Expenses Incurred in Carrying Out Enforcement Actions and Their Reimbursement at the Expense of the Debtor

A private enforcement officer independently finances their activities.

In accordance with subparagraph 7) of Article 3 of the Law on Enforcement Proceedings, enforcement proceedings are carried out based on the principle that expenses incurred for the compulsory enforcement of an enforcement document shall be reimbursed at the expense of the debtor.

According to Article 114 of the Law on Enforcement Proceedings, expenses incurred in carrying out enforcement actions shall be recovered from the debtor in favor of the persons or organizations that incurred such expenses.

The debtor has the right to apply to the court to challenge the enforcement officer’s ruling on the recovery of expenses incurred in carrying out enforcement actions, as well as to request a deferral or installment payment of such expenses, a reduction in their amount, or exemption from their recovery (paragraph 5 of Article 114 of the Law on Enforcement Proceedings).

The most common grounds for filing claims at this stage of enforcement proceedings are:

• incorrect calculation of the remuneration for the enforcement officer’s services;
• incorrect calculation of the actual expenses incurred;
• approval of the amount of remuneration outside the framework of enforcement proceedings.

Such interest in having the ruling annulled is also due to the fact that enforcement documents include:

• a ruling on the recovery of an enforcement sanction;
• a ruling of the enforcement officer on the reimbursement of expenses incurred in carrying out enforcement actions;
• a ruling approving the amount of remuneration for the private enforcement officer’s services.

In the absence of payment, these documents may result in the initiation of enforcement proceedings with the application of compulsory enforcement measures.

Part 2 of Article 138 of the Administrative Procedure and Process Code provides for 17 grounds for returning an administrative claim.

Cases of this category are most frequently returned on the following grounds:

• subparagraph 6) of Part 2 of Article 138 of the Administrative Procedure and Process Code – the claimant has withdrawn the filed claim;
• subparagraph 9) of Part 2 of Article 138 of the Administrative Procedure and Process Code – the parties have entered into a settlement, mediation, or agreement to resolve the dispute through a participatory procedure, and such agreement has been approved by the court;
• subparagraph 11) of Part 2 of Article 138 of the Administrative Procedure and Process Code – the case is not subject to consideration under administrative court proceedings;
• subparagraph 17) of Part 2 of Article 138 of the Administrative Procedure and Process Code – the case falls outside the jurisdiction of the respective court.

In addition, Part 8 of Article 136 of the Administrative Procedure and Process Code provides another ground for returning a claim. Namely, missing the deadline for filing a claim with the court without valid reasons, as well as the impossibility of restoring the missed deadline for applying to the court, constitute grounds for returning the claim.

Courts do not encounter difficulties in resolving the issue of returning claims in this category of cases.

At the same time, the implementation of the principle of the court’s active role has made it possible to significantly increase the number of cases resolved amicably, either through the conclusion of an agreement or the withdrawal of a claim.

In accordance with Article 118 of the Law on Enforcement Proceedings, remuneration for the activities of a private enforcement officer shall be paid within the framework of enforcement proceedings at the expense of the debtor’s funds, except in cases provided for by this Law. It is established at a rate ranging from three to twenty-five percent, depending on the category of the case and the amount to be recovered, subject to a maximum limit not exceeding ten thousand monthly calculation indices.

The methodology for calculating expenses related to enforcement proceedings shall be approved by the authorized body.

In practice, there are also cases where payment is made directly, bypassing the enforcement officer, but within the framework of initiated enforcement proceedings.

Where a Dispute Arises as to the Voluntary Nature of Compliance with the Requirements of an Enforcement Document

Where a dispute arises as to whether the requirements of an enforcement document were voluntarily complied with, the following circumstances should be examined:

• whether the debtor was duly notified of the initiation of enforcement proceedings;
• the compulsory enforcement measures taken by the enforcement officer (seizure of funds, property, etc.);
• the period during which the enforcement document was subject to compulsory enforcement.

Based on a literal interpretation of the provisions of the Law on Enforcement Proceedings, submission of an enforcement document for enforcement implies the absence of an intention to comply with it voluntarily.

Payment of the enforcement officer’s remuneration and reimbursement of expenses incurred in carrying out enforcement actions are consequences of the debtor’s bad faith.

Compliance with the requirements of an enforcement document during enforcement proceedings entails the debtor’s obligation to pay the enforcement officer’s remuneration and reimburse the expenses incurred in carrying out enforcement actions.

The debtor’s compliance with an enforcement document without involving a private enforcement officer does not exempt the debtor from reimbursing the actual expenses incurred in the enforcement process or from paying the private enforcement officer’s remuneration.

For example, in order to confirm voluntary compliance with non-monetary requirements (removal of the claimant’s personal data from social media), the debtor submitted video recordings. However, no such evidence had been submitted before the initiation of the enforcement proceedings. The enforcement proceedings were initiated on the basis of the enforcement writ submitted for enforcement. Actual compliance was recorded by the private enforcement officer within the framework of the initiated enforcement proceedings (6001-22-00-6ап/612).

Voluntary compliance with a court judgment before the initiation of enforcement proceedings must be confirmed by admissible and reliable evidence.

Disputes also arise regarding the procedure for reimbursing expenses incurred in paying the enforcement officer’s remuneration where the decision of the relevant authority, on the basis of which the enforcement document was issued, is subsequently annulled after the enforcement proceedings have been terminated.

