Key Points
On 15 May 2026, the Court of First Instance of the Astana International Financial Centre (AIFC)1 recognised and ordered enforcement in Kazakhstan of an ICC arbitral award ordering Gazprom to pay Naftogaz approximately USD 1.4 billion2. For Naftogaz, this was a notable success: Kazakhstan is one of the jurisdictions where Gazprom hasmaterial economic interests.
Yet the central question in this case is not whether the ICC award itself is capable of being enforced in Kazakhstan. As a general rule, that possibility exists under the New York Convention and Kazakhstan’s procedural legislation. What is contested is something else: whether it is the AIFC Court, rather than the courts of general jurisdiction inKazakhstan, that may grant leave to enforce a foreign arbitral award where the arbitration had no connection with either the AIFC or Kazakhstan.
Twelve days after the judgment in the Naftogaz case, another judge of the same AIFC Court of First Instance reached the opposite conclusion in the Posco case. In his view, the AIFC Court has no such jurisdiction, and the earlier case law, including the judgment in the Naftogaz case, was wrongly decided.
Background: The ICC Award and the AIFC Court’s Judgment in the Naftogaz Case
The dispute between Naftogaz and Gazprom arose out of the 2019 Agreement on the Organisation of Transportation of natural gas, under which Naftogaz ensured the transit of Russian gas through the territory of Ukraine. After the full-scale invasion, transit through the Sokhranivka entry point became impossible – it came under the control of Russian occupying forces. Naftogaz continued transporting gas through Sudzha, but Gazprom refused to pay for transportation, citing the change of route.
In September 2022, Naftogaz commenced arbitration against Gazprom under the ICC Rules; the seat of arbitration was Switzerland. On 16 June 2025, the tribunal rendered its final award (the “Arbitration Award”), holding Gazprom liable for breach of contract and ordering it to pay a principal amount of approximately USD 1.13 billion, plus interest and arbitration costs. In total, this amounts to approximately USD 1.4 billion.
On 9 January 2026, Naftogaz filed an application with the AIFC Court for recognition and enforcement of the Arbitration Award. On 15 May 2026, the AIFC Court of First Instance, per Justice Andrew Spink KC, granted Naftogaz’s application. The Court recognised the Arbitration Award as enforceable and issued an order requiring Gazprom to pay Naftogaz the amounts awarded by the arbitral tribunal (the “Naftogaz Judgment”).
The application was heard ex parte – without Gazprom’s participation and without prior notice to it. This procedure is standard for the initial stage of recognition of arbitral awards in the AIFC Court. At the same time, Gazprom has the right, within 14 days of receipt of the Judgment, to apply to have it set aside. In that case, the matter would be considered with both parties participating. Until that period expires or, if such an application is filed, until it is finally determined, the Naftogaz Judgment is not subject to enforcement.
On 25 May 2026, Kazakhstan’s Minister of Justice Yerlan Sarsembayev publicly stated that the AIFC Judgment in the Naftogaz case would not be enforced in the territory of Kazakhstan. He pointed out that the Judgment had been rendered without Gazprom’s participation and had not yet become final.
Separately, the Minister emphasised the absence of any jurisdictional connection between the dispute and the AIFC. Gazprom is not an AIFC Participant; the agreement was not concluded in the AIFC; the dispute is not governed by AIFC law; and the parties did not agree to transfer the dispute or the enforcement issue to the AIFC Court. On that basis, the Ministry of Justice takes the position that the AIFC Court had no jurisdiction to consider Naftogaz’s application, and that the application for recognition and enforcement of the Arbitration Award should have been filed with a court of general jurisdiction under Article 503 of the Civil Procedure Code of the Republic of Kazakhstan3.
Recognition and Enforcement of Foreign Arbitral Awards in Kazakhstan: A Jurisdictional Conflict
As a general rule, applications for recognition and enforcement of a foreign arbitral award in the territory of the Republic of Kazakhstan (RK) are considered by specialised inter-district economic courts under Articles 501 and 503 of the RK Civil Procedure Code. The application must be filed within three years at the place where the dispute was heard, at the debtor’s place of residence or the location of the legal entity’s governing body or, where these are unknown, at the location of the debtor’s property.
