Recognition of Foreign Arbitral Awards in the AIFC Court – Naftogaz v. Gazprom

• On 15 May 2026, the AIFC Court ordered enforcement of a USD 1.43 billion ICC arbitral award against Gazprom. Justice Andrew Spink KC authorised enforcement on a preliminary basis, staying the order for 14 days to allow Gazprom to apply to set it aside.
• The central issue was whether the AIFC Court can enforce an award made outside Kazakhstan. A translation discrepancy in Article 14(4) of the AIFC Constitutional Statute left this genuinely unclear. The Court declined to resolve it definitively in a without-notice proceeding.
• Rather than rely on the disputed statute, Justice Spink found authority in the AIFC Court Regulations and AIFC Arbitration Regulations. Article 45(1) of the Arbitration Regulations states that an arbitral award is binding in the AIFC regardless of where it was made.
• Twelve days later, Justice Sir Rupert Jackson dismissed a comparable enforcement claim in Posco v National Centre for Complex Processing of Mineral Raw Materials, declaring Naftogaz v. Gazprom "wrongly decided." The two judgments cannot both stand. Appellate resolution or legislative amendment is now required.
• Gazprom is expected to challenge the enforcement order, with arguments available under the Kyiv Convention, the New York Convention, and the statutory translation dispute. The outcome will determine the extent of the AIFC Court's jurisdiction over foreign awards with no direct AIFC connection.

Introduction

The judgment of Justice Andrew Spink KC in National Joint Stock Company “Naftogaz of Ukraine” JSC v. Gazprom PJSC is a significant contribution to the emerging jurisprudence of the Astana International Financial Centre (AIFC) Court on the recognition and enforcement of foreign arbitral awards. The arbitration claim was filed by Naftogaz against Gazprom under the rules of the International Chamber of Commerce (ICC), with a seat in Zurich, Switzerland. It stems from Gazprom’s failure to pay in full for natural gas transported by Naftogaz through Ukraine under a 2019 “take-or-pay” transit agreement.

Delivered on 15 May 2026, the AIFC Court’s order authorises enforcement of a substantial ICC Award rendered in Switzerland, ordering Gazprom to pay Naftogaz more than USD 1.43 billion plus interest and costs.

Beyond its immediate commercial consequences, the judgment clarifies the AIFC Court’s jurisdictional foundations and its relationship to the AIFC Constitutional Statute, the AIFC Court Regulations, and the AIFC Arbitration Regulations.

Procedural Context and Relief Granted

The Court recognised and ordered enforcement of the ICC arbitration award dated 16 June 2025, confirming that the tribunal had authority to make it. Gazprom must pay Naftogaz the full amounts awarded in the arbitration: the principal sum, accrued interest, ongoing daily interest, arbitration costs, and interest on those costs. Naftogaz was also awarded its costs for the AIFC proceedings.

The Court confirmed the award is valid and enforceable, but stayed enforcement for 14 days to allow Gazprom to apply to set the order aside.

Why the Judgment is Preliminary

The application was made without notice, so the Court emphasised that its reasons are provisional. Justice Spink noted: “it will remain open to the Defendant to seek to have this Order set aside within 14 days.” This procedural framing preserves adversarial balance while allowing the AIFC Court to act quickly in support of arbitral awards, consistent with international best practice.

The Translation Dispute

The core legal question was whether the AIFC Court has jurisdiction to recognise and enforce a foreign-seated arbitral award rendered in Switzerland. The difficulty arose from a discrepancy in the translation of Article 14(4) of the AIFC Constitutional Statute.

The AIFC website’s translation suggests only awards issued by “arbitration courts in the Republic of Kazakhstan” may be enforced in the AIFC. Naftogaz argued that the official text, properly translated, contains no such territorial limitation. Justice Spink declined to resolve the translation dispute, noting “there is a need for caution at this stage over reaching a conclusion as to the interpretation of the scope of Article 14(4).” Translation discrepancies in foundational statutes carry systemic implications, and the Court rightly avoided a definitive ruling in a without-notice proceeding.

Structural Reading of the Constitutional Statute

The Court read Articles 13 and 14 of the Constitutional Statute together. Article 13 deals with the AIFC Court; Article 14 deals primarily with the AIFC International Arbitration Centre (IAC). The judge observed that the narrow scope of Articles 14(1)–13 makes it “not obvious” that Article 14(4) was intended to govern all foreign arbitral awards. This contextual approach focuses on the broader structure of the legislation, rather than individual provisions read in isolation.

The Role of AIFC Regulations and the Kazakh Government’s Position

The Court set aside the disputed element of the Constitutional Statute and relied instead on the AIFC Court Regulations and the AIFC Arbitration Regulations, which provide a clearer legal basis for enforcing arbitral awards.

Justice Spink pointed to Article 40(3), which allows the Court to enforce “other… arbitration awards.” He read this as covering awards made outside Kazakhstan. Read with Article 40(2), the Rules distinguish between awards made in the AIFC and all other awards, confirming the Court’s broad power to enforce foreign awards. Article 45(1) goes further still: it states that an arbitral award is binding in the AIFC regardless of where it was made. This places local and foreign awards on the same footing and mirrors the pro-enforcement approach of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. Justice Spink concluded that Article 45 alone gives the Court authority to recognise and enforce the award.

