Naftogaz v Gazprom
Introduction
Recent decisions of the AIFC Court have once again brought a fundamental question to the forefront: may the AIFC Court recognise and enforce foreign arbitral awards where neither the award debtor nor the underlying dispute has any connection with the AIFC?
The starting point is the Constitutional Statute "On the Astana International Financial Centre". Article 13(4) of the Constitutional Statute defines the jurisdiction of the AIFC Court through three categories: disputes between AIFC participants, between AIFC participants and AIFC bodies, as well as disputes involving expatriate employees of an AIFC participant or an AIFC body; disputes relating to activities carried out within the AIFC and governed by the Acting Law of the AIFC; and disputes referred to the AIFC Court by agreement of the parties.
The starting point is the Constitutional Statute "On the Astana International Financial Centre". Article 13(4) of the Constitutional Statute defines the jurisdiction of the AIFC Court through three categories: disputes between AIFC participants, between AIFC participants and AIFC bodies, as well as disputes involving expatriate employees of an AIFC participant or an AIFC body; disputes relating to activities carried out within the AIFC and governed by the Acting Law of the AIFC; and disputes referred to the AIFC Court by agreement of the parties.
The debate has also centred on Article 14(4) of the Constitutional Statute. In the English-language version published on the AIFC website, this provision is formulated as a rule concerning the recognition and enforcement within the AIFC of awards rendered by arbitral tribunals of the Republic of Kazakhstan. However, in several cases, applicants argued that the correct translation was broader. In particular, it was submitted that the provision should be understood as referring to the recognition and enforcement of arbitral awards within the territory of the Centre in accordance with the legislation of the Republic of Kazakhstan.
The second group of arguments concerns not the Constitutional Statute itself, but the AIFC’s own acts. Rule 40(3) of the AIFC Court Regulations provides for the possibility of adopting rules or practice directions concerning the further enforcement of judgments and arbitral awards. In addition, Article 45(1) of the AIFC Arbitration Regulations provides that an arbitral award, irrespective of the State or jurisdiction in which it was made, shall be recognised as binding within the AIFC and may be enforced within the AIFC upon application to the AIFC Court.
This gives rise to the central legal conflict: may the jurisdiction of the AIFC Court be extended beyond the categories expressly specified in Article 13 of the Constitutional Statute on the basis of subordinate AIFC legislation?
The second group of arguments concerns not the Constitutional Statute itself, but the AIFC’s own acts. Rule 40(3) of the AIFC Court Regulations provides for the possibility of adopting rules or practice directions concerning the further enforcement of judgments and arbitral awards. In addition, Article 45(1) of the AIFC Arbitration Regulations provides that an arbitral award, irrespective of the State or jurisdiction in which it was made, shall be recognised as binding within the AIFC and may be enforced within the AIFC upon application to the AIFC Court.
This gives rise to the central legal conflict: may the jurisdiction of the AIFC Court be extended beyond the categories expressly specified in Article 13 of the Constitutional Statute on the basis of subordinate AIFC legislation?
Practice prior to Naftogaz v Gazprom
Before Naftogaz v Gazprom, the AIFC Court had already considered similar applications.
In Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali S.p.A., the AIFC Court recognised and granted permission to enforce an ICC award rendered in an arbitration seated in Paris. The debtor was the Italian company Todini Costruzioni Generali S.p.A., and the order does not disclose any apparent connection between the debtor and the AIFC. Nevertheless, the AIFC Court considered its jurisdiction to be "strongly arguable" on the basis of the submissions concerning the translation of Article 14(4) of the Constitutional Statute and issued an order for recognition and enforcement.
In Pacific Trade House Limited v Altai Polymetals LLP and Terekty Ken Bayytu LLP, the AIFC Court recognised and granted permission to enforce a SIAC award rendered in an arbitration seated in Singapore. In that case, the connection with Kazakhstan was clearer, as the debtors were Kazakhstani companies. However, the order likewise did not disclose any specific connection with the AIFC. At the preliminary stage, the AIFC Court once again accepted the argument based on the broader translation of Article 14(4) of the Constitutional Statute as sufficient.
