{"id":185,"date":"2026-08-06T20:04:56","date_gmt":"2026-08-06T15:04:56","guid":{"rendered":"https:\/\/zan360.kz\/?p=185"},"modified":"2026-08-06T20:06:24","modified_gmt":"2026-08-06T15:06:24","slug":"blue-lagoon-jurisdiction-saga-in-kazakhstan","status":"publish","type":"post","link":"https:\/\/zan360.kz\/?p=185&lang=en","title":{"rendered":"Blue Lagoon Jurisdiction Saga in Kazakhstan"},"content":{"rendered":"\n

A recent court case in Kazakhstan has drawn particular attention. Despite an exclusive jurisdiction clause in favour of the courts of England and Wales and a contract governed by English law, a Kazakh court found that it had jurisdiction to hear the dispute. This is how it happened.<\/p>\n\n\n\n

Introduction<\/em><\/strong><\/h2>\n\n\n\n

The Blue Lagoon vessel was insured in 2024 by a German insurance company. The insurer subsequently entered into a reinsurance contract with several insurance companies around the world, including a well-known Kazakhstan insurance company («Company»<\/strong>). The execution of the reinsurance contract was arranged by a Kazakh insurance broker.<\/p>\n\n\n\n

On 1 October 2024, a storm struck off the coast of Taiwan, causing the vessel to run aground on rocks together with its cargo and crew. A large-scale rescue operation<\/a> was carried out to save all 19 crew members.<\/p>\n\n\n\n

The German insurer paid the vessel owner full indemnity under the insurance policy.<\/p>\n\n\n\n

In turn, all of the reinsurers indemnified the German insurer in accordance with their shares.<\/p>\n\n\n\n

However, the Company took the position that the reinsurance contract was in fact invalid and refused to make payment.<\/p>\n\n\n\n

Court Proceedings<\/em><\/strong><\/h2>\n\n\n\n

Company commenced three proceedings before Kazakhstan courts:<\/p>\n\n\n\n

    \n
  1. An application to the Bostandyk District Court seeking a declaration of a legally significant fact, namely that no reinsurance relationship existed. Company argued that it had been misled from the beginning about the subject matter of the insurance. The Court granted the application. Under Kazakh law, applications of this nature must be filed with the court at the applicant’s place of residence or registered office.<\/li>\n\n\n\n
  2. A claim before the Almaty Economic Court seeking a declaration that the reinsurance contract had not been concluded. These proceedings were discontinued at the claimant’s request.<\/li>\n\n\n\n
  3. A claim before the Almaty Economic Court seeking a declaration that the reinsurance contract was invalid. The company argued that the vessel’s flag had been incorrectly stated when the reinsurance contract was concluded and that this constituted grounds for declaring the contract invalid. The Economic Court upheld the claim.<\/li>\n<\/ol>\n\n\n\n

    The First-Instance Court’s Jurisdictional Analysis<\/em><\/strong><\/h2>\n\n\n\n

    The reinsurance contract contained a «Law and Jurisdiction»<\/strong> clause providing that:<\/p>\n\n\n\n

    \n

    «This reinsurance shall be governed by and construed in accordance with the law of England and Wales and each party agrees to submit to the exclusive Jurisdiction of the Courts of England and Wales.»<\/p>\n<\/blockquote>\n\n\n\n

    In concluding that it had jurisdiction to hear the dispute, the Economic court relied on another provision of the contract — «Intermediary Clause»<\/strong>, which provided that the reinsurers were required to refund the reinsurance premium if the insurance (reinsurance) contract was declared invalid or void by the court of the Republic of Kazakhstan.<\/p>\n\n\n\n

    Relying on the Intermediary Clause, the court concluded that:<\/p>\n\n\n\n

    \n

    \u201cThe parties expressly provided for the application of the laws of the Republic of Kazakhstan and determined the legal consequences in the event that the contract was declared invalid by a court of the Republic of Kazakhstan. Such a provision demonstrates the parties\u2019 mutual intention that the legal relationship in question should be governed by Kazakh law.\u201d<\/p>\n<\/blockquote>\n\n\n\n

    Accordingly, the court concluded that Kazakh law was applicable and that it had jurisdiction to hear the dispute.<\/p>\n\n\n\n

    Legal Aspects<\/em><\/strong><\/h2>\n\n\n\n

    From a legal perspective, several aspects of these proceedings are particularly noteworthy:<\/p>\n\n\n\n

