Choosing the Enforcement Route for a Foreign Award in Kazakhstan

When a foreign arbitral award must be enforced against assets in Kazakhstan, selecting the correct court route is critical: the state court system – not the AIFC Court – is the competent forum for recognition and enforcement under the New York Convention. A July 2026 decision clarified this boundary definitively, and any creditor that has already invested time and resources in the wrong forum faces compounding delay and potential loss of enforcement leverage. Understanding how that jurisdictional line was drawn, and what it means in practice, is the starting point for any effective enforcement strategy in Kazakhstan.

The Scenario: A Creditor Facing an Asset-Rich Debtor in Kazakhstan

The following is an illustrative scenario based on the types of matters that arise in cross-border enforcement practice. No specific client, amount or outcome is represented as real. The scenario is designed to draw out transferable lessons from recent procedural and jurisdictional developments in Kazakhstan.

Consider a European fund holding an ICC arbitral award issued in June 2025, with Switzerland as the seat of arbitration. The respondent – a large Kazakhstani commercial entity – has identified assets in Kazakhstan. The creditor's instinct, shared by many sophisticated parties unfamiliar with Kazakhstan's dual-court architecture, is to proceed before the Astana International Financial Centre (AIFC) Court: an institution staffed by international judges, operating under common law principles, and perceived as a neutral and efficient forum.

That instinct, understandable as it is, leads directly into a jurisdictional trap that crystallised publicly in mid-2026.

The Naftogaz v Gazprom Watershed

The case Naftogaz v Gazprom (AIFC-C/CFI/2026/0002) provides the clearest current illustration of the risks. On 15 May 2026, Justice Andrew Spink KC issued an order recognising and permitting enforcement of an ICC award of approximately USD 1.4 billion, seated in Switzerland and rendered on 16 June 2025. On 7 July 2026, the AIFC Court – constituted before Lord Faulks KC – set that order aside on the basis that the Court lacked jurisdiction to enforce awards rendered in foreign-seated arbitrations.

The Kazakhstan Ministry of Justice reinforced the point: the AIFC Court is not part of the state court system. Foreign arbitral awards are recognised and enforced in Kazakhstan through the state courts, under the framework of the New York Convention. The AIFC Court's jurisdiction in enforcement matters is properly limited to awards where the AIFC itself was the seat – chiefly those administered by the Astana International Arbitration Centre (AFSA or IAC) under an AIFC seat.

For any creditor who had committed procedural steps, legal fees and, critically, time to an AIFC enforcement route for a Swiss-seated award, the July 2026 ruling represented an immediate reversal and the need to restart the process before the appropriate state court – with whatever window of enforceability remained.

For a detailed analysis of the July 2026 ruling and its implications, see our alert on the AIFC Court's decision in Naftogaz v Gazprom.

Strategy and Rationale: Mapping the Correct Route from Day One

The creditor's strategic question is not simply where to file but when and in what sequence, since enforcement timelines in Kazakhstan interact with asset preservation measures and the debtor's potential steps to dissipate or restructure assets.

The correct route for a foreign-seated award – whether ICC, LCIA, SCC or any other institution with a non-AIFC seat – is the Kazakhstani state court system under the New York Convention. The key considerations in structuring that process include:

• Jurisdiction of the state court: the competent court is determined by the location of the debtor or its assets within Kazakhstan; engaging local counsel at the outset to map asset locations is therefore a pre-filing step, not an afterthought.
• New York Convention grounds for refusal: Kazakhstan is a contracting state, and the recognised grounds for refusal – procedural irregularity, public policy, lack of notice – are the primary defences a debtor will raise; anticipating and pre-empting them in the filing package is essential.
• Asset freezing and interim measures: an application for asset freezing (obespechitel'nye mery) can be filed in parallel with or in advance of the recognition application; timing this correctly, so that the debtor cannot dissipate assets once it becomes aware of enforcement proceedings, is one of the more technically demanding aspects of debt collection in Kazakhstan.
• Late payment interest: the award itself may carry late payment interest, and establishing the accrued sum correctly at the point of filing supports the quantum presented to the state court.
• Unpaid invoice documentation: underlying commercial documents – unpaid invoices, contract, payment records – form part of the enforcement file even where the award is self-standing, as the state court may require context to assess any public policy objections raised by the debtor.

