In Ruby Roz Agricol and Kaseem Omar v Kazakhstan, UNCITRAL (Award on Jurisdiction) (1 August 2013), Ruby Roz Agricol LLP (Ruby Roz), a Kazakh company in the business of producing, breeding and marketing poultry for the Kazakh market, initiated UNCITRAL arbitration proceedings against the Republic of Kazakhstan on the basis of alleged breaches of Kazakh law and international law, amounting to expropriation of its assets.
Two alternative bases for jurisdiction were submitted – the 1994 Kazakh Law of Foreign Investment (FIL) and an investment contract (Contract), which had later been amended by the parties.
The Tribunal rejected jurisdiction under both instruments, at a late stage in proceedings. Under the FIL, Ruby Roz’s right to rely on the arbitration clause had expired. The legislation had been repealed and the stabilisation clause, which might have protected Ruby Roz’s right to arbitrate, took effect from the date of the Contract – meaning that the stabilisation period had ended. Under the Contract, Ruby Roz was not entitled to rely on the arbitration clause because as a foreign-owned Kazakh company, it did not qualify as a “foreign investor”.
The case is of interest to investors in Kazakhstan and clients and practitioners interested in effective arbitration case management. It highlights the advantage of identifying an arguable jurisdictional point early, and in advance of incurring significant costs in addressing issues of liability. It also highlights the importance of ensuring an arbitration clause will survive the termination of any other applicable instrument. Continue reading