Gusar New Technologies v. Zhenis Operating

Russian subsea equipment supplier Gusar New Technologies (GNT) supplied equipment to Zhenis Operating (ZOL), a joint venture of Lukoil’s Kazakhstan unit and KazMunayGas for the Zhenis field project in the Caspