International Commercial Courts Focus: 5 Years Of The Astana International Financial Centre Courts
Over the last fifteen years, or so, there has been a growth in the number and prominence of International Commercial Courts. These courts are usually English language common law courts, often but not always, established alongside an International Arbitration Centre and/or an International Financial Centre such as the Dubai International Financial Centre or the Astana International Financial Centre (‘AIFC’). The hierarchy of courts in jurisdictions that have International Commercial Courts sees these ‘offshore courts’ situated alongside the older established ‘onshore courts’ and the former unlike the latter often have British, American and Australian judges serve on the courts. The courts common law approach, drawing on the well-established history of commercial dispute resolution in London, the Commercial Court there goes back to 1895,[1] is intended to assuage investor concerns as in default of the International Commercial Court model the investors would not be as familiar with the local onshore courts model. As the AIFC was 5 years old during the summer it is an apt time to review developments since 2018 with that International Commercial Court.
[1] The History of the Commercial Court - Courts and Tribunals Judiciary
Kazakhstan located in Central Asia, by area, is the ninth largest country in the world and is roughly the same size as Western Europe albeit it has a population of around 18 million. It borders China and Russia and has enjoyed significant economic growth since becoming independent around 30 years ago. It is a resources rich country with very significant reserves of oil, precious metals and uranium. In recent years it has mined around half of the world’s supply of uranium. According to the International Monetary Fund (IMF) forecast, Kazakhstan's economy will grow by 4.3% in 2023 and by 4.9% in 2024, much higher than the world average increase of 1.8% in 2023 and 2% in 2024.[1] Nearly 2,000 companies from 75 countries operate at the AIFC. International financial institutions, including Chinese banks, financial companies from the gulf region, and large technology companies have opened offices at the AIFC. AIFC Governor Renat Bekturov told the Astana Times that the centre had attracted around £7 billion in investment since its launch.[2] This successful build-up of infrastructure has been matched by a recent notable increase in the capacity of the AIFC Courts. As the Court itself notes:
[1] Kazakhstan’s Economy Grows 5% in First Half of 2023 - The Astana Times
[2] Astana Times
‘ By 7 June 2023 the AIFC Court and IAC had completed and enforced 2,174 cases, including 64 AIFC Court Judgments, 415 arbitration awards, and 1,695 mediation settlements. The case volume growth has increased in 2023 with 533 cases completed and enforced since 1 January 2023, i.e., 24.5% of the total number of cases since operations commenced on 1 January 2018.’
Around half of the cases that have been heard involve at least one non-Kazakh party. The significance in this recent uplift in the volume of cases should be seen in the context of the first AIFC judgment being in April, 2019 case of Aurora AG Limited v Star Asian Mining Company LLP [2019] (25 April 2019) (when there was no hearing) with the first hearing arising in July, 2020 in the case of Aliyev v Proportunity Management Company Ltd (Case No. 2 of 2020).
Whilst a, by area, very large country Kazakhstan (which has only been independent since the end of 1991) is perhaps still not well known outside of Central Asia. As a result, the AIFC Courts was established with care in a traditional manner, broadly following the template established by the Dubai International Financial Centre Courts, which at that time had been in operation for 12 years. As former Kazakh Prime Minister Karim Massimov noted at the time of its first year of operation:
“The Astana International Financial Center is a new project, similar to what has been done in London many centuries ago, and Dubai and Singapore a few decades ago. We are going to create a finance center based on English common law, in English language, and an independent court.[1]’
In light of that traditional approach the AIFC’s judiciary is drawn exclusively from England and Wales. The present Chief Justice is Lord Mance (the former Deputy President of the UK Supreme Court). Lord Mance succeeded the former Lord Chief Justice of England and Wales Lord Woolf as head of the AIFC Courts. There is obviously a time lag between an International Commercial Court and/or International Arbitration Centre being launched and it starting to hear cases, and then build up its case load. The AIFC Court started to ‘bed in’ from 2019/2020 after and there has been an impressive increase in its activity. Not all International Commercial Courts have or will be successful for several years the Brussels International Business Court was said to be coming on tracks, with a belief that ‘Brexit’, voted for in 2016 and coming into effect from January, 2020 would create opportune conditions to grow Brussels as a hub for English language disputes. However, the launch was postponed in 2019 and does not now seem likely.[2] The AIFC has been established, got through its early years and seems likely to continue to grow in scale and scope in light of the very significant increase of cases already referred to.
[1] Kazakhstan Adopts English Law to Inspire Investor Confidence (bloomberg.com)
[2] Problems for the Brussels International Business Court - Lexology