      \n
    • In all three proceedings, Company named the Kazakh insurance broker as the defendant, even though, despite its involvement in the execution of the reinsurance contract, it was not a party to that contract. Under both Kazakh law and international insurance practice, an insurance broker acts as an intermediary between the insured and the insurer.<\/li>\n\n\n\n
    • Article 468 of the Civil Procedure Code of Kazakhstan expressly provides that where the parties have agreed on the jurisdiction of a foreign court, the dispute must be heard by that foreign court. In such circumstances, proceedings commenced before a Kazakh court must be dismissed without consideration.<\/li>\n\n\n\n
    • The courts applied Kazakh law when declaring the reinsurance contract invalid, even though the contract expressly provides that it is governed by the law of England and Wales. In addition, the first-instance court interpreted the Institute Time Clauses \u2013 Hulls<\/strong>, which are governed by and must be interpreted in accordance with English law and practice, without obtaining the opinion of an English law expert.<\/li>\n<\/ul>\n\n\n\n
      \"\"<\/figure>\n\n\n\n

      The Appellate Court Overturned the First-Instance Decisions<\/em><\/strong><\/h2>\n\n\n\n

      After losing at first instance, the insurance broker appealed both judgments to the Almaty City Court, the appellate court.<\/p>\n\n\n\n

      The Almaty City Court heard both appeals on the same day and set aside the first-instance judgments.<\/p>\n\n\n\n

      The Appellate Ruling on the Application to Establish a Legally Significant Fact<\/em><\/strong><\/h2>\n\n\n\n

      In case No. 7599-26-00-2a\/8215, the Almaty City Court held that the application seeking a declaration that no reinsurance relationship existed should not have been considered under the special proceedings for establishing a legally significant fact.<\/p>\n\n\n\n

      In support of its conclusion, the court stated that the application had in fact been brought to determine the existence or absence of contractual relations and civil law obligations. Such issues could only be resolved in contentious proceedings.<\/p>\n\n\n\n

      The Almaty City Court also noted that the first-instance court had committed serious procedural errors as a result of the judge’s bad faith, negligence and lack of knowledge of the law.<\/p>\n\n\n\n

      The Appellate Ruling in the Proceedings to Declare the Contract Invalid<\/em><\/strong><\/h2>\n\n\n\n

      In case No. 7599-26-00-2a\/8389, the Almaty City Court held that the first-instance court had incorrectly determined the jurisdiction of the dispute.<\/p>\n\n\n\n

      The appellate court found that the jurisdiction clause should have been applied directly and that Kazakh law was not applicable to the dispute.<\/p>\n\n\n\n

      As for the Intermediary Clause<\/strong>, the court stated:<\/p>\n\n\n\n

      \n

      «This clause governs exclusively the procedure for the refund of the insurance premium as a consequence of the original insurance contract being declared invalid, since only where the original insurance contract is declared invalid are the reinsurers required to refund the reinsurance premium under the reinsurance slip, in proportion to the refunded insurance premium and within their shares.»<\/p>\n<\/blockquote>\n\n\n\n

      The Almaty City Court also confirmed that the broker was merely an intermediary acting on behalf of the reinsured, a foreign insurance company.<\/p>\n\n\n\n

      Accordingly, the court concluded that the dispute was not capable of being determined in civil proceedings before the courts of the Republic of Kazakhstan, as no decision on the merits could be rendered by those courts.<\/p>\n\n\n\n

      Significance for Kazakhstan Legal Practice<\/strong><\/h2>\n\n\n\n

      First and foremost, it is important that the Almaty City Court prevented parallel proceedings. This occurs when, in breach of the parties’ agreement, one party seeks to obtain a judgment in its own jurisdiction in order to rely on it during the recognition and enforcement of a foreign judgment.<\/p>\n\n\n\n

      The Almaty City Court reaffirmed the commitment of the Kazakhstan courts to respecting and giving effect to the parties’ contractual agreements, particularly their agreement on the forum for resolving disputes.<\/p>\n\n\n\n

      Although judicial precedent is not recognised as a source of law in Kazakhstan, courts nevertheless take existing judicial practice into account.<\/p>\n\n\n\n

      <\/p>\n","protected":false},"excerpt":{"rendered":"

      Despite an exclusive jurisdiction clause in favour of the courts of England and Wales and a contract governed by English law, a Kazakh court found that it had jurisdiction to hear the dispute. This is how it happened.<\/p>\n","protected":false},"author":1,"featured_media":187,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":3,"footnotes":""},"categories":[131],"tags":[],"class_list":["post-185","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cases-en"],"_links":{"self":[{"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/posts\/185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zan360.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=185"}],"version-history":[{"count":3,"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/posts\/185\/revisions"}],"predecessor-version":[{"id":190,"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/posts\/185\/revisions\/190"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zan360.kz\/index.php?rest_route=\/wp\/v2\/media\/187"}],"wp:attachment":[{"href":"https:\/\/zan360.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zan360.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zan360.kz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}