Kazakhstan's justice minister has said that Naftogaz may not be able to enforce a foreign ruling against Gazprom on its territory through the seizure of the Russian company's assets to settle a $1.4 billion dispute over unpaid gas transit fees, according to a news report by the country's Channel 7 News.
Naftogaz last week said the Astana International Financial Center Court's ruling would enable it to seize Gazprom assets in Kazakhstan.
Channel 7 reported, citing Minister of Justice Erlan Sarsembayev, that the ruling was a "notification order" that has not yet entered into force and that Kazakhstan would need the consent of both parties for the AIFC to rule on the matter in order for the decision to be valid and that Gazprom had not offered this.
The minister said the defendant has the right to file an appeal, after which a full hearing would take place, with both parties participating, without explaining how this would be possible without Gazprom's aforementioned necessary consent, 7 News reported.
Sarsembayev said it is too early to talk about enforcement at this point, according to the report.
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.
Channel 7 further said that the Astana court's appeal window is 14 days, leaving about one week for a Gazprom appeal. However it noted that the minister also said Kazakhstan would not become a place for the enforcement of legal decisions unconnected to the country.
Nonetheless, the minister, according to the channel, said that the AIFC Court process was not yet complete, that both sides would be heard and only then a final decision would be made, leaving some apparent ambiguity over what procedures will be followed.
Naftogaz said in a statement on May 20 that the AIFC had said that it recognized the arbitration decision the Ukrainian company received in its favor and would allow it to enforce the decision in Kazakhstan.
Naftogaz said that was the first such pronouncement it had received from a foreign court, clearing the way for asset recovery.
has reached out to Naftogaz seeking comment on the minister's pronouncements and for clarification on the details of the case.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)