1. Introduction. – 2. International Public-Private contract-based Arbitration. – 3. Overview of the concession agreement model. – 4. Subjective arbitrability in international commercial arbitration. – 5. Legal framework of the Republic of Kazakhstan and comparative analysis with the Kyrgyz Republic jurisdiction. – 6. Conclusions.
Background: Concession agreements are becoming increasingly important in Central Asian countries as a contractual mechanism for interaction between state authorities and a foreign private entity. Furthermore, this question is becoming increasingly relevant as foreign investment in this region becomes more appealing. In this context, international arbitration, while maintaining sufficient neutrality, is becoming increasingly relevant for resolving disputes under such agreements.
Furthermore, the issue of arbitrability in public-private arbitration disputes warrants additional attention, given the underexplored nature of the concept and its regulation. In this regard, the review of the arbitration framework in Kazakhstan serves a dual purpose: providing a foreign investor with information to better understand this issue and identifying areas for improvement in the current regulation. Such alignment is vital to maintaining legal certainty and enhancing this region’s attractiveness as a destination for foreign investment, particularly in sectors reliant on long-term, capital-intensive partnerships.
Method: This study is empirically grounded in a comprehensive examination of national legislation governing concession agreements and commercial arbitration, and Kazakhstan’s jurisdiction, with particular emphasis on the extent and nature of limitations on subjective arbitrability in disputes arising from concession agreements. Furthermore, this analysis is supplemented by a comparative legal method that examines arbitration frameworks in other relevant jurisdictions. In this context, a comparative analysis is undertaken to explore the similarities and differences in the legal regulation of Kazakhstan and Kyrgyzstan. In addition, the research applies logical and legal reasoning to identify the most relevant legal doctrines that intersect with the problem of arbitrability in concession agreement disputes.
Results and conclusion: The findings indicate a lack of legal certainty in Kazakhstan’s legislation regarding the subjective arbitrability of disputes involving state entities under concession agreements. To minimize the risk of arbitration proceedings being challenged by Kazakhstan based on grounds of subjective arbitrability, which may lead to concerns among foreign investors, it is recommended that the Kazakh arbitration legislation be amended to establish a clear requirement for state entities to obtain the prior consent of a duly authorized government agency before concluding arbitration agreements. In addition, legislation should clearly define the procedure and time frame for obtaining such consent to ensure consistency and legal predictability. Given that the concession agreement model is widespread in Kazakhstan, this legislative change will increase foreign investors’ trust, potentially leading to higher investment inflows. At the same time, at the current stage, it is advisable for foreign companies considering investing in Kazakhstan to specify the seat of arbitration, which minimizes the impact of Kazakhstan legislation governing the legal capacity of state entities to enter into arbitration agreements or as a more preferable option to require the state entity to obtain the prior consent of an authorized government agency to enter into such agreements and participate in arbitration proceedings.