Kazakhstan to pursue Kashagan operator fine despite arbitration ruling - Justice MinistryKazakhstan will press ahead with collecting a 2.3 trillion tenge environmental fine from the operator of the Kashagan oilfield, insisting that an interim measure ordered by a UNCITRAL commercial arbitration tribunal does not override national law, the Justice Ministry said Thursday."An interim measure issued by a foreign commercial arbitration does not take precedence over mandatory provisions of the republic's legislation," the ministry said in a statement. It said the ruling does not block enforcement of a final court judgment imposing the fine and does not restrict the state from exercising its sovereign authority to protect the environment and public interests."The republic will act in strict compliance with the law on enforcement proceedings and the status of bailiffs," the ministry said. "State bodies are not entitled to ignore the legally established procedure for enforcing court rulings or to circumvent procedures set out in law."The ministry called "unfounded" a statement by the North Caspian Operating Company regarding the legal effect of the tribunal's interim order. It stressed that the UNCITRAL arbitration is commercial, not investment-based."Consequently, the tribunal's authority is limited to resolving a private commercial dispute and does not extend to the state's exercise of sovereign public powers, including the application and enforcement of environmental legislation," the ministry said.The ministry argued that an interim measure issued by a foreign commercial arbitration has no automatic effect on Kazakh territory."Kazakhstan's procedural rules require recognition and enforcement of arbitral awards through Kazakh courts," it said. "Moreover, this case concerns not an arbitral award but an interim measure by a foreign commercial arbitration."The ministry also said that imposing and collecting penalties for environmental violations falls under public law and cannot be constrained by a commercial arbitration ruling that addresses a private dispute.The ministry further expressed concern that NCOC had disclosed "sensitive details about the ongoing UNCITRAL arbitration, including information about the tribunal's interim order.""Such public disclosure of the proceedings' details is inconsistent with the confidential nature of international arbitration and does not contribute to its proper conduct," it said.NCOC said earlier that the UNCITRAL tribunal had issued an interim order barring Kazakh authorities from taking enforcement action to collect the 2.3 trillion tenge fine.Deputy Justice Minister Daniel Vaisov previously said the consortium must pay the environmental fine by July 20 or face compulsory collection measures.Kazakh authorities and NCOC have been locked in court battles for several years over environmental violations uncovered at Kashagan in 2022.An inspection that year found NCOC had stockpiled more than 1.2 million tonnes of sulfur beyond permitted limits. Environmental officials also said the company had failed to fully implement its environmental protection plan, discharging untreated wastewater into an evaporation pond and flaring raw gas without a permit.NCOC challenged the findings in Kazakh courts, but its appeals were rejected at multiple levels, including the Supreme Court.In February 2026, Kazakhstan received notice from the International Center for Settlement of Investment Disputes that contractors working for the Kashagan operator had requested arbitration. The proceedings will take place in Washington, with the panel of arbitrators to be formed by the end of July, the Justice Ministry said at the time.Kashagan is one of the largest oil discoveries in recent decades, with recoverable reserves estimated at 9 billion to 13 billion barrels. Commercial production began in autumn 2016.NCOC's shareholders are KMG Kashagan B.V. (16.877%), Shell Kazakhstan Development B.V. (16.807%), Total EP Kazakhstan (16.807%), AgipCaspian Sea B.V. (16.807%), ExxonMobil Kazakhstan Inc. (16.807%), CNPC Kazakhstan B.V. (8.333%) and Inpex NorthCaspian Sea Ltd. (7.563%). (ICE ALMATY)

Fonte notizia: INTERFAX