The Court confirmed that Naftogaz had followed every required procedural step. The judgment shows the AIFC Court can handle enforcement applications quickly without sacrificing procedural rigour.

The Kazakh Government’s Response

Kazakhstan’s Minister of Justice, Mr Erlan Sarsembayev, publicly disputed the Court’s approach, arguing that the case lacked any jurisdictional link to the AIFC: Gazprom is not registered with the AIFC, the disputed transaction did not take place on AIFC territory, and AIFC law does not govern the dispute. He also confirmed that the Kazakh Government is working to amend the relevant legislation to remove any further ambiguity.

The Recent Posco Judgment: A Direct Conflict

While this article was in preparation, the AIFC Court delivered a judgment directly relevant to it on 27 May 2026. In Posco Co. Ltd. v Republican State Enterprise on the Right of Economic Management “National Centre for Complex Processing of Mineral Raw Materials” (AIFC-C/CFI/2025/0066), the South Korean company Posco sought to enforce an ICC award of USD 25 million plus interest and costs against a Kazakh state-owned entity.

Justice Sir Rupert Jackson dismissed the claim, finding that the AIFC Court has no jurisdiction. He stated that “the regular courts of Kazakhstan have jurisdiction to enforce foreign arbitral awards and do not need an assistance of the AIFC Court in that regard.” He went further, characterising Naftogaz v. Gazprom as “wrongly decided.”

Justice Jackson held that the dispute had no connection to activities conducted in the AIFC and there was no agreement between the parties conferring jurisdiction on the AIFC Court. On the statutory question, he concluded that Article 14(4) of the AIFC Constitutional Statute applies only to awards of the Astana International Arbitration Centre (IAC), over which the AIFC Court exercises supervisory jurisdiction. He also held that the AIFC Arbitration Regulations are subordinate legislation made by the AIFC Management Council and are therefore inconsistent with the AIFC Constitutional Statute.

The Resulting Conflict Between Judgments

The two judgments directly contradict each other. Naftogaz v. Gazprom treats the AIFC Arbitration Regulations as the operative basis for jurisdiction and endorses a broad pro-enforcement reading. Posco treats those same regulations as subordinate legislation that cannot override the Constitutional Statute, and reads the statute narrowly to exclude foreign awards. The conflict is unlikely to resolve itself without either an appellate ruling or legislative amendment.

Where the AIFC Stands Now

The Naftogaz v. Gazprom judgment placed the AIFC Court at the centre of a USD 1.43 billion enforcement dispute with significant geopolitical dimensions. Justice Spink himself expects the enforcement order to be challenged: Gazprom may rely on the Russian courts’ existing anti-suit injunction under the Kyiv Convention (to which both Russia and Kazakhstan are parties), the grounds for refusal under the New York Convention, and the disputed translation of Article 14(4) of the AIFC Constitutional Statute.

The Posco judgment has further complicated the picture. Whether the AIFC Court can hear foreign enforcement applications at all is now an open question, pending appellate resolution or legislative intervention. The answer will determine how the AIFC positions itself within the wider Eurasian dispute-resolution environment, and whether it can credibly compete as a venue for international commercial parties with no existing AIFC connection.

Frequently Asked Questions

What is the AIFC Court?

The Astana International Financial Centre Court is an independent common law court operating in Kazakhstan. It applies its own regulations and English-language procedure, modelled on the courts of England and Wales. It is separate from the Kazakh national court system.

Why was the award enforced in Kazakhstan rather than Switzerland?

The ICC arbitration seated in Zurich produced the award, but enforcement depends on where Gazprom holds assets. Kazakhstan was chosen because Gazprom has interests there. The AIFC Court was selected as the enforcement forum rather than the Kazakh national courts.

What is the New York Convention, and does it apply here?

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 is the principal international treaty governing the enforcement of arbitral awards across borders. Both Kazakhstan and Switzerland are signatories. The AIFC Arbitration Regulations reflect the Convention’s pro-enforcement approach, which Justice Spink cited in support of his ruling.

What does the Posco judgment mean for parties considering AIFC enforcement?

Posco creates real uncertainty. Justice Jackson held that the AIFC Court lacks jurisdiction to enforce foreign awards where the dispute lacks an AIFC connection. Until an appellate court resolves the conflict with Naftogaz v. Gazprom, parties cannot rely on the AIFC as a straightforward enforcement route for unrelated international awards.

Will the Kazakh Government change the law?

The Minister of Justice has confirmed that the government is working to amend the relevant legislation. Any amendment will need to resolve whether Article 14(4) of the AIFC Constitutional Statute covers all foreign arbitral awards or only those of the Astana International Arbitration Centre. Until that change is enacted, the legal position remains contested.

Disclaimer: This article is for general information only and does not constitute legal advice. Readers with specific queries should seek independent legal advice.