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Kazakhstan Ministry of Justice and National Bank win in Stati case in England

Collage © Adilbek Tauekelov / Kazpravda.kz
The Ministry of Justice and the National Bank of Kazakhstan won the Stati case in England, Kazpravda.kz refers to the press service of the Ministry of Justice reporting.

"On March 11, 2021, the High Court of England ruled to decline Stati's petition to set aside the order for reimbursement of legal costs, under which they were to pay to the Republic of Kazakhstan and the National Bank of Kazakhstan (National Bank) more than $ 3.7 million. The Stati Parties’ application was heard by Costs Judge Rowley of the Senior Courts Costs Office of the High Court of Justice of England and Wales on 15 February 2021," the statement reads.

It is noted that the order for the reimbursement of legal costs concludes the proceedings in the High Court of England, associated with Stati's ongoing attempts to enforce the arbitral award against Kazakhstan.

Having lost the English proceedings, the Stati Parties were ordered to pay the costs but failed to do so. They also failed to react when their counsel King & Spalding was notified in December 2020 that following the Stati Parties’ failure to engage with Kazakhstan and NBK, ROK and NBK were initiating detailed assessment proceedings of their costs, resulting in the default costs order being made on 6 January 2021 after their 21 days for responding had elapsed. They have now also lost on their attempt to set aside the default cost order.

In his witness statement King & Spalding partner Egishe Dzhazoyan describes that it took him two weeks to instruct cost lawyers and a further two weeks to transfer the full file: “It took my firm two weeks or so to arrange for a transfer of a copy of the entire electronic data set/file in the required .pst format (…) which was shared with [the cost lawyers] on 4 February 2021. The reason behind the slight delay was to do with the need to seek and obtain certain internal approvals from my firm’s Director of Records & Information Governance concerning collating and sharing this type of data in light of my firm’s data privacy protection policies and procedures.”

In his judgment, Costs Judge Rowley reproduces this part of the witness statement and finds that “It does not make good reading.” He goes on to say: “Taking a (further) fortnight to produce a data file in what is a common format for emails in Outlook is surprising. Describing it as “a slight delay” is euphemistic and the reason given for the delay of there being an internal governance issue is both surprising and unconvincing. In circumstances where some criticism of [King & Spalding] might be levied – since that is always a possibility where a default judgment has been entered – it might be thought that priority would be given to any necessary internal approvals being obtained.” He further finds: “In my judgment, the Stati parties have failed to act with sufficient promptness…”. Applying the legal test leads Costs Judge Rowley to find that “there is no doubt in my mind that the failure to comply with the time limit for serving points of dispute is a serious breach of the rules…” and that “there is no good explanation for the breach.”

The Minister of Justice of the Republic of Kazakhstan, Marat Beketayev, welcomes this decision: “We will continue to take all necessary measures to ensure the enforcement of judgments issued by the English court, and we will continue to oppose Stati’s actions to enforce the arbitral award in other jurisdictions."

Author:
Aidana Demesinova
09:33, 12 March 2021
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