Kazakh special economic zone court rules in favour of Ukraine over Russia

A court in Kazakhstan has inserted itself into the Russia-Ukraine conflict, ruling in favour of Ukrainian state gas entity Naftogaz in a $1.4-bn dispute with Russian energy behemoth Gazprom.

The judgement and order issued by the court of Astana International Finance Center (AIFC) endorses last year’s ICC International Court of Arbitration award in favour of Naftogaz. “The ICC Award dated 16 June 2025 … in the arbitration Case No. 27245/GL/DTI between the Claimant and the Defendant shall be recognized and enforced,” the AIFC ruling states, adding that the ICC tribunal “had jurisdiction to decide on the matters to be decided.”

The AIFC judgement goes on to order Gazprom to pay Naftogaz over $1.13bn, along with almost $300mn in accrued interest. In addition, Gazprom is responsible for paying over 5mn euros in court costs.

“All other requests, claims, counterclaims and/or relief sought by the Parties are dismissed,” the ruling adds. Gazprom was given 14 days from the date of the May 15 ruling to appeal and have the judgement set aside.

The AIFC ruling contains a lengthy explanation of its jurisdiction and right to issue a decision relating to the ICC arbitration award. The court cites several provisions in its regulations, including one stating: “The Court may issue rules or practice directions for the further enforcement of other judgments and arbitration awards.”

The Naftogaz-Gazprom arbitration case dates to 2019 over a claim made by the Ukrainian entity that the Russian company failed to make full payments for gas transit fees. The transit agreement expired on January 1, 2025. Russia launched an unprovoked invasion of Ukraine in early 2022.

The AIFC decision is the first court ruling worldwide to uphold the arbitration award. Naftogaz had filed suit in various jurisdictions seeking to recover the ICC arbitration award, which Gazprom has, to date, ignored. So far, neither Gazprom representatives nor the Kremlin have commented on the AIFC ruling.

The AIFC is a special economic zone in Kazakhstan and its court is “separate and independent from the judicial system of the Republic of Kazakhstan.” The AIFC court “has its own procedural rules modelled on the principles and procedures of English common law and standards applied by the world’s leading financial centers.”

Though operating outside of the Kazakh state judicial system, the AIFC decision represents an important test case for the Kazakh government, which maintains strong bilateral ties with Russia, while seeking to attract increased levels of Western investment. Since the start of the Russia-Ukraine war, Kazakh leaders have tried to stake out a generally neutral stance.

This article first appeared on Eurasianet here.

Depending on how the AIFC ruling plays out, it can bolster confidence among potential foreign investors that they can receive a fair hearing in Kazakhstan in the event of a financial dispute, while also demonstrating that Astana is not a Russian pawn. 

The AIFC officially launched in 2018. The special economic zone describes itself as designed to “attract capital in an enabling environment with regulation based on the best international standards, robust financial framework and an independent judicial system.”