Astana— Global law firm Dentons acted as an independent legal expert and mediator in a dispute related to the construction of a major gas processing plant (Kashagan). Our mandate was with respect to a complex dispute under an engineering, procurement and construction (EPC) contract with claims totaling approximately US$47 million. Dentons prepared an expert opinion on multiple issues under the EPC contract and an in-depth analysis of the contractual documentation as well as correspondence between the parties. Based on this expert opinion, the parties were able to avoid litigation and resolve the dispute on their own.

The lack of correspondence, on both sides, was a major challenge related to this dispute. Such documentation—specifically formal notices from the contractor’s side informing the employer of various events affecting the project schedule—serves as a record of key events in the project. Indeed, this is one of the realities of prevailing construction practices in Kazakhstan, where contractors choose not to send formal notices, presumably because this might compromise their relationship with the client.

Contractors may not realize the extent of the legal risk to which they are exposed by following this practice. In the expert opinion, Dentons considered whether the lack of such notices should always be assessed against the contractor and, importantly, whether the employer can deliberately rely on the contractor’s breach of the notice requirement even though the employer may itself be liable for certain events.

Partner Birzhan Zharasbayev led Dentons’ Real Estate team in this complex mandate, with support from senior associate Bogdan Piskorskiy and paralegal Sanat Kazhgaliyev.

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