If the award was rendered in an AIFC-seated arbitration (for example, under AFSA or IAC rules with an Astana seat), the analysis differs: the AIFC Court is the natural enforcement forum, and the common law procedural framework it applies may be more familiar to international creditors. The seat of arbitration is therefore a structurally important decision to make before the dispute arises.

If your organisation is weighing enforcement options or reviewing arbitration clauses for Kazakhstani counterparties, our team is available to discuss the practical implications – please reach out to info@ferrazwhitmore.com or visit our contacts page.

Milestones in a State Court Enforcement Process

The process before Kazakhstan's state courts follows a structured sequence, though timelines are subject to court workload, the debtor's procedural conduct, and the complexity of any refusal grounds raised. The typical milestones, in order, are:

• Preparation of the recognition application: translation of the award and arbitration agreement into Kazakhstani state language (Kazakh), notarisation and apostille of documents where required, and preparation of the petition for recognition under the New York Convention framework.
• Filing and initial review: the court examines formal compliance before setting a hearing date.
• Hearing on recognition: both parties may appear; the debtor may raise New York Convention defences at this stage.
• Issuance of a writ of enforcement (ispolnitel'ny list): if recognition is granted, this document is the instrument that initiates enforcement through the state enforcement officers (bailiffs).
• Asset enforcement: the bailiff service identifies and levies against assets; at this stage, a payment order or direct account levy may be applied, depending on the asset class.
• Debtor challenge and appeal: the debtor may apply to set aside the recognition order or challenge enforcement steps; a well-prepared initial application reduces, though does not eliminate, this risk.

Complications: Where Enforcement Strategies Unravel

The Naftogaz v Gazprom sequence illustrates one category of complication – forum error. In practice, several other complications arise with regularity in Kazakhstan enforcement matters:

• Asset concealment and restructuring: debtors who anticipate enforcement may transfer assets to related entities or encumber them before a freezing order is in place; early intelligence on the debtor's asset structure is accordingly a risk-management priority.
• Public policy objections: the public policy ground under the New York Convention is interpreted variably across contracting states; in Kazakhstan, counsel should assess whether the award's subject matter or procedural history creates any plausible public policy argument for the debtor, and address it proactively.
• Currency and repatriation considerations: enforcement of an award denominated in a foreign currency may involve conversion at the official rate; the interaction with late payment interest and the enforcement quantum requires careful calculation.
• Sanctions and trade considerations: in cross-border matters involving parties or assets connected to sanctioned jurisdictions or entities, enforcement strategy must be checked against applicable sanctions frameworks before any steps are taken. Our sanctions and trade practice in Kazakhstan advises on these intersecting constraints.

Outcome Category and Transferable Lessons

In the illustrative scenario described above, a creditor who correctly identifies the state court route from the outset, files a complete and well-documented recognition application, and secures an interim asset-freezing order before the debtor can respond is positioned in the strongest achievable enforcement posture. That is not a guarantee of recovery – the debtor retains procedural rights and the court retains discretion – but it avoids the compounding losses that attach to a misstated forum.

Three transferable lessons emerge from the current Kazakhstani enforcement landscape:

1. The seat of arbitration determines the enforcement forum. An AIFC seat means the AIFC Court; any other seat means the state court system under the New York Convention. This is now beyond doubt following the July 2026 ruling. Creditors should audit their arbitration clauses and any pending awards against this framework before committing to a procedural route.
2. Interim asset preservation cannot wait. The window between a debtor becoming aware of imminent enforcement and the issuance of a freezing order is the highest-risk period in any debt collection process. In Kazakhstan, as in most jurisdictions, that window should be minimised by coordinating the recognition application and the asset-freezing application as closely as possible.
3. Local procedural knowledge is not interchangeable with general arbitration expertise. The AIFC Court's common law framework and the Kazakhstani state court system operate under fundamentally different rules, languages and institutional cultures. A law firm Kazakhstan-resident practitioners or strong local counsel network is not optional – it is the difference between an enforcement strategy that is viable and one that is not.

Our debt recovery practice in Kazakhstan covers the full enforcement cycle, from award analysis and forum selection through to asset-level recovery, working with qualified local counsel as required by Kazakhstani professional rules.

If you are assessing how to proceed with an existing award or designing a dispute resolution clause for a new Kazakhstani counterparty, we are glad to assist. Please write to info@ferrazwhitmore.com or visit our contacts page to arrange an initial discussion.

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.