Administrative lawsuits by investors
Also, as in the case of the Ministry of Energy, the main reason for the refund is the lack of jurisdiction in the framework of administrative proceedings.
Given that the main defendants in the IESF are the Ministry of Energy and the Ministry of Finance, the following pattern develops: investors file administrative lawsuits against these ministries regarding the contesting of contracts for subsurface use, these lawsuits are returned due to lack of jurisdiction.
As a result, investors are already filing the same lawsuit with the IESB. This wastes the time of both the courts and the investors themselves. The case on the claim of JSC "M" to MIIR for challenging the decision and actions to extend the contract was returned on the basis of subparagraph 11) of part 2 of Article 138 of the CPC – the case is not subject to consideration in administrative proceedings (No. 7194-22-00-4/508).
As indicated by the SCAD of the Supreme Court, the local courts came to the correct conclusion that the stated requirement is actually aimed at preventing the conclusion of an additional agreement to the contract regarding the extension of its validity by a person who is not a party to the contract in order to protect their property rights, that is, it does not follow from public law relations.
The provisions of paragraph 12 of Article 278 of the Code "On Subsoil and Subsurface Use" establish a procedure for making amendments to subsurface use contracts, including through negotiations between the parties to the contract, the results of which are formalized in a protocol.
During negotiations, the Ministry does not act as a subject of public authority, but is a party to private law relations.
Moreover, the beginning of negotiations on the extension of the contract is an interim solution that does not have a final legal result, and as a result does not affect anyone's rights and legitimate interests.
The result of the negotiations is an addendum to the contract concluded between the parties, which can be challenged by the interested party in civil proceedings (paragraph 3 of Article 157 of the Civil Code).
It is very important to explain to investors that the return of a claim as not subject to administrative proceedings is not a violation of the plaintiff's right to judicial protection. Different legal procedures are provided for different categories of disputes, so administrative courts cannot consider a dispute that is not subject to review.
Most investor lawsuits against local authorities relate to land disputes. At the same time, the mistake of investors in such categories of disputes is a misinterpretation of legislation.
As an example, we can cite the case of the claim of "E" LLP to the akim of the Tselinograd district of the Akmola region for recognition as illegal and cancellation of the decision to refuse to approve the provision of a land plot (No. 7194-22 00-4/1530).
The local courts rejected the claim. The SCAD of the Armed Forces supported the position of the local courts.
The reason for the refusal was that the requested land plot is pasture land, intended for the needs of the population and is used as pasture for cattle in the settlement of Semenovka, Novoishimsky rural district.
At the same time, at the time of filing the petition, the positive conclusion of the state environmental assessment was withdrawn from the plaintiff in connection with a violation of the requirements of environmental legislation, namely, the extraction of construction sand was carried out in the contours of the groundwater deposit.
The courts also took into account the deprivation of the plaintiff of a positive conclusion of the state environmental assessment, which prohibits the company from conducting a subsurface use operation. Given the absence of new arguments in the cassation appeal, the SCAD of the Supreme Court considered that there were no grounds for reviewing the contested judicial acts.
Thus, when filing a complaint with the appellate and cassation instances, it is important to bring new arguments and point out facts that may lead to a review of judicial acts.
Determination of jurisdiction
The dispute between the courts of first instance located in different regions, cities of republican significance and the capital is resolved by the Supreme Court of the Republic of Kazakhstan upon the submission of the relevant regional or equivalent court (Part 2 of Article 109 of the CPC).
Defendants in investment disputes
The defendant is "an administrative body or official who is being sued in court" (paragraph 15, part 1, Article 4 of the CPC). In turn, the administrative body according to subclause 7) of the first part of Article 4 of the APPC is a state body, a local government body, a state legal entity, as well as another organization that, in accordance with the laws of the Republic of Kazakhstan, are authorized to adopt an administrative act, commit an administrative act (inaction).
The defendant is "an administrative body or official who is being sued in court" (paragraph 15, part 1, Article 4 of the CPC). In turn, the administrative body according to subclause 7) of the first part of Article 4 of the APPC is a state body, a local government body, a state legal entity, as well as another organization that, in accordance with the laws of the Republic of Kazakhstan, are authorized to adopt an administrative act, commit an administrative act (inaction).
Refunds of claims
Refunds for administrative claims are carried out on the grounds provided for in the second part of Article 138 of the CPC.
The basis (subparagraph, part two of Article 138 of the CPC)
2) the claim does not comply with the requirements of the second part of Article 131 of this Code
5) there is a dispute between the same parties in the proceedings of the same or another court.
