Foreign Inveatment

In: Business and Management

Submitted By ruslan
Words 717
Pages 3
One of the problems concerning the foreign direct investment is a choice of law that can lead to the prolongation of court proceedings. The government of the Republic of Kazakhstan should introduce a separate legislation for the determination of applicable law in cases regarding foreign direct investment. Kazakhstani courts face this problem when parties didn’t include the applicable law clause in their contract. When such disputes arise courts preliminarily examine the contracts. The problems with defining of applicable law arise when these contracts don’t include the provision of applicable law and one of the parties is a foreign state. “Puis International” v.”GMK Kazakhstan” Open Joint Stock Company is one of such cases in Kazakhstan’s practice with the choice of law cases. Puis International, a plaintiff is a company organized under Israel law and GMK Kazakhstan, a defendant is a company organized under Kazakhstani law. So, one of the parties is a foreign state. The plaintiff claimed to return back money which was given to the defendant in a form of a loan. The parties signed the Agreement on Financial Assistance dated 12 December 1999 and the Agreement on Allocation of Indemnity dated 23 February 2001 but these agreements did not included the terms of applicable law. The Defendant made a motion to Akmolinsk regional court to suspend proceedings for the purposes of proper determination of applicable law in order to determine Israel law in Ministry of Justice or other authorities of the Republic of Kazakhstan and abroad or otherwise to attract experts in accordance with the Article 1086 subsection 2 of the Civil Code of the Republic of Kazakhstan. The defendant’s motion was rejected because court didn’t find the reason of problem of determination of the applicable law. In accordance with the facts of this case one of the parties is a foreign state but the…...

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