The AIFC Court judgment confirmed that the arbitral tribunal in an anonymized IAC arbitration had jurisdiction and dismissed Claimant A and Claimant B's challenge to the tribunal's determination of competence. The court held that an arbitration clause referring disputes to the IAC and stating that the seat would be Nur-Sultan/Astana, Kazakhstan selected the AIFC as the arbitral seat when read in context. That meant the AIFC Arbitration Regulations governed the arbitration, not the domestic Kazakh Law on Arbitration rule on state-entity consent. The defendant's separate anti-suit injunction application was also dismissed because the parallel local-court proceedings had ended and no new proceedings were pending or threatened.
Background
Claimant A, Claimant B, and Defendant were parties to a chain of agreements that ultimately sent disputes to arbitration administered by the IAC under the IAC Arbitration and Mediation Rules. The settlement deed provided for three arbitrators, stated that the seat of arbitration would be Nur-Sultan, Kazakhstan, made the law of the seat the law governing the arbitral proceedings, and selected Russian as the language of the arbitration. The later renaming of the capital meant the reference to Nur-Sultan was read as Astana.
Defendant commenced IAC arbitration against Claimant A and Claimant B. The claimants challenged the tribunal's competence, arguing that the seat was Astana outside the AIFC, so ordinary Kazakhstan arbitration law applied. On that view, Article 8(10) of the Kazakh Law on Arbitration required consent from the relevant authorised body because the dispute involved a legal entity in majority state ownership; without that consent, the arbitration clause was said to be invalid.
The arbitral tribunal rejected the challenge and ruled that it had jurisdiction, including because the seat was the AIFC. Claimant A and Claimant B then asked the AIFC Court under Regulation 26(3) to decide the jurisdiction issue. Defendant sought the opposite ruling and also applied for an anti-suit injunction to restrain further local-court attacks on the arbitration agreement.
The Court's Decision
The court read the arbitration clause objectively and as a whole. The reference to Nur-Sultan/Astana, Kazakhstan did not select ordinary Kazakhstan arbitral law in isolation. In context, the clause chose IAC arbitration; the IAC is located in the AIFC; and the clause made the law of the seat the procedural law. The better reading was therefore that the parties selected the AIFC in Astana as the seat of arbitration.
That interpretation brought the arbitration within the AIFC Arbitration Regulations. Regulation 7 excludes the requirements of Kazakhstan's Arbitration Law for arbitrations conducted under those Regulations, so Article 8(10) could not invalidate the arbitration agreement or deprive the tribunal of jurisdiction. The court therefore did not need to decide Defendant's further estoppel arguments or the argument about whether Article 8(10) could be invoked by privately owned companies.
The court also refused the anti-suit injunction. The local Kazakhstan proceedings had already been returned or dismissed, no parallel proceedings were pending, and there was no evidence that Claimant A or Claimant B intended to start new proceedings. On that record, the requested injunction was speculative and the threshold for injunctive relief was not met.
Result
The AIFC Court held that the arbitral tribunal has jurisdiction to hear the dispute in the IAC arbitration and dismissed Claimant A and Claimant B's challenge to the determination of competence. It also dismissed Defendant's application for an anti-suit injunction. Any costs application is to be dealt with in writing.