6) the plaintiff has withdrawn the filed claim
9) the parties have concluded an agreement on reconciliation, mediation or dispute settlement
11) the case is not subject to consideration in the order of administrative proceedings
15) the court refused to restore the missed deadline
17) the case is beyond the jurisdiction of this court
A large number of refunds based on subparagraphs 11) and 17) of the second part of Article 138 of the CPC are related to errors made by plaintiffs when filing civil lawsuits with the SMAS.
In accordance with the second part of Article 5 of the CPC, the task of administrative proceedings is the fair, impartial and timely resolution of administrative cases in order to effectively protect and restore violated or disputed rights, freedoms and legitimate interests of individuals, rights and legitimate interests of legal entities in public relations.
It is important to note that public law relations arise between subjects of law in connection with the exercise by one of the participants of his powers in relation to the other.
If we are talking about challenging the terms of a contract, which is a civil contract, then the state body acts in it as a party to the contract and is not associated with the exercise of authority.
Consequently, such cases are considered in civil proceedings.
For example, SMAS returned the claim, stating that "the defendant's refusal is not an onerous act, does not contain an authoritative expression of will, and is not aimed at the emergence, modification, and termination of the plaintiff's rights and obligations arising from public law relations.
In these circumstances, the claim should be returned, regardless of the wording of the claims, as not subject to consideration in administrative proceedings" (No. 7194-23-00-4/1127).
Or in another case, SMAS noted that "the plaintiff's claims in this case do not relate to public law relations, the plaintiff's claims are based on the terms of the Contract concluded between the parties.
The plaintiff disputes the defendant's refusal to extend the Contract.
Therefore, if there is an investment contract with the State, this dispute cannot be the subject of an administrative claim.
Based on the above, the court considers that the claim is not subject to consideration in administrative proceedings" (No. 7194-23 00-4/675). This is the issue that accounts for the largest number of refunds.
It is described in more detail in section 4.1 of this analysis.
We also note the following regarding the relatively low level of administrative claims. According to Part 1 of Article 120 of the CPC, reconciliation of the parties is allowed if the defendant has administrative discretion, which is the authority of an administrative body or official to make one of the possible decisions based on an assessment of their legality, for the purposes and limits established by the legislation of the Republic of Kazakhstan.
In this regard, the CPC does not oblige the judge to take measures to reconcile the parties, as established by Part 1 of Article 174 of the CPC.
This causes a difference in the number of reconciliations in administrative and civil cases.
In the future, it should be borne in mind that if the concept of an administrative contract is introduced into the APPC, appropriate changes will affect the reconciliation mechanism.
Abbreviations used
1) APPC – Administrative Procedural Code of the Republic of Kazakhstan;
2) CPC – The Civil Procedure Code of the Republic of Kazakhstan;
3) Civil Code of the Republic of Kazakhstan;
4) PC – Business Code of the Republic of Kazakhstan;
5) NP VS – Normative resolution of the Supreme Court of the Republic of Kazakhstan;
6) NC – The Tax Code of the Republic of Kazakhstan;
7) SCAD of the Astana City Court - the judicial board for administrative cases of the Astana City Court;
8) SCAD VS – judicial board for administrative cases of the Supreme Court of the Republic of Kazakhstan;
9) SMAS – Specialized Interdistrict Administrative Court;
10) SMEC – Specialized Interdistrict Economic Court;
11) The CGO is a central government agency.
Used regulatory sources
The rules of substantive law, which were guided by the courts when considering investment disputes, include the legislative acts currently in force.
The main regulatory legal acts regulating the issues of disputes of the generalized category are:
1) The Constitution of the Republic of Kazakhstan;
2) The Civil Code of the Republic of Kazakhstan dated December 27, 1994 No. 268-XIII;
3) Business Code of the Republic of Kazakhstan dated October 29, 2015 No. 375-V;
4) The Administrative Procedural Code of the Republic of Kazakhstan;
5) The Civil Procedure Code of the Republic of Kazakhstan;
6) Land Code of the Republic of Kazakhstan dated June 20, 2003 No. 442;
7) Budget Code of the Republic of Kazakhstan dated December 4, 2008 No. 95-IV;
8) The Code of the Republic of Kazakhstan dated December 25, 2017 No. 120-VI "On Taxes and other mandatory payments to the Budget" (Tax Code), etc.
Attention!
Law and Law Law Law draws your attention to the fact that this document is basic and does not always meet the requirements of a particular situation. Our lawyers are ready to assist you in legal advice, drawing up any legal document suitable for your situation.
For more information, please contact a Lawyer / Attorney by phone: +7 (708) 971-78-58; +7 (700) 978 5755, +7 (700) 978 5085.
Attorney at Law Almaty Lawyer Legal Services Legal Advice Civil Criminal Administrative Cases Disputes Protection Arbitration Law Firm Kazakhstan Law Office Court Cases
