AIFC Court sets aside Naftogaz recognition order against Gazprom for lack of jurisdiction

Introduction

In a decision dated 7 July 2026, the Court of First Instance of the Astana International Financial Centre in case number AIFC-C/CFI/2026/0002, National Joint Stock Company “Naftogaz of Ukraine” JSC v Gazprom PJSC, rendered a judgment on the AIFC Court’s jurisdiction to recognise and enforce a foreign-seated ICC arbitral award.

Justice Lord Faulks KC set aside the earlier order of Justice Andrew Spink KC dated 15 May 2026, which had recognised and enforced an ICC award made in Switzerland on 16 June 2025. The judgment follows the reasoning in the Posco case (https://kdb.legal/en/aifc-court-at-a-crossroads-naftogaz-v-gazprom-posco-v-national-centre-and-the-limits-of-recognition-jurisdiction/) and confirms, at first instance, that the AIFC Court’s jurisdiction is limited by Article 13 of the AIFC Constitutional Statute.

Background of the case

On 15 May 2026, Justice Andrew Spink KC made an order recognising and enforcing an ICC arbitral award in favour of Naftogaz against Gazprom. The award had been rendered under the auspices of the ICC International Court of Arbitration by a tribunal seated in Switzerland.

The May order required Gazprom to pay the amount of the award, together with interest and costs. However, it was made without notice to Gazprom. Justice Spink therefore gave Gazprom liberty to apply to set the order aside within 14 days of service.

The key issue in the set-aside application was whether the AIFC Court had jurisdiction to recognise and enforce an arbitral award that had not been issued in Kazakhstan and had not been made under the AIFC International Arbitration Centre.

Lord Faulks heard full submissions from both parties. He also considered the earlier judgment of Justice Sir Rupert Jackson in Posco Co. Ltd. v Republican State Enterprise “National Centre for Complex Processing of Mineral Raw Materials of the Republic of Kazakhstan”, in which the AIFC Court had held that it lacked jurisdiction to recognise and enforce a Swiss-seated ICC award unless one of the jurisdictional gateways in Article 13 of the AIFC Constitutional Statute was satisfied.

The jurisdictional framework

The dispute turned principally on Articles 13 and 14 of the AIFC Constitutional Statute.

Article 13(4) provides that the AIFC Court has exclusive jurisdiction over three categories of disputes:

“1) disputes between AIFC Participants, AIFC Participants and AIFC Bodies and an AIFC Participant or an AIFC body and its expatriate employees;
2) disputes relating to activities conducted in the AIFC and governed by the Acting Law of the AIFC;
3) disputes transferred to the AIFC by agreement of the parties.”

Lord Faulks held that the Naftogaz enforcement application did not fall within any of these gateways. The parties were not relying on a dispute between AIFC participants, the dispute did not relate to activities conducted in the AIFC and governed by AIFC law, and the parties had not agreed to submit the matter to the AIFC Court.

Naftogaz argued that the Court should consider the wider constitutional context and treat the AIFC Court as exercising a general civil and commercial jurisdiction. Lord Faulks rejected that approach. He relied on the wording of Article 13, which uses the language of exclusive jurisdiction, and on Article 13(2), which states that the AIFC Court is independent and “is not part of the judicial system of the Republic of Kazakhstan”.

The judgment also refers to Lord Mance CJ’s statement in Michael Wilson and Partners Ltd v CJSC Kazsubton and Kazphosphate Limited that the AIFC Court has “a specifically delimited jurisdiction which is exhaustive as regards the heads stated in Article 13”.

Article 14 and the translation issue

Naftogaz also relied on Article 14(4) of the AIFC Constitutional Statute. The English version quoted in the judgment states:

“Awards of arbitration courts in the Republic of Kazakhstan are to be recognised and enforced in the territory of the AIFC in accordance with legislation of the Republic of Kazakhstan.”

Earlier AIFC decisions had considered whether this translation was incorrect. In Roads Department of the Ministry of Infrastructure of Georgia v Todini Costruzioni Generali S.p.A., the Court had been persuaded that a better translation might be:

“Recognition and enforcement of arbitral awards in the territory of the Centre shall be carried out in accordance with the legislation of the Republic of Kazakhstan”.

Lord Faulks accepted Justice Jackson’s analysis in Posco that the revised translation was correct. However, he also accepted Posco’s conclusion that Article 14(4) does not create a free-standing jurisdiction to enforce arbitral awards from anywhere in the world.

The Court reasoned that Article 14 is concerned with the AIFC International Arbitration Centre. When parties agree to arbitrate before the AIFC IAC, they agree to accept the jurisdiction of the AIFC Court. By contrast, parties who agree to ICC arbitration, or ad hoc arbitration, do not thereby agree to AIFC Court jurisdiction.

Subordinate legislation could not expand jurisdiction

Justice Spink had relied on Article 40 of the AIFC Court Regulations and Article 45(1) of the AIFC Arbitration Regulations when making the May recognition order.

Lord Faulks took a different view. Following Posco, he held that subordinate legislation cannot enlarge the jurisdiction conferred by the Constitutional Statute. He also noted that Article 40(3) of the AIFC Court Regulations allows the Court to issue rules and practice directions for further enforcement of other arbitration awards, but that no such rules or practice directions had been issued.

The Court therefore concluded that neither the AIFC Court Regulations nor the AIFC Arbitration Regulations could provide jurisdiction where Article 13 did not.

Treatment of earlier AIFC decisions

Lord Faulks acknowledged that earlier AIFC decisions, including Todini and Pacific Trade House Ltd v Altai Polymetals LLP and Teretky Ken Bayytu LLP, had reached conclusions different from Posco and from the present judgment.

However, he distinguished those cases on the basis that they had been decided on a prima facie basis and without full argument from both sides. The same procedural distinction applied to Justice Spink’s earlier order in Naftogaz, which had been made without notice to Gazprom and in expressly tentative terms.

Lord Faulks also referred to Sandra Holding Ltd v Al Saleh, a decision of the DIFC Court of Appeal relied on by Gazprom. He noted that there were parallels between the DIFC and AIFC statutory frameworks, but did not find it necessary to rely on that case.

Outcome

The AIFC Court set aside Justice Spink’s order of 15 May 2026. The parties were invited to make written submissions within 14 days on costs and any consequential orders.

The decision therefore brings the Naftogaz proceedings into line with Posco at first instance. Both judgments now proceed on the basis that the AIFC Court may not recognise and enforce a foreign-seated arbitral award unless the case falls within the jurisdictional gateways in Article 13 of the AIFC Constitutional Statute.

The decision is subject to appeal.