Alongside the general court system, Kazakhstan also has the AIFC Court. It operates within a special legal regime established by Constitutional Statute of the Republic of Kazakhstan No. 438-V ZRK of 7 December 2015 “On the Astana International Financial Centre” (the “AIFC Constitutional Statute”)4. A distinctive feature of the AIFC is its own dispute resolution system, separate from Kazakhstan’s judicial system and based on the principles of English common law. It comprises the AIFC Court, consisting of the Court of First Instance and the Court of Appeal, as well as the International Arbitration Centre as a separate arbitral institution. The AIFC Court is not part of the judicial system of Kazakhstan, but its decisions are enforced in Kazakhstan in the same manner as decisions of the Kazakhstani courts5.
This may well explain Naftogaz’s choice of the AIFC Court as its forum. If the Naftogaz Judgment becomes final, it may open the way to enforcement of the Arbitration Award in Kazakhstan bypassing the courts of general jurisdiction. Yet this entire construction rests on one premise: the AIFC Court must have had jurisdiction to consider Naftogaz’s application and to render the corresponding judgment.
The Limits of the AIFC Court’s Jurisdiction
Article 13(4) of the AIFC Constitutional Statute is of key importance in determining the AIFC Court’s jurisdiction. It provides for three categories of disputes falling within the exclusive jurisdiction of the AIFC Court: disputes between AIFC Participants, AIFC Bodies and their expatriate Employees; disputes relating to activities conducted in the AIFC and governed by the Acting Law of the AIFC; and disputes transferred to the AIFC Court by agreement of the parties.
On the basis of this provision alone, Naftogaz v Gazprom does not fall within the AIFC Court’s jurisdiction. Neither party is an AIFC Participant. The dispute arose out of a contract for gas transit through the territory of Ukraine, not out of activities conducted in the AIFC. The parties did not enter into any agreement transferring the dispute or the enforcement issue to the AIFC Court.
However, the AIFC Constitutional Statute contains one further provision, which became important in Todini6, Naftogaz and Posco7. This is Article 14(4), located in the article devoted to the AIFC International Arbitration Centre. Together with Article 45 of the AIFC Arbitration Regulations and Article 40 of the AIFC Court Regulations, that provision formed the basis of the argument accepted by Justice Spink in Naftogaz and later rejected by Justice Jackson in Posco.
How Justice Spink Grounded the AIFC Court’s Jurisdiction in the Naftogaz Case
In the Naftogaz case, Justice Spink began with Article 14(4) of the AIFC Constitutional Statute. The content of this provision differs across the language versions of the instrument. The English text published on the AIFC website speaks of the recognition and enforcement in the territory of the AIFC of awards of “arbitration courts in the Republic of Kazakhstan”8. Read literally, this text covers only arbitrations in Kazakhstan. An ICC award with its seat of arbitration in Switzerland does not fall within that wording.
The Russian version is worded more broadly: “Признание и исполнение решений арбитражей на территории Центра осуществляются в соответствии с законодательством Республики Казахстан” (“The recognition and enforcement of arbitral awards within the Centre’s jurisdiction are carried out in accordance with the laws of the Republic of Kazakhstan”)9. It contains no express reference to arbitrations seated specifically in Kazakhstan. Naftogaz argued that the English translation was erroneous and that the Russian text allowed a broader reading.
Justice Spink refrained from reaching a final conclusion on this linguistic discrepancy. He acknowledged that the difference between the texts might support Naftogaz’s position, but did not regard Article 14(4) as a sufficient self-standing basis for the AIFC Court’s jurisdiction. In his view, several considerations supported that approach. First, Article 14 as a whole is devoted to the AIFC International Arbitration Centre, and its preceding paragraphs deal exclusively with that Centre and the enforcement of its awards. Second, even on the broadest interpretation, Article 14(4) contains no express reference to arbitral awards rendered outside Kazakhstan.
Justice Spink therefore did not rely on Article 14(4) alone to substantiate jurisdiction. Instead, he relied on Article 45(1) of the AIFC Arbitration Regulations. It provides that an arbitral award, irrespective of the State or jurisdiction in which it was made, is to be recognised as binding within the AIFC and may be enforced upon written application to the AIFC Court. He read this provision together with Article 40 of the AIFC Court Regulations, which refers to the enforcement of “other” judgments and arbitration awards.
That reasoning was sufficient for Naftogaz to succeed at the ex parte stage. The key question, however, remained open: can AIFC Acts extend the Court’s jurisdiction beyond the limits expressly set by the AIFC Constitutional Statute? The answer came from Justice Jackson twelve days later – in the Posco judgment.
