February 2025 – Kinstellar acted for its client, Freschette Limited, in a case before the AIFC that resulted in a precedent setting judgement. The AIFC Court has delivered a judgement in AIFC Court Case No. 35 of 2024 – Freschette Limited v. Enegix LLP & Others, affirming its jurisdiction over foreclosure proceedings concerning pledged immovable property in Kazakhstan.
The case was brought by Freschette Limited, a foreign investor. Kinstellar advised the client on structuring the transaction which was basis for the case. Despite the absence of established court practice or clear regulatory guidance, Kinstellar strategically proposed a dispute resolution clause designating the AIFC Court as the exclusive forum for resolving disputes - a decision now validated by this landmark judgement.
Background of the dispute
A contractual default led the parties to enter into a settlement deed governed by English law, under which the debtor committed to repaying the debt in installments. To secure this obligation, the debtor’s affiliates pledged immovable property, including agricultural land. Both the settlement deed and pledge agreements explicitly designated the AIFC Court as the forum for dispute resolution.
Following the debtor’s failure to meet its payment obligations, Freschette Limited sought foreclosure through the AIFC Court. The defendants challenged the Court’s jurisdiction, arguing that under Article 31 and 467 of the Civil Procedure Code of Kazakhstan, disputes over real estate fall under the exclusive jurisdiction of Kazakhstani courts.
Key legal findings of the judgement
1. The AIFC Court’s Exclusive Jurisdiction over disputes conferred by the parties' agreement
The Court confirmed that under Article 13.4.3 of the AIFC Constitutional Statute, it has exclusive jurisdiction over disputes transferred to it by agreement of the parties. Since the settlement deed and pledge agreements expressly referred disputes to the AIFC Court, the Court affirmed its authority over the foreclosure claim.
2. Interaction with Kazakhstan’s Civil Procedure Code
The defendants argued that Articles 31 and 467 of the Civil Procedure Code conferred exclusive jurisdiction on Kazakhstani courts for land-related disputes. However, the AIFC Court clarified that Article 31 pertains to venue selection for cases already within the regular Kazakhstani court system and does not extend to override contractually agreed jurisdiction under the AIFC framework.
The Court emphasized that if Kazakhstan’s legislature seeks to limit the AIFC Court’s jurisdiction over real estate matters, amendments to the AIFC Constitutional Statute would be required, rather than reliance on procedural arguments based on the Civil Procedure Code.
3. Court’s discretion to accept jurisdiction
The Court considered its discretionary power under Article 26(10) of the AIFC Court Regulations and concluded that exercising jurisdiction was necessary to uphold legal certainty and contractual integrity.
Critically, the AIFC Court underscored its role in ensuring legal certainty for foreign investors. It recognized that Freschette Limited, an overseas entity, had deliberately chosen the AIFC Court due to concerns about litigating in local courts. Declining jurisdiction would have forced the foreign entity into a legal framework it had expressly rejected, undermining key principles of contractual certainty, investor protection, and Kazakhstan’s investment climate.
4. Recognition of the AIFC Court as a Kazakhstani institution
The Court dismissed arguments challenging its authority, confirming that the AIFC Court is a judicial institution of Kazakhstan, established under domestic law, distinct from the national judicial system, but fully authorized to adjudicate disputes within its jurisdiction.
5. Issuance of the first-ever anti-suit injunction
For the first time in its history, the AIFC Court granted an anti-suit injunction, restraining the defendant from pursuing parallel litigation in the Almaty Court. This ruling reinforces the enforceability of contractual dispute resolution clauses and prevents forum shopping, establishing a critical precedent for the protection of foreign investors in Kazakhstan.
This landmark ruling, issued by Justice Sir Rupert Jackson, cements the AIFC Court’s position as a leading venue for international commercial dispute resolution.
The full case details can be accessed via the following link: Case No. 35.
Our Dispute Resolution team in Kazakhstan was led by Ardak Idayatova ( Partner), and included Farukh Iminov (Associate), Usen Tastanbekov (Junior Associate), and Dinara Nurgazy (Associate).