The Court Dismissed a Claim for Termination of a Contract Filed Long After the Transfer of Goods

The plaintiff, M.D., filed a lawsuit against O.N. seeking termination of the contract and recovery of KZT 6,396,667.

In the statement of claim filed in 2024, the plaintiff requested the court to terminate the sale and purchase agreement for a 2007 Toyota Camry concluded with the defendant in 2021. The dispute arose after the purchased vehicle was seized by the police authorities due to the discovery of signs that the vehicle identification number (VIN) had been re-applied manually and matched the identification number of another vehicle.

By the decision of the Zhetysu District Court of Almaty dated July 10, 2024, the claim was dismissed.

By the ruling of the Judicial Panel for Civil Cases of the Almaty City Court dated October 7, 2024, the decision of the court of first instance was amended, the claim was granted, and KZT 4,950,000 was awarded against the defendant.

By the ruling of the Judicial Panel for Civil Cases of the Supreme Court of the Republic of Kazakhstan dated March 5, 2025, the appellate court’s decision was overturned, and the judgment of the court of first instance was upheld.

The cassation court took into account that the defendant had purchased the vehicle in 2019 and that, before the plaintiff purchased the vehicle from the defendant, it had been repeatedly inspected at a specialized center by representatives of Company “K” and JSC “K”. In addition, the claim was filed three years after the expiration of the period for discovering defects established by Article 430 of the Civil Code.

It should also be noted that, in general, Article 414(1) of the Civil Code provides that if goods are seized from the buyer by a third party, the seller is obliged to compensate the buyer for the losses incurred, unless it is proven that the buyer knew or should have known of the grounds for such seizure.

Jurisdiction

Jurisdiction over disputes concerning the amendment and termination of contracts is determined by the provisions of Chapter 3 of the Civil Procedure Code (CPC). As a general rule, such disputes fall within the jurisdiction of the court at the defendant’s place of residence or location (Article 29 of the CPC).

In addition, the law provides for:

• jurisdiction over investment disputes (Parts 1–2 of Article 27 of the CPC);
• jurisdiction at the plaintiff’s choice under contracts specifying the place of performance (Part 6 of Article 30 of the CPC);
• exclusive jurisdiction over disputes concerning rights to immovable property (Part 1 of Article 31 of the CPC); and
• contractual jurisdiction (Article 32 of the CPC).

An analysis of the civil cases reviewed showed that the courts of the Republic generally comply with the legislation governing territorial jurisdiction. However, certain violations concerning jurisdiction have been identified.

By the ruling of a judge of the Balkhash District Court of Almaty Region dated December 20, 2022, the claim of A.K. against LLP “B” for termination of a contract and recovery of a monetary amount was returned.

According to the case materials, the parties had concluded a contract for the manufacture and installation of windows and doors on the basis of advance payment. Referring to the prolonged failure to perform contractual obligations, the plaintiff, A.K., filed the claim with the court at the defendant’s location.

In the ruling, the judge of the Balkhash District Court concluded that the dispute did not fall within the jurisdiction of that court, stating that the claim could be filed at the place where the contract was concluded or performed in the city of Almaty.

By the ruling of the Judicial Panel for Civil Cases of the Almaty Regional Court dated February 14, 2023, the decision of the court of first instance was overturned and the civil case was remanded to the same court for consideration on the merits.

The appellate court proceeded from the fact that, previously, by the ruling of District Court No. 2 of the Auezov District of Almaty dated December 29, 2021, the civil case brought by A.K. against LLP “B” for termination of the contract had been transferred to the Balkhash District Court of Almaty Region due to the establishment of the defendant’s actual location within the territory of that district.

Thus, the conclusion of the court of first instance that the dispute did not fall within the jurisdiction of the Balkhash District Court of Almaty Region cannot be regarded as consistent with the requirements of the law.

Pursuant to the general rule set forth in Article 29(1) of the CPC, a claim must be filed with the court at the defendant’s place of residence or location.

