© Ozara Insights 02 June 2020
Will Aston, Managing Partner of Ozara Services, in conversation with AIFC Academy of Law on how the current Covid-19 crisis affects the abilities of business to be resilient and mainatain business continuity.
From a business perspective, the COVID 19 crisis is a major business disruption. Not just here within Kazakhstan, but across the globe. It is a big challenge.
There are two areas I want to highlight in how businesses are responding to the challenge:
Resilience – the ability of a business to withstand and recover rapidly from disruptions.
Business continuity – ensuring a business can continue to provide services that are critical for your business and your customers.
Thinking about the first area, resilience, let me give you a real example in the AIFC: The AIFC Court and the International Arbitration Centre.
Resilience is actually about your business strategy and business model, and less about technology solutions. The Court and the Arbitration Centre have a clear business strategy: deliver justice in a way that is accessible, transparent and efficient.
How does this work in practice? - Say there are two companies who have a commercial dispute one in Kazakhstan, one in Germany, and they have agreed to try to resolve it by arbitration.
○ For their arbitration proceeding they don’t need to be physically present in the IAC. Nor indeed do the arbitrators. They could for example be in Singapore and London.
○ The arbitration can proceed with the parties located in multiple places around the world. Even during a business disruption, such as COVID 19.
I also want to touch on efficiency, another key part of their strategy and model.
○ Some businesses find arbitration a very attractive way to resolve disputes.
○ In arbitration for example the proceeding is kept confidential.
○ But if your seeking arbitration from one of the centres in Europe, they are backed up, so you may have to wait 12, 18 months before you can even start the proceeding. From a business perspective not efficient.
○ The International Arbitration Centre in the AIFC doesn’t have that backlog.
○ It also allows parties to opt in. You don’t need to be an AIFC business. So if your business is not based and you agree in your contracts that arbitration will be in the AIFC you are all good.
○ If there is a dispute, you can get it resolved quickly using the Arbitration Centre. Lengthy disputes are not good for businesses. Having access to efficient and speedy dispute resolution can add to the robustness and resilience of businesses, whether they are based in the AIFC or elsewhere in Kazakhstan.
Coming back to number two, business continuity - ensuring a business can continue to provide services that are critical your business and your customers business.
This differs from resilience which is about the whole business.
With business continuity, the focus is on the specific services that are critical.
Let’s take the example of the Astana International Exchange (the AIX).
The service AIX provides to brokers so they can trade on the exchange is an example of a critical business service. Something like annual strategy planning is not critical.
So business continuity involves identifying and prioritising services which are critical.
The critically important services will vary business to business.
○ For an exchange like AIX it may be trading;
○ For Banks it may be payments and enabling people access to their money.
The time that it is tolerable to have downtime where their critical services are not available also varies.
○ The AIX has continued to do business during the COVID 19. Its maximum tolerable downtime may be less than a day.
○ For a law firm it may be tolerable to resume business after number of days. A longer period of time.
So in summary, our perspective: COVID 19 is a major disruption, in Kazakhstan and globally, and businesses are responding in leveraging the areas of resilience and seeking to continue to provide services that are critical for their business and their customers. It is a big challenge.