It is important, however, that both orders were issued without notice to the respondents. The findings on jurisdiction were preliminary and could be reconsidered upon an application by the debtor.
Accordingly, by the time Naftogaz v Gazprom was decided, a cautious but discernible trend had begun to emerge. At the preliminary stage, the AIFC Court was prepared to recognise foreign arbitral awards even where the seat of arbitration was outside Kazakhstan and there was no apparent connection with the AIFC.
In Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali S.p.A., the AIFC Court recognised and granted permission to enforce an ICC award rendered in an arbitration seated in Paris. The debtor was the Italian company Todini Costruzioni Generali S.p.A., and the order does not disclose any apparent connection between the debtor and the AIFC. Nevertheless, the AIFC Court considered its jurisdiction to be "strongly arguable" on the basis of the submissions concerning the translation of Article 14(4) of the Constitutional Statute and issued an order for recognition and enforcement.
In Pacific Trade House Limited v Altai Polymetals LLP and Terekty Ken Bayytu LLP, the AIFC Court recognised and granted permission to enforce a SIAC award rendered in an arbitration seated in Singapore. In that case, the connection with Kazakhstan was clearer, as the debtors were Kazakhstani companies. However, the order likewise did not disclose any specific connection with the AIFC. At the preliminary stage, the AIFC Court once again accepted the argument based on the broader translation of Article 14(4) of the Constitutional Statute as sufficient.
It is important, however, that both orders were issued without notice to the respondents. The findings on jurisdiction were preliminary and could be reconsidered upon an application by the debtor.
Accordingly, by the time Naftogaz v Gazprom was decided, a cautious but discernible trend had begun to emerge. At the preliminary stage, the AIFC Court was prepared to recognise foreign arbitral awards even where the seat of arbitration was outside Kazakhstan and there was no apparent connection with the AIFC.
AIFC Court Practice Prior to Naftogaz v Gazprom
Before Naftogaz v Gazprom, the AIFC Court had already considered similar applications.
In Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali S.p.A., the AIFC Court recognised and granted permission to enforce an ICC award rendered in an arbitration seated in Paris. The debtor was the Italian company Todini Costruzioni Generali S.p.A., and the order does not disclose any apparent connection between the debtor and the AIFC. Nevertheless, the AIFC Court considered its jurisdiction to be "strongly arguable" on the basis of the submissions concerning the translation of Article 14(4) of the Constitutional Statute and issued an order for recognition and enforcement.
In Pacific Trade House Limited v Altai Polymetals LLP and Terekty Ken Bayytu LLP, the AIFC Court recognised and granted permission to enforce a SIAC award rendered in an arbitration seated in Singapore. In that case, the connection with Kazakhstan was clearer, as the debtors were Kazakhstani companies. However, the order likewise did not disclose any specific connection with the AIFC. At the preliminary stage, the AIFC Court once again accepted the argument based on the broader translation of Article 14(4) of the Constitutional Statute as sufficient.
It is important, however, that both orders were issued without notice to the respondents. The findings on jurisdiction were preliminary and could be reconsidered upon an application by the debtor.
Accordingly, by the time Naftogaz v Gazprom was decided, a cautious but discernible trend had begun to emerge. At the preliminary stage, the AIFC Court was prepared to recognise foreign arbitral awards even where the seat of arbitration was outside Kazakhstan and there was no apparent connection with the AIFC.
In Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali S.p.A., the AIFC Court recognised and granted permission to enforce an ICC award rendered in an arbitration seated in Paris. The debtor was the Italian company Todini Costruzioni Generali S.p.A., and the order does not disclose any apparent connection between the debtor and the AIFC. Nevertheless, the AIFC Court considered its jurisdiction to be "strongly arguable" on the basis of the submissions concerning the translation of Article 14(4) of the Constitutional Statute and issued an order for recognition and enforcement.