In the above-mentioned statement of claim (which was re-filed with the Balkhash District Court), the plaintiff provided information confirming the defendant’s registration within that district.

The judge’s reference to the lack of jurisdiction of the district court based on the application of Article 30(9) of the CPC contradicts the law governing jurisdiction at the plaintiff’s choice. In cases of alternative jurisdiction, the law grants the claimant the right to choose the venue for the consideration of the civil case.

State Duty

Article 35 of the Constitution of the Republic of Kazakhstan establishes the general requirement that the payment of taxes, fees, and other mandatory charges established by law is the duty and obligation of every person.

The rates of state duty payable in courts are determined by Article 610 of the Tax Code. Pursuant to Subparagraph 1) of Paragraph 1 of Article 610 of the Tax Code, as a general rule, state duty on claims of a pecuniary nature is charged as a percentage of the amount in dispute.

Part 1 of Article 104 of the Civil Procedure Code (CPC) establishes the procedure for determining the value of a claim. In claims for the early termination of a property lease agreement (rental agreement), except for residential leases, the value of the claim is determined by the total amount of payments for the use of the property for the remaining term of the agreement (contract), but for no more than three years (Subparagraph 10 of Part 1 of the said Article).

At the same time, Subparagraph 7) of Article 610 of the Tax Code provides that for claims seeking amendment or termination of a residential lease agreement, as well as for other non-pecuniary claims or claims not subject to valuation, the state duty shall be paid in the amount of 0.5 of the Monthly Calculation Index (MCI).

In general, judicial practice has developed an approach under which claims for the amendment or termination of contracts are regarded as non-pecuniary claims or claims not subject to valuation. At the same time, from the perspective of improving legal regulation, there is a need to harmonize the Civil Procedure Code and the Tax Code by adopting a uniform approach to claims concerning the termination of lease agreements.

Claims for amendment and termination of contracts are often filed together with claims for the return of property or recovery of monetary amounts. For such cases, Paragraph 5 of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 9 dated December 25, 2006, “On the Application by the Courts of the Republic of Kazakhstan of Legislation on Court Expenses in Civil Cases,” establishes that when a statement of claim contains both pecuniary and non-pecuniary claims, state duty shall be paid simultaneously in accordance with the rates established for each type of claim.

Part 2 of Article 104 of the CPC requires the plaintiff to indicate the value of the claim. If the stated value clearly does not correspond to the actual value of the property sought, the value of the claim shall be determined by the judge.

When resolving disputes concerning the amendment or termination of a contract together with claims for the recovery of property (or monetary amounts), courts must properly verify whether the plaintiff has complied with the requirement to indicate the value of the claim and whether the state duty has been fully paid for each claim.

Legislation

The principal legal acts applicable to the category of civil cases under review are:

• The Constitution of the Republic of Kazakhstan dated August 30, 1995 (hereinafter referred to as 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 referred to as the “Civil Code”);
• The Civil Procedure Code of the Republic of Kazakhstan dated November 3, 2015 (hereinafter referred to as the “CPC”);
• The Code of the Republic of Kazakhstan “On Subsoil and Subsoil Use” dated December 27, 2017;
• The Land Code of the Republic of Kazakhstan dated June 20, 2003;
• The Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget” dated December 25, 2017 (hereinafter referred to as the “Tax Code”);
• The Law of the Republic of Kazakhstan “On Housing Relations” dated April 16, 1997;
• The Law of the Republic of Kazakhstan “On Financial Leasing” dated July 5, 2000;
• The Law of the Republic of Kazakhstan “On Consumer Protection” dated May 4, 2010;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 9 dated December 25, 2006, “On the Application by the Courts of the Republic of Kazakhstan of Legislation on Court Expenses in Civil Cases”;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 9 dated July 18, 1997, “On Judicial Practice in the Application of Legislation on the Privatization of Residential Premises by Citizens from the State Housing Stock”;
• Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 7 dated November 25, 2016, “On Judicial Practice in the Consideration of Civil Cases Arising from Bank Loan Agreements.”

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