Using the Law to Advance Oppression: How Kazakhstan Presents a Veneer of Due Process to Silence Opposition

February 10, 2022 Lawfare

The Kazakh regime is extremely proficient when it comes to arbitration, which is highly susceptible to the use of political pressure and subversion by the press—awards and proceedings are not always public, and the evidence presented is often difficult to challenge. In a notable case, now known as “Tristangate,” Kazakhstan has refused to pay a fully adjudicated $500 million arbitral award to two Moldovan investors as compensation for the forced nationalization of their companies in 2010.

In the Tristangate case, Stati et. al. v. Kazakhstan, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ordered the enforcement of the arbitral award in May 2021. Berman said in a ruling on the Kazakh regime’s failure to disclose information:

Don’t get me wrong, the Republic of Kazakhstan had every right to litigate the petition to confirm the arbitral award, and they had every right to appeal my decision. But those proceedings are over. These are post-judgment proceedings. And the Republic of Kazakhstan and its counsel needs to get that into their heads because the level of intransigence that we’ve seen to date is not acceptable and it officially ends today.

In spite of those warnings, the Kazakh government has decided to go after anyone associated with the case and has launched satellite proceedings against the bondholders, the investment firm Argentem Creek Partners, which continues to have an interest in the payment of the award. In Kazakhstan v. Chapman, Argentem Creek and others, filed in New York, the Kazakh regime alleges that a “murky web” of companies were used to hide investments. They also have challenged the proceedings in a number of European jurisdictions but have lost every case so far. These collateral attacks on the award are combined with the use of experts and negative press to distract from the fact that there seems to be no evidence to support their contentions.

Further, in litigation, Kazakhstan regularly pays for academic opinions that support its narrative and use them to condition the media environment. The interesting issue with arbitration is that, because it is not always possible to see the evidence, it is difficult to tell how much money experts are getting paid over a period of time for different cases. The payment is important because the huge sums paid to experts are essentially contingent on them agreeing with one party. Some academics and politicians therefore make a substantial living from presenting repressive regimes such as Kazakhstan through rose-tinted spectacles. By way of example, in October the press reported that Jonathan Aitkin was paid £166,000 for a flattering biography of former Kazakh President Nursultan Nazarbayev. The same is, of course, true for many lawyers and journalists.

Returning to Tristangate, the Kazakh government is using an opinion written by George Bermann, a professor from Columbia Law School, to support its case. Of course, the opinion is no more than that: It contains no sworn oath, but it is used as if it is the truth. It has even been posted on the Kazakhstan government website and has been used as one of the key pieces of evidence that the government is presenting to try and stop payment of the award. It will almost certainly, however, never be tested in court and the narrative that it creates is difficult to challenge in the media. It is no wonder that if the Kazakh regime can pay people to agree with them, they will do whatever it takes to prevent criticism.