In Pacific Trade House Limited v Altai Polymetals LLP and Terekty Ken Bayytu LLP, the AIFC Court recognised and granted permission to enforce a SIAC award rendered in an arbitration seated in Singapore. In that case, the connection with Kazakhstan was clearer, as the debtors were Kazakhstani companies. However, the order likewise did not disclose any specific connection with the AIFC. At the preliminary stage, the AIFC Court once again accepted the argument based on the broader translation of Article 14(4) of the Constitutional Statute as sufficient.
It is important, however, that both orders were issued without notice to the respondents. The findings on jurisdiction were preliminary and could be reconsidered upon an application by the debtor.
Accordingly, by the time Naftogaz v Gazprom was decided, a cautious but discernible trend had begun to emerge. At the preliminary stage, the AIFC Court was prepared to recognise foreign arbitral awards even where the seat of arbitration was outside Kazakhstan and there was no apparent connection with the AIFC.
Naftogaz v Gazprom
In Naftogaz v Gazprom, the AIFC Court, at the preliminary stage, recognised and granted permission to enforce an ICC award dated 16 June 2025 against PJSC Gazprom. The arbitration was conducted under the ICC Rules and was seated in Switzerland.
The judge expressly acknowledged the potential jurisdictional issue. However, the AIFC Court did not finally determine the question of the correct translation of Article 14(4) of the Constitutional Statute. It merely observed that the translation proposed by the applicant could support the jurisdictional argument. Of greater importance to the AIFC Court were Rule 40(3) of the AIFC Court Regulations and Article 45(1) of the AIFC Arbitration Regulations. The AIFC Court considered that these provisions supported its power to recognise foreign arbitral awards.
A crucial point is that the decision in Naftogaz v Gazprom was made without notice to the respondent and therefore without its participation. The AIFC Court itself stated that its findings were preliminary and that Gazprom was entitled to apply to set aside the order within 14 days of service. The order was not enforceable until the expiry of that period or the determination of any application to set it aside.
The judge expressly acknowledged the potential jurisdictional issue. However, the AIFC Court did not finally determine the question of the correct translation of Article 14(4) of the Constitutional Statute. It merely observed that the translation proposed by the applicant could support the jurisdictional argument. Of greater importance to the AIFC Court were Rule 40(3) of the AIFC Court Regulations and Article 45(1) of the AIFC Arbitration Regulations. The AIFC Court considered that these provisions supported its power to recognise foreign arbitral awards.
A crucial point is that the decision in Naftogaz v Gazprom was made without notice to the respondent and therefore without its participation. The AIFC Court itself stated that its findings were preliminary and that Gazprom was entitled to apply to set aside the order within 14 days of service. The order was not enforceable until the expiry of that period or the determination of any application to set it aside.
The Position of the Ministry of Justice of the Republic of Kazakhstan
Following the decision in Naftogaz v Gazprom, the Minister of Justice of the Republic of Kazakhstan, Yerlan Sarsembayev, adopted a restrictive approach. According to his position, Kazakhstan should not serve as a transit forum for the enforcement of awards having no legal connection with the Republic. The Ministry of Justice stated that Gazprom was not an AIFC participant, that the transaction in dispute had not been concluded within the AIFC, that the dispute was not governed by AIFC law, and that the parties had not entered into an agreement referring questions of recognition and enforcement to the AIFC Court.
In other words, the Ministry’s position brings the issue back to Article 13 of the Constitutional Statute: the jurisdiction of the AIFC Court must arise from a connection with the AIFC, activities carried out within the AIFC, AIFC law, or an agreement between the parties.
In other words, the Ministry’s position brings the issue back to Article 13 of the Constitutional Statute: the jurisdiction of the AIFC Court must arise from a connection with the AIFC, activities carried out within the AIFC, AIFC law, or an agreement between the parties.
POSCO v National Centre
On 27 May 2026, the AIFC Court delivered its judgment in POSCO v National Centre for Complex Processing of Mineral Raw Materials. The applicant sought the recognition and enforcement of an ICC award rendered in an arbitration seated in Zurich, ordering the payment of USD 25 million and related amounts.