Twelve Days Later: Posco and the AIFC Court Changes Course
The case of Posco Co. Ltd. v Republican State Enterprise “National Centre for Complex Processing of Mineral Raw Materials of the Republic of Kazakhstan” (Case No. AIFC-C/CFI/2025/0066)10 concerned the enforcement of an ICC arbitral award rendered in Zurich. The debtor was a state-owned industrial enterprise of Kazakhstan. The claimant had first applied to the Almaty Specialised Inter-District Economic Court, but its application was twice returned for procedural defects. Posco then turned to the AIFC Court.
The AIFC Court faced the same question as in the Naftogaz case: does the AIFC Court have jurisdiction to recognise and grant enforcement of foreign arbitral awards rendered by a tribunal outside Kazakhstan and outside the AIFC?
Justice Jackson began with the threshold question in the case: does Posco’s application fall within Article 13(4) of the AIFC Constitutional Statute? The answer was no. The defendant was not an AIFC Participant; the ICC arbitration in Zurich did not relate to activities conducted in the AIFC; and there was no agreement between the parties transferring the dispute or the enforcement issue to the AIFC Court. At that level, there was no jurisdiction.
The Court then turned to Article 14(4). It agreed that the English translation of this provision published on the AIFC website is inaccurate. The official texts are the Kazakh and Russian ones. The Russian version, unlike the English translation, does not confine the provision’s scope to arbitrations located in the territory of Kazakhstan. Justice Jackson accepted as correct the translation under which Article 14(4) provides that “Recognition and enforcement of arbitral awards in the territory of the Centre shall be carried out in accordance with the legislation of the Republic of Kazakhstan”.
That, however, did not mean that the AIFC Court had jurisdiction. In Justice Jackson’s view, Article 14 governs the operation of the AIFC International Arbitration Centre as a whole, and its paragraph 4 cannot be construed as a provision which, without express words, confers on the AIFC Court jurisdiction to enforce any and all foreign arbitral awards.
Another argument proved decisive: the AIFC Court’s jurisdiction is determined by the AIFC Constitutional Statute. The AIFC Arbitration Regulations and the AIFC Court Regulations may regulate procedure, but they cannot create jurisdiction not provided for in Article 13. It is on this point that the Posco judgment directly departs from the logic of the Naftogaz Judgment.
Justice Jackson put this quite clearly. The AIFC Court is a “creature of statute”, not a court of inherent jurisdiction like the High Court in England and Wales. Its powers derive from, and are limited by, the AIFC Constitutional Statute. To the extent that the AIFC Arbitration Regulations and the AIFC Court Regulations purport to confer jurisdiction toenforce arbitral awards from other jurisdictions beyond the limits of the Statute, they are inconsistent with it.
Justice Jackson then assessed the AIFC Court’s earlier case law – Todini, Pacific Trade House and Naftogaz. In his view, in those cases the jurisdictional issue had either not been contested or not been fully argued. Having received full argument from the parties in Posco, the judge concluded that all of those cases had been decided in error: “I am driven to the conclusion that all those cases were wrongly decided”.
In support of his position, Justice Jackson also cited the earlier decision of Lord Mance CJ in Michael Wilson & Partners Ltd v CJSC Kazsubton (Case No: AIFC-C/CFI/2023/0002), where the Chief Justice of the AIFC Court stated that “the AIFC Court has a specifically delimited jurisdiction which is exhaustive as regards the heads stated in Article 13”, and added his own formulation as to the nature of the AIFC Court: “The AIFC Court is a creature of statute, not a court of inherent jurisdiction like the High Court in England and Wales. Its powers are defined in and limited by the Constitutional Statute”.
As a result, the AIFC Court dismissed Posco’s application and indicated that the applicant should apply to the courts of general jurisdiction of Kazakhstan in accordance with the procedural legislation of the Republic of Kazakhstan.
Possible Implications for the Appeal in the Naftogaz Case
Posco is the first AIFC Court decision on the enforcement of a foreign arbitral award rendered after full adversarial argument on the jurisdictional issue. In the Naftogaz case, Justice Spink considered the question ex parte – solely on the basis of the applicant’s submissions. In Posco, the defendant contested jurisdiction, and the Court had before it the parties’ detailed arguments on Articles 13 and 14 of the AIFC Constitutional Statute, the AIFC Arbitration Regulations and the AIFC Court Regulations.
It is telling that only twelve days passed between the judgments in the Naftogaz and Posco cases. Within that short span, two judges of the AIFC Court of First Instance gave opposite answers to the same question. In Posco, the earlier approach was not merely left unsupported. Justice Jackson stated in terms that the decisions in Todini, Pacific Trade House and Naftogaz had been wrongly decided.
