A landmark ruling issued on 7 July 2026 by the AIFC Court has clarified that the court lacks jurisdiction to recognise and enforce foreign-seated arbitral awards in Kazakhstan. For international companies holding unpaid awards against Kazakhstani counterparties, this means that enforcement must proceed through Kazakhstan's state court system under the New York Convention, not through the AIFC Court. Understanding which route applies, and acting promptly, is now critical for creditors seeking debt collection against assets located in Kazakhstan.
What Happened and When
The dispute arose in proceedings captioned Naftogaz v Gazprom (AIFC-C/CFI/2026/0002). On 15 May 2026, Justice Andrew Spink KC recognised an ICC award of approximately USD 1.4 billion seated in Switzerland (award dated 16 June 2025) and granted an order permitting enforcement within the AIFC jurisdiction. That order was set aside on 7 July 2026 by Lord Faulks KC, who held that the AIFC Court does not have the power to enforce foreign-seated arbitral awards.
The Kazakhstan Ministry of Justice has publicly confirmed that the AIFC Court sits outside the state court system. As a result, any recognition order issued by the AIFC Court in respect of a foreign award does not carry the enforcement machinery available to state court judgments across Kazakhstan's territory.
Why This Matters for International Creditors
Many international companies – particularly those in energy, infrastructure and trade finance – structured their dispute resolution clauses expecting the AIFC Court's common law environment and internationally experienced judges (the court operates in English under common law principles) to offer a straightforward route to enforcement of judgment. The July 2026 ruling removes that assumption.
The practical consequences include:
- No shortcut via AIFC: A creditor holding a foreign ICC, LCIA, SCC or UNCITRAL award cannot rely on the AIFC Court to convert that award into an enforceable instrument against Kazakhstani assets.
- State court route is mandatory: Recognition and enforcement of foreign awards in Kazakhstan proceeds exclusively through state courts under the New York Convention framework and applicable domestic procedural rules.
- Limitation periods apply: Enforcement applications under state court rules are subject to time limits. Creditors who were waiting for the AIFC route to be confirmed should review their deadlines immediately to avoid losing their right to enforce.
- Asset freezing is tied to jurisdiction: Interim relief and asset freezing orders in support of enforcement can only be granted by a competent court. The identity of that court now determines which freezing mechanisms are available.
- Late payment interest and ancillary claims: Creditors should confirm whether their award includes, or whether they may separately pursue, late payment interest and costs through the state court enforcement process.
If your company is holding an unpaid invoice backed by a foreign arbitral award or is monitoring enforcement of judgment in Kazakhstan, we are available to review your position. Please contact us at info@ferrazwhitmore.com or visit our contacts page.
State Courts vs AIFC Court: The Dividing Line After July 2026
The AIFC Court retains jurisdiction over disputes that fall within the AIFC's defined scope – broadly, commercial matters between parties that have agreed to its jurisdiction or that arise within the AIFC ecosystem. What it cannot do, following the July 2026 ruling, is act as a gateway for enforcing awards issued by tribunals seated outside Kazakhstan or outside the AIFC.
The state court system, by contrast, operates as Kazakhstan's competent authority under the New York Convention. A foreign award creditor must:
- file a recognition and enforcement petition before the relevant state court;
- supply a duly certified and, where required, apostilled or legalised copy of the award and the arbitration agreement;
- satisfy the court that none of the grounds for refusal under Article V of the New York Convention apply; and
- comply with domestic procedural requirements, including language and translation rules, that are subject to national rules and should be confirmed with Kazakhstani counsel.
The AFSA (Astana Financial Services Authority) regulates entities operating within the AIFC, and the IAC (International Arbitration Centre) administers arbitration seated within the AIFC. Awards issued by the IAC with an AIFC seat are a distinct category and are not directly affected by this ruling – the ruling concerns awards seated outside Kazakhstan that creditors sought to enforce through the AIFC Court.
Who Is Affected
This alert is relevant to any party that:
- holds or anticipates holding a foreign arbitral award (ICC, LCIA, SCC, UNCITRAL or other) against a Kazakhstani entity with assets in Kazakhstan;
- is currently in enforcement proceedings or considering initiating them in Astana or elsewhere in Kazakhstan;
- included an AIFC Court recognition clause in its enforcement strategy in reliance on the May 2026 order; or
- is involved in cross-border trade or investment disputes where Kazakhstan is the debtor's domicile or principal asset location.
Companies in the energy sector, financial services, infrastructure and commodities trading are particularly exposed, given the volume of ICC and other institutional arbitration awards involving Kazakhstani state or quasi-state entities.
Immediate Action Points
In light of the July 2026 ruling, international companies should consider the following steps without delay:
- Audit pending enforcement strategies: If any step in your enforcement plan assumed AIFC Court recognition as an intermediate stage, that assumption must now be revised.
- Review limitation periods: Identify the applicable deadline for filing a recognition petition in the Kazakhstani state courts and confirm whether any steps already taken – such as the May 2026 AIFC order – affect the running of time.
- Assess asset location: Map the debtor's attachable assets in Kazakhstan to determine the appropriate state court venue for enforcement and for any asset freezing application.
- Obtain Kazakhstani procedural advice: Translation requirements, filing fees, and procedural timelines are governed by national rules and should be confirmed with a law firm Kazakhstan with relevant state court experience.
- Preserve all award documentation: Ensure original or certified copies of the arbitral award, tribunal constitution records, and the arbitration agreement are held in a form that will satisfy state court evidentiary requirements.
For a more detailed analysis of how to select the appropriate enforcement route given your award's seat and the debtor's asset profile, see our case note on choosing the enforcement route for a foreign award in Kazakhstan.
Sanctions and Trade Compliance Considerations
For creditors whose counterparties are subject to international sanctions or whose awards arise from trade finance disputes, the enforcement process in Kazakhstan may intersect with sanctions compliance obligations. Any payment order or asset recovery strategy should be reviewed against applicable sanctions regimes before steps are taken. Our sanctions and trade practice in Kazakhstan can assist with that analysis.
How Ferraz & Whitmore Can Assist
Our Kazakhstan practice advises international clients on cross-border debt collection, recognition of foreign arbitral awards, and enforcement of judgment through Kazakhstani state courts. We work with local counsel networks in Astana and Almaty and have experience coordinating multi-jurisdictional enforcement strategies where the debtor holds assets across several countries.
If you are dealing with an unpaid invoice backed by a foreign award, need to assess your enforcement timeline, or wish to understand how the July 2026 ruling affects your specific position, please contact our team at info@ferrazwhitmore.com or through our contacts page.
Further information on our debt recovery services in Kazakhstan, including enforcement procedures and interim relief options, is available at ferrazwhitmore.com/services/debt-recovery/kazakhstan/.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.