Investment Protection & BIT in Kazakhstan

Kazakhstan's BIT network

Kazakhstan has signed bilateral investment treaties with many states, including China, Germany, France, the Netherlands, the UAE, the UK, and the USA. Not every signed treaty is in force, so the status of the specific treaty must be confirmed first. The UAE treaty, signed on 24 March 2018 and ratified by Kazakhstan on 28 December 2022, is recorded as in force since 14 April 2023. The 1994 treaty with Italy is recorded as terminated on 12 July 2011, its five-year survival period has also run out, and the two governments were still negotiating a new agreement in January 2024. We have found no BIT with Cyprus: the Kazakhstan-Cyprus convention of 15 May 2019 is a tax treaty. BITs in force generally confer substantive protections on qualifying investors — fair and equitable treatment, most-favoured-nation treatment, protection against expropriation without compensation, and free transfer of funds — and typically provide access to investor-state arbitration under ICSID, UNCITRAL, or ICC rules. The wording varies: the UAE treaty, for example, has no express fair and equitable treatment clause. Bond Stone advises on which BIT applies to a specific investment and the scope of protections available.

Structuring for BIT protection

The nationality of the investor determines which BIT applies — and BIT protection can be maximised by structuring the investment through an entity incorporated in a state with a favourable BIT with Kazakhstan. Bond Stone advises on investment structuring to access the most favourable treaty regime — including the use of holding entities in a jurisdiction with a BIT in force with Kazakhstan where the investor's home state BIT provides more limited protection. The vehicle must meet the treaty's own tests and be in place before a dispute arises. The Netherlands treaty, in force since 1 August 2007, covers legal persons constituted under Dutch law and offers ICSID arbitration. The UAE treaty is narrower for a holding company: natural resources are outside its scope (Article 1(1)), its benefits may be denied to an investor who invests through intermediaries (Article 16(2)), and ICSID is the only arbitration forum (Article 10). Cyprus offers no BIT route: a Cypriot company can look only to the Energy Charter Treaty, and only for energy investments. A tax treaty gives no investment protection, so a vehicle chosen for tax reasons needs a separate treaty check.

Domestic law protections — Entrepreneurial Code

Independently of BIT protections, the Entrepreneurial Code Chapter 25 provides: full and unconditional legal protection of investors; compensation on nationalisation and requisition; free use of income after payment of applicable taxes; and resolution of investment disputes by negotiation, in Kazakhstani courts or in agreed arbitration, with access to the Investment Ombudsman. These domestic protections apply to all foreign investors regardless of their nationality — but BIT protections are generally broader and give direct access to international arbitration without a separate agreement with the state.

Energy Charter Treaty

The Energy Charter Treaty (ECT), in force for Kazakhstan since 16 April 1998, gives investors in Kazakhstan's energy sector access to investor-state arbitration. The ECT has been invoked by investors in disputes with Kazakhstan arising from changes to tax and subsoil use regimes. In AES Corporation and Tau Power v Kazakhstan (ICSID ARB/10/16), for example, the tribunal found a breach of fair and equitable treatment under the ECT but awarded no damages (award of 1 November 2013). Bond Stone advises energy sector investors on the availability and scope of ECT protections for their specific investment.

Investor-state dispute resolution

Foreign investors in Kazakhstan may invoke investor-state arbitration under an applicable BIT where the host state has breached its treaty obligations — typically through: expropriation without compensation; breach of fair and equitable treatment; discriminatory measures; or failure to provide full protection and security. Tribunals have jurisdiction under ICSID, UNCITRAL, or ICC rules depending on the applicable treaty. Published cases show both sides of this. In AIG Capital Partners v Kazakhstan (ICSID ARB/01/6), under the US treaty, the tribunal found measures tantamount to expropriation of a real estate project and ordered compensation (award of 7 October 2003). In Caratube v Kazakhstan (ICSID ARB/08/12), also under the US treaty, the tribunal held that the claimant bore the burden of proving foreign control of the local company and dismissed the case for lack of jurisdiction (award of 5 June 2012, upheld on annulment). Alhambra Resources v Kazakhstan (ICSID ARB/16/12), a gold mining dispute under the Netherlands treaty, produced an award of 16 November 2020 and an annulment decision of 10 March 2023, and the resubmitted case was still pending in October 2026. Agip Caspian Sea and others v Kazakhstan (ICSID ARB/26/10), an oil and gas claim under the France and Netherlands treaties and the ECT, was registered on 27 February 2026 and is pending. Bond Stone advises on treaty breach assessment, arbitration strategy, and tribunal jurisdiction.