Justice Sir Rupert Jackson concluded that the AIFC Court lacked jurisdiction to hear the application. He noted that Article 14 of the Constitutional Statute is entitled "International Arbitration Centre" and must be interpreted in the context of the AIFC. The jurisdiction of the AIFC Court is determined by Article 13 of the Constitutional Statute. The AIFC Court Regulations and the AIFC Arbitration Regulations constitute subordinate legislation and cannot extend the jurisdiction of the AIFC Court beyond the limits established by the Constitutional Statute.
Of particular importance, the judge expressly referred to Roads Department, Pacific Trade House, and Naftogaz v Gazprom, observing that the jurisdictional issue had not been fully considered in those cases.
The POSCO decision and the position adopted by the Ministry of Justice clearly differ from the direction that had begun to emerge from the preliminary decisions in Roads Department, Pacific Trade House, and Naftogaz v Gazprom.
It is now possible to identify two competing approaches.
The first is an expansive approach: the AIFC Court may recognise foreign arbitral awards on the basis of the broader translation of Article 14(4) of the Constitutional Statute, Rule 40(3) of the AIFC Court Regulations, and Article 45 of the AIFC Arbitration Regulations.
The second is a restrictive approach: the AIFC Court is not a universal forum for the enforcement of foreign arbitral awards that have no connection with the AIFC, and its jurisdiction must remain within the limits established by Article 13 of the Constitutional Statute.
The decision in Naftogaz v Gazprom does not yet provide a final answer to this question, since it was made without the respondent’s participation and was expressly characterised as preliminary. The POSCO decision has not brought the debate to an end, but it has provided the most detailed judicial reasoning in support of the restrictive approach. The AIFC Court expressly stated that the earlier decisions in Roads Department, Pacific Trade House, and Naftogaz v Gazprom could not be regarded as finally resolving the jurisdictional issue because that issue had not been fully considered.
Future case law, including that of the Court of Appeal, will have to determine whether the AIFC Court constitutes an independent avenue for the recognition and enforcement of foreign arbitral awards or whether its role is limited to disputes and parties that have a genuine connection with the AIFC.
Justice Sir Rupert Jackson concluded that the AIFC Court lacked jurisdiction to hear the application. He noted that Article 14 of the Constitutional Statute is entitled "International Arbitration Centre" and must be interpreted in the context of the AIFC. The jurisdiction of the AIFC Court is determined by Article 13 of the Constitutional Statute. The AIFC Court Regulations and the AIFC Arbitration Regulations constitute subordinate legislation and cannot extend the jurisdiction of the AIFC Court beyond the limits established by the Constitutional Statute.
Of particular importance, the judge expressly referred to Roads Department, Pacific Trade House, and Naftogaz v Gazprom, observing that the jurisdictional issue had not been fully considered in those cases.
The POSCO decision and the position adopted by the Ministry of Justice clearly differ from the direction that had begun to emerge from the preliminary decisions in Roads Department, Pacific Trade House, and Naftogaz v Gazprom.
It is now possible to identify two competing approaches.
The first is an expansive approach: the AIFC Court may recognise foreign arbitral awards on the basis of the broader translation of Article 14(4) of the Constitutional Statute, Rule 40(3) of the AIFC Court Regulations, and Article 45 of the AIFC Arbitration Regulations.
The second is a restrictive approach: the AIFC Court is not a universal forum for the enforcement of foreign arbitral awards that have no connection with the AIFC, and its jurisdiction must remain within the limits established by Article 13 of the Constitutional Statute.
The decision in Naftogaz v Gazprom does not yet provide a final answer to this question, since it was made without the respondent’s participation and was expressly characterised as preliminary. The POSCO decision has not brought the debate to an end, but it has provided the most detailed judicial reasoning in support of the restrictive approach. The AIFC Court expressly stated that the earlier decisions in Roads Department, Pacific Trade House, and Naftogaz v Gazprom could not be regarded as finally resolving the jurisdictional issue because that issue had not been fully considered.
Future case law, including that of the Court of Appeal, will have to determine whether the AIFC Court constitutes an independent avenue for the recognition and enforcement of foreign arbitral awards or whether its role is limited to disputes and parties that have a genuine connection with the AIFC.