Kazakhstan’s experience of converging English and European continental law

In today’s globalized world, there are fewer and fewer areas that remain uninfluenced by neighboring countries, international practices, or other factors. This also applies to legal fields of many countries. There is a constant search for the most successful legislative model or a mixture thereof, which would facilitate the daily life of people and companies, and in case of conflict situations, resolve them in the quickest and most efficient way.

There are a number of countries in the world, both developing and developed, where the state has moved away from the usual model of following the strict doctrine of a particular school of law. Countries with multiple legal families operating simultaneously and successfully include Canada (Province of Quebec), Scotland, Malaysia, Philippines, Sri Lanka, Israel, and some others.

It should be understood that the implementation of case law in a country belonging to the European continental legal family should be carried out if there is a need for it, with great care, as it is a very long, costly, and time-consuming process. I believe that the question of the feasibility of implementation can be discussed primarily in the financial sphere, as it is more international in nature. As an example, the Scottish legal system is a mixture of legal fields. It differs from the English common law both in content and terminology, and especially in the principles of its application by the courts. Scottish law is more similar to the law of the continental European states, but it is also a system in its own right. Another feature of the Scottish common law is worth noting. It includes not only judicial precedents but also some treatises by extremely reputable Scottish lawyers.

Kazakhstan is the first country in the Eurasian Economic Union to introduce case law because it recognizes the need of international global companies to secure their investments. Around the world, a huge number of contracts are based on English common law, as it has traditionally been more trusted by investors, if only due to the fact that it is well known in the financial world. In addition, English law is business-oriented because it provides more freedom of contract, which allows parties to use advanced financial instruments in their relationships.

Where case law is used, the decisions made by the enforcer are predictable for most investors and allow for a comprehensive approach to assessing commercial and other risks. At the same time, English law is responsive to changes in the commercial component of the relationship between counterparties.

Statistics speak in favor of English law. More than 75% of commercial disputes heard in London’s courts and commercial arbitrations involve parties who are not resident in England or Wales. As far as the Commercial Court of London is concerned, in the cases considered, the proportion of applicants who are UK citizens ranges from 28 to 40%, with Kazakhstan and, until recently, Russia, and the USA traditionally competing for second to third places.

In Kazakhstan, following the strategy of economic modernization, for the purposes of global integration and development of the country’s investment attractiveness, amendments have been made to the Constitution providing for the establishment of a special legal regime in the financial sphere within the city of Astana, in accordance with the Constitutional Law.

According to the Constitutional Law of the Republic of Kazakhstan, “On the International Financial Center Astana,” the current law of the International Financial Center Astana (hereinafter – IFCA) is based on the Constitution and consists, among other things, of the acts of the IFCA, which in turn are based on the principles, norms, and precedents of the law of England and Wales and the standards of the world’s leading financial centers.

Kazakhstan has approached the implementation of the common law surgically, only within a special territory, without destroying the existing traditional system of law.

Particular attention should be paid to the fact that in the case of IFCA, the current law of Kazakhstan is not in contradiction to the norms of case law, but complements it in clauses not regulated by it. This “duo” actually shows how case law rules can be effectively applied and what is their advantage over the current law. The use of different sources of law allows for a sufficient level of legal penetration of case law while minimizing the conflict of legal systems.

The example of Israel demonstrates how four legal systems converge and shows that even seemingly incompatible elements in such a complex system can work successfully. Israel’s legal system is a mixed legal system, combining Romano-Germanic (continental) and Anglo-Saxon law. In addition, the country has two systems of religious law, Jewish and Muslim, applicable to members of the respective confessions.

It should be noted that all of the above became possible only thanks to the experienced lawmakers of each country, who worked in alliance with the strongest experts from other legal systems. The creation of mixed legal systems or the implementation of the rules of another law, as well as the perception of the resulting legislative norms, requires, as already mentioned, a sensitive approach.

In order to ensure the adoption of best global practices and the implementation of legal norms of England and Wales, a Legal Advisory Board to the IFCA (hereinafter referred to as the LAB) was established at the beginning of 2017. The LAB comprises representatives of the world’s leading law firms and legal associations. Members of the LAB carry out the formation of the regulatory legal framework so that it is clear, consistent, and covers all strategic directions of IFCA development.

The attempt to implement the principles of English law into Kazakhstan’s legal system is dictated by the desire to improve the country’s competitiveness and the need to follow international standards. The vivid example of Singapore shows how a country with a complex mixed legal system is one of the engines of the financial world. The legal system is based almost entirely on English common law, with Chinese, Muslim, and Hindu customary law applying to the Chinese, Muslim, and Hindu communities, respectively, in a number of personal status matters.

Improvement of the national justice system through the creation of IFCA, introduction and use of the source of law, which has earned its authority in the world and is used in the leading world powers and financial centers, are the first and, as preliminary results show, effective steps in the convergence of case law and continental European law in Kazakhstan.

The axiological aspect of the convergence of these two legal systems, in our opinion, is to ensure that when borrowing elements of English law into the domestic legal system, certain significant legal values are not lost or infringed.

First and foremost is state sovereignty. It appears that when introducing some acceptable elements of other law into domestic law, this will not happen if the basic principles of law are preserved. Thus, the borrowing by the criminal procedural legislation of certain countries of such institutions as “plea bargain,” fragmentary use of judicial precedent as a source of law, etc. did not affect the sovereignty of these countries.

More interesting in this respect are cases where a special legal regime is established in the local territory of a country. We believe that much depends on which branches of law implement foreign norms. In the Constitution of Kazakhstan, this process is limited, we repeat, exclusively to the financial sphere. That is, public legal relations are governed by Kazakhstani legislation, and the rights of citizens, including labor rights, are also protected by domestic legislation.