information damaging his or her honor, dignity or business reputation. If information damaging the honor, dignity or business reputation of an individual or legal entity has been disseminated through the mass media, it shall be refuted free of charge by the same mass media.
A court shall render a decision granting a claim for the protection of honor, dignity and business reputation upon establishing the cumulative presence of three conditions: the information must be defamatory in nature, must have been disseminated, and must not correspond to reality.
When resolving cases in this category, the claimant shall be required to prove the fact that the information was disseminated by the person against whom the claim was brought and the defamatory nature of such information. The burden of proving that the information disseminated by the defendant corresponds to reality shall rest with the defendant.
Pursuant to paragraph 1 of the Regulatory Resolution on the Protection of Honor, Dignity and Business Reputation, defamatory information means information that does not correspond to reality and diminishes the honor and dignity of a citizen in the public opinion or in the opinion of individual citizens from the standpoint of compliance with laws and the moral principles of society.
To Grant a Claim in Such Disputes, the Simultaneous Presence of the Following Circumstances Must Be Established:
- the fact that the information was disseminated by the defendant;
- the defamatory nature of the information;
- the information does not correspond to reality.
The claimant is required to prove only the fact that the defamatory information concerning him or her was disseminated by the person against whom the claim was brought. At the same time, the claimant is also entitled to submit evidence demonstrating that the information damaging his or her honor and dignity does not correspond to reality.
The absence of at least one of the circumstances comprising the mandatory set of conditions for granting the claim — namely, that the information is defamatory in nature, has been disseminated, and does not correspond to reality — constitutes grounds for dismissing the claims.
The Main Regulatory Legal Acts Are:
The Constitution of the Republic of Kazakhstan dated August 30, 1995 (hereinafter – the Constitution);
The Civil Code of the Republic of Kazakhstan (General Part), adopted by the Supreme Council of the Republic of Kazakhstan on December 27, 1994; the Civil Code of the Republic of Kazakhstan (Special Part), adopted by the Parliament of the Republic of Kazakhstan on July 1, 1999 (hereinafter – the Civil Code);
The Civil Procedure Code of the Republic of Kazakhstan dated November 3, 2015 (hereinafter – the CPC);
The Code of the Republic of Kazakhstan “On Taxes and Other Obligatory Payments to the Budget” dated December 25, 2017 (hereinafter – the Tax Code);
Regulatory Resolution No. 6 of the Supreme Court of the Republic of Kazakhstan dated December 18, 1992, “On Certain Issues of Application by Courts of Legislation on the Protection of Honor, Dignity and Business Reputation of Individuals and Legal Entities” (hereinafter – the Regulatory Resolution on the Protection of Honor, Dignity and Business Reputation);
Regulatory Resolution No. 7 of the Supreme Court of the Republic of Kazakhstan dated November 27, 2015, “On Application by Courts of Legislation on Compensation for Moral Harm” (hereinafter – the Regulatory Resolution on Compensation for Moral Harm);
Regulatory Resolution No. 5 of the Supreme Court of the Republic of Kazakhstan dated July 11, 2003, “On a Court Judgment in Civil Cases”;
Regulatory Resolution No. 9 of the Supreme Court of the Republic of Kazakhstan dated December 25, 2006, “On Application by Courts of the Republic of Kazakhstan of Legislation on Court Costs in Civil Cases” (hereinafter – the Regulatory Resolution on Court Costs);
- Law of the Republic of Kazakhstan dated July 23, 1999, “On Mass Media” (hereinafter – the Law on Mass Media);
- Law of the Republic of Kazakhstan dated June 19, 2024, “On Mass Media”;
- Law of the Republic of Kazakhstan dated January 28, 2011, “On Mediation” (hereinafter – the Law on Mediation).
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