- Power of Attorney - Importance of Correct Wording
- March 7, 2014
- Law Firm: Dentons Canada LLP - Toronto Office
Careful drafting of power of attorneys is of utmost importance, especially for heads of branches and representative offices of foreign companies in Kazakhstan.
According to Kazakhstan law, certain powers related to the representation of companies in Kazakhstan courts must be explicitly stated in a power of attorney. Such powers include the power to sign a statement of claim, conclude an agreement on mediation or submission of the case to arbitration or court of referees, waive a claim and acknowledge a claim in full or in part, change the substance and grounds of a claim, enter into a settlement agreement, transfer powers to other persons, appeal against court decisions, claim enforcement of court decisions and receive awarded property or funds.
Based on our court experience we also recommend including certain additional powers into a power of attorney in order to ensure it covers all necessary authorities for representing a company’s interests in Kazakhstan courts. Depending on the nature of the company’s activities and scope of the powers of its representatives, other powers may need to be added to the power of attorney.
In our experience, heads of branches and representative offices of foreign companies in Kazakhstan often do not have the above-mentioned powers expressly stated in their powers of attorney. Therefore, in cases where a company intends to submit a claim to Kazakhstan courts or is summoned to the court as a defendant or a third party, the absence of such powers in the power of attorney may lead to unnecessary delays and may worsen the company’s position in the court, e.g. if a relevant limitation period has been missed and the courts refuse to accept a claim or to allow the company representative to participate in a court case.
This may hinder the actions of the company, especially in situations where there is a limited amount of time remaining to file an appeal or make a court appearance. The problem may be dealt with in advance by inserting the necessary powers into a power of attorney issued to the head of a branch or representative office and allowing for the transfer of these rights to other company representatives or its consultants when necessary.