This may have practical significance for the Naftogaz case. Justice Jackson rejected the very legal grounds on which Justice Spink built his Naftogaz Judgment: reliance on Article 14(4) as a provision conferring broad jurisdiction on the Court, and the use of Article 45 of the AIFC Arbitration Regulations and Article 40 of the AIFC Court Regulations to extend the Court’s powers beyond the limits set by Article 13 of the AIFC Constitutional Statute.
After Posco, the legal foundations of the Naftogaz Judgment look considerably more vulnerable. If the AIFC Court follows Justice Jackson’s approach, the Judgment is unlikely to be upheld. Otherwise, the appellate court will have to explain directly why Article 45 of the Arbitration Regulations and Article 40 of the Court Regulations can prevail over the restrictive interpretation of Article 13 of the AIFC Constitutional Statute. The Naftogaz Judgment contains no such answer.
At the same time, Posco does not mean that the ICC award in Naftogaz’s favour cannot be enforced in Kazakhstan. It casts doubt on only one of the available procedural routes – through the AIFC Court. Kazakhstan therefore remains available as an enforcement jurisdiction, but through a different procedural route: recourse to the courts of general jurisdiction under Article 503 of the RK Civil Procedure Code and the New York Convention remains available.
Authors: Oleg Alyoshin, Yulia Adamovych, Ivan Yavnych
Sources:
1. The Astana International Financial Centre is a special financial zone in Astana (Kazakhstan), established in 2018 as a regional hub for attracting investment and finance. The AIFC was created, among other things, in response to the 2014–2016 oil crisis, when the oil price fell from over USD 100 to below USD 30 per barrel, causing Kazakhstan’s oil revenues to fall by more than 70%. In response, the Government of Kazakhstan launched a series of economic and political reforms under a programme called the “100 Concrete Steps”. It was within this programme that the AIFC was established as an economic hub for attracting foreign investment.
2. Naftogaz of Ukraine JSC v Gazprom PJSC, AIFC Court of First Instance, Case No. AIFC-C/CFI/2026/0002, Judgment and Order of 15 May 2026 (Justice Andrew Spink KC)
3. «Минюст: Решение суда МФЦА по делу „Газпрома” и „Нафтогаза” не будет исполнено на территории Казахстана» (Tengrinews.kz, 25 May 2026)
4. Constitutional Statute of the Republic of Kazakhstan No. 438-V ZRK of 7 December 2015 “On the Astana International Financial Centre” is the foundational legal act that establishes the special legal regime of the AIFC, defines its jurisdiction, its system of governing bodies, the status of the AIFC Court and the International Arbitration Centre, and the relationship between AIFC law and the general legislation of Kazakhstan. Under Article 1 of the Statute, the AIFC is the territory within the City of Astana with precise borders determined by the President of the Republic of Kazakhstan where the special legal regime in the financial sphere applies.
5. Constitutional Statute of the Republic of Kazakhstan No. 438-V “On the Astana International Financial Centre” of 7 December 2015.
6. Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali SpA, AIFC Court Case No 25 of 2025, Judgment of 30 October 2025 (Montagu-Smith J)
7. Posco Co. Ltd. v Republican State Enterprise on the Right of Economic Management “National Centre for Complex Processing of Mineral Raw Materials of the Republic of Kazakhstan”, AIFC Court of First Instance, Case No. AIFC-C/CFI/2025/0066, Judgment of 27 May 2026 (Justice Sir Rupert Jackson)
8. Constitutional Statute of the Republic of Kazakhstan No 438-V “On the Astana International Financial Centre” (English version), Article 14(4): «Awards of arbitration courts in the Republic of Kazakhstan are to be recognised and enforced in the territory of the AIFC in accordance with legislation of the Republic of Kazakhstan»
9. Constitutional Statute of the Republic of Kazakhstan No 438-V “On the Astana International Financial Centre” (Russian version): «Признание и исполнение решений арбитражей на территории Центра осуществляются в соответствии с законодательством Республики Казахстан»
10. Posco Co. Ltd. v Republican State Enterprise on the Right of Economic Management “National Centre for Complex Processing of Mineral Raw Materials of the Republic of Kazakhstan”, AIFC Court of First Instance, Case No. AIFC-C/CFI/2025/0066, Judgment of 27 May 2026 (Justice Sir Rupert Jackson)