Naftogaz Won $1.4B Against Gazprom in Kazakhstan — Then Lost Immediately. How Ukraine Tries to Seize Russian Assets Abroad

On May 21, the Astana International Financial Centre (AIFC) Court issued a ruling that should have been a breakthrough: it authorized enforcement of a $1.4 billion arbitration award in favor of Naftogaz against Gazprom on Kazakh territory. The next day, May 22, Kazakhstan's Ministry of Justice effectively nullified that ruling, announcing the government would not enforce it.

This is a textbook illustration of why seizing assets of a hostile state through third countries is one of the most difficult operations in international financial law.

Background: where the $1.4B came from

Naftogaz and Gazprom have been in litigation for years over transit contracts and supply obligations that pre-date 2022. In June 2025, the Stockholm Arbitration Tribunal ruled in Naftogaz's favor for $1.4 billion. But an arbitration award is just paper. To collect real money, you need to find the debtor's assets and enforce against them through the courts of the country where those assets actually exist.

Kazakhstan is attractive for this purpose. Gazprom has significant operational presence there through joint gas transport projects. The AIFC is a relatively independent jurisdiction with its own English law-based court — theoretically more open to enforcing foreign arbitration awards.

On May 21, the AIFC court issued the enforcement order. It was supposed to be the first successful step.

Why Kazakhstan refused

Here geopolitics takes over. Kazakhstan is a member of the Eurasian Economic Union (EAEU) alongside Russia. It maintains a delicate balance between preserving ties with Moscow and normalizing relations with the West. Directly enforcing a ruling against Gazprom — Russia's largest company — would mean a direct confrontation with the Kremlin.

The refusal by the Ministry of Justice is legally awkward: the AIFC court is technically independent of Kazakhstan's executive branch. But in practice, the government controls whether court orders are actually executed through the state apparatus — police, prosecutors, asset registries.

Sovereign immunity and the empty-shell problem

Recovery against state-owned companies is especially hard because of the sovereign immunity doctrine: states and their instrumentalities are traditionally shielded from forced execution in foreign courts unless they have explicitly waived that protection. Gazprom is formally a joint-stock company, but is more than 50% state-controlled — which provides ammunition for immunity arguments.

Even when a court rules against such companies, the enforcing country can refuse, citing diplomatic pressure, "public order," or simply the absence of executable assets in its jurisdiction.

What this means for Naftogaz's strategy

Naftogaz is pursuing multiple simultaneous cases across jurisdictions — the Netherlands, Luxembourg, France, Switzerland, the US. Each attempt is a search for a vulnerable point: where does Gazprom have assets, and where are both the court and the government willing to follow through on enforcement?

The Kazakhstan case delivers a useful lesson: even a legally favorable ruling in a relatively friendly jurisdiction can be blocked at the execution stage through geopolitical pressure. For Ukraine's broader asset recovery effort, this is an important precedent — international arbitration is the first step, not the final one.

For investors following Ukraine's recovery: successful Gazprom collection would materially improve Naftogaz's balance sheet and partially offset losses from destroyed gas infrastructure. The Kazakhstan setback means those funds remain out of reach for now.

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Sources: Meduza — Kazakhstan court authorizes enforcement · Rigzone · The Moscow Times · Kyiv Post — Kazakhstan refuses