A court in Kazakhstan has allowed Ukraine's Naftogaz to enforce $1.4 billion award it was granted against Gazprom, the company said in a statement on Wednesday.
The Astana International Financial Centre Court recognized the arbitration award and allowed for its enforcement in the country in favor of Naftogaz. The statement did not say how Naftogaz could pursue asset recovery in Kazakhstan against Gazprom.
Naftogaz nonetheless said this was the first instance of a public court in a foreign territory recognizing and granting permission for the enforcement of the award.
The company, whose interests in Kazakhstan are represented by ADL Disputes and Wikborg Rein, said this was another concrete step in recovering funds from Gazprom.
Under the 2019 Russia-Ukraine Gas Transit Agreement, Naftogaz Group was obligated to organize the transit of natural gas through the territory of Ukraine for Gazprom until the Agreement expired on Jan. 1, 2025.
The dispute centers around what Naftogaz said is Gazprom's failure to pay Naftogaz in full for the transit of Russian gas over Ukrainian territory.
"Gazprom refused to pay fully for gas transportation organization services, thereby breaching its contractual obligations," the company said.
has reached out to Gazprom for comments.
Naftogaz started arbitration proceedings in September 2022 in Switzerland under the rules of arbitration of the International Chamber of Commerce, as per the terms of the agreement between the two.
That ended with the tribunal finding Gazprom fully liable after failing to fulfil its obligations, with no justification for non-payment found. It ordered Gazprom to pay what was owed to Naftogaz, including interest and arbitration costs.
Gazprom appealed, but the Swiss Federal Tribunal dismissed this in January.
Since Gazprom continues to ignore that ruling, Naftogaz said it is pursuing an international asset recovery campaign in multiple locations with a view to its eventual indemnification.