When considering this category of disputes, the following circumstances are subject to verification:

• whether the debtor was duly notified of the initiation of enforcement proceedings and acquainted with the materials of the enforcement proceedings;
• the date of initiation of the enforcement proceedings, the date of their termination, and the date on which the decision of the relevant authority, on the basis of which the enforcement document was issued, was annulled;
• whether the enforcement officer was duly notified of the annulment of the decision or whether the debtor submitted an appropriate objection.

If the relevant decision is annulled after actual enforcement has taken place and the enforcement proceedings have been terminated, the debtor has the right to apply for reversal of the enforcement of the court judgment (if the enforcement writ was issued on the basis of a judicial act) or to file a civil claim for recovery of the losses incurred. In this case, the claimant in the enforcement proceedings acts as the defendant.

Pursuant to paragraph 6 of Article 48 of the Law on Enforcement Proceedings, compulsory enforcement measures shall be cancelled where the claimant has reimbursed the actual expenses incurred in the enforcement process and has paid the remuneration of the private enforcement officer.

Disputes also arise concerning the procedure for recovering the above-mentioned expenses. Claimants often disagree with the calculation of the actual expenses incurred, pointing to the absence of documentary evidence confirming such expenses.

For example, before full enforcement was completed, the claimant withdrew the enforcement document, and the enforcement proceedings were terminated. However, the private enforcement officer approved the amount of remuneration for his services based on the full amount to be recovered. The courts found this ruling unlawful and annulled it (6001-22-00-6ап/219).

A similar situation occurred in several enforcement proceedings conducted by the private enforcement officer. Thus, 32 enforcement documents for the recovery of amounts in favor of a bank were pending enforcement by the private enforcement officer. The claimant withdrew all the enforcement documents. The private enforcement officer refused to return the enforcement writs, referring to the need to pay remuneration for his services. At the same time, he approved the amount of his remuneration at 10%, 15%, and 20% of the amount of indebtedness under the enforcement documents. All such rulings were declared unlawful (6001-22-00-6ап/371).

Pursuant to Article 119 of the Law on Enforcement Proceedings, before the initiation of enforcement proceedings, the claimant, upon the instruction of the private enforcement officer, is required to deposit into the current account designated for the safekeeping of amounts recovered in favor of claimants the amount necessary to carry out enforcement actions. Upon initiation of enforcement proceedings, the private enforcement officer may set a later deadline for the claimant to deposit such amount. If, during the enforcement proceedings, the funds deposited into the current account designated for the safekeeping of amounts recovered in favor of claimants prove insufficient to carry out further enforcement actions, the claimant, upon the instruction of the private enforcement officer, is required to deposit an additional amount into the specified current account.

In the context of the above-mentioned Ruling of the Plenary Session, it is recommended that the establishment of a minimum amount of remuneration for the activities of private enforcement officers be considered.

Pursuant to paragraph 3 of Article 76 of the Constitution of the Republic of Kazakhstan, court judgments that have entered into legal force are binding upon all state bodies, local self-government bodies, legal entities, officials, and citizens and are subject to enforcement throughout the territory of the Republic of Kazakhstan.

The purpose of enforcement proceedings is to ensure the actual restoration of violated or disputed rights or legally protected interests.

Challenging the actions (inaction) of an enforcement officer constitutes a form of judicial control in enforcement proceedings, the purpose of which is to protect the rights and interests of the parties to the enforcement proceedings.

The main regulatory legal acts governing enforcement proceedings are:

The Constitution of the Republic of Kazakhstan;

Administrative Procedural and Process Code of the Republic of Kazakhstan (APPC);

Civil Code of the Republic of Kazakhstan (CC);

Civil Procedure Code of the Republic of Kazakhstan (CPC);

Law on Enforcement Proceedings;

Law of the Republic of Kazakhstan “On Appraisal Activities in the Republic of Kazakhstan”;

Regulatory Resolution No. 1 of the Supreme Court of the Republic of Kazakhstan dated March 31, 2017, “On the Application by Courts of Certain Provisions of Legislation on Enforcement Proceedings”;

Regulatory Resolution No. 12 of the Supreme Court of the Republic of Kazakhstan dated December 19, 2003, “On Liability for Non-Execution of Judicial Acts”;

Rules approved by Order No. 100 of the Minister of Justice of the Republic of Kazakhstan dated February 20, 2015;

Resolution No. 437 of the Government of the Republic of Kazakhstan dated May 4, 2014, “On Approval of the Amounts of Remuneration for the Activities of Private Enforcement Officers.”

Abbreviations Used:

APPC – Administrative Procedural and Process Code of the Republic of Kazakhstan;

CPC – Civil Procedure Code of the Republic of Kazakhstan;

CC – Civil Code of the Republic of Kazakhstan;

Law of the Republic of Kazakhstan “On Enforcement Proceedings and the Status of Enforcement Officers” – Law on Enforcement Proceedings;

RSC – Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan;

Rules for the Sale of Seized Property, Including through Electronic Auctions – Rules;

AIAS – Automated Information and Analytical System of the Judicial Bodies of the Republic of Kazakhstan “Tөрелік”;

SCAC of the Supreme Court – Judicial Collegium for Administrative Cases of the Supreme Court of the Republic of Kazakhstan;

SCAC or Collegium – Judicial Collegium for Administrative Cases;

SMAAC – Specialized Inter-District Administrative Court;

DJ – Department(s) of Justice;

GEO – State Enforcement Officer(s);

PEO – Private Enforcement Officer(s).

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