• Pavel Masliy

5 Advices. Company sues for a debt against other company. What should you know?

First of all, company should prepare all appropriate documents before to sue to a court. Kazakhstani legislation has some straight requirements within applying a claim for debt.

1. You should have original contract between your company and the debtor. However, a judge may consider a copy of the contract in case you lost for example your sample. Nevertheless, better if you have original sample for verification within hearing. Therefore, take care to arrange such simple issue.

Advice. Please pay attention for the place of court hearing in the contract. If the contract has no provision name of appropriate court but basic wording says, for example “…conflict shall be resolved in according with legislation of Kazakhstan” then,

(1) the court hearing will be set where defendant is registered. It may be a different region of Kazakhstan. Therefore, you will have such expenses as transportation and postal. Undoubtedly, you may demand to reimburse such expenses but take note that these expenses will be frozen until all the court procedure have completed and finally the debtor available to pay the money.

(2) if the contract provision the place of fulfillment works or services then you may sue to the regional court where the works or services had provided to defendant.

(3) you also have a chance to sue to the regional court where the property (immovable) located (registered).

(4) finally, you may agree the place of court hearing with the defendant. However, legal practice shows it is very barely chance because locals have a low level of legal and business culture yet.

2. Original acts of accepted works or services. It is very important that acts must be signed and stamped by the debtor. Otherwise, the judge may not accept the documents as confirmation to your claim. Additionally, we advise you regularly agree (sign and stamp) act of verification between companies, it is legally valid as well as act of accepted works or services.

3. Once you decided to sue, take note you should pay legal expenses in advance if you want to get such expenses back from the debtor upon litigation completed. In accordance with Civil Procedure Code such incurred expenses should not be over 10% of the claim. Nevertheless, legal practice shows a negative tendency of the judges approach. Currently, even if the company had incurred legal expenses within 10% the judge will not confirm them to reimburse from the debtor. The judge may approve any percent of incurred expenses, it may 1%, 3% or 7%. It is no matter how much company had paid to lawyer it is matter the judge estimates based on his internal feelings. As a consequences such approach is a bad basement of business culture because defendants do not feel responsibility for breaking conditions of contracts. Moreover, claimants spend much time to get back their money back, they spend extra money (legal expenses) to get debts back. We suppose, currently the judge system works for wrong way. Logos thinks about client, therefore always offer an option to save time and client’s money.

4. Depends from mode of the court hearing a company shall pay state fee from 1,5% to 3% from the claim. Kazakhstani legislation provision:

(1) Imperative mode of court hearing. State fee 1,5% of the claim cost. The judge issues an order of court within 3 workdays. Positive side of such mode is that no need to come to a court and fast procedure. There some specific requirements for company to use such mode but once you have all needed confirmation documents it is possible to proceed through it.

(2) simplify mode of court hearing. State fee 3% of claim. State procedure - approximately 20 workdays. Special conditions - claimant shall provide the judge with all needed confirmation documents, which are signed and stamped from both sides. Such mode provision ability no to come to a court hearing. However, if the defendant does not agree with the claim he may switch to usual mode of the hearing.

(3) usual mode of court hearing. State fee 3% of claim. State procedure - up to 3 month.

5. You should control the time of addressing a claim. It should not be too early because the judge will ask “Why do you press and not provide with some time to let the debtor manage the case”. At the same time, the claim should not be addressed too late because the judge may consider such approach as an opportunity intentional increasing penalties and fines. As a consequence the judge may cut demands but a company overpay state fee and other legal expenses.

Hope, such advices will be useful to your business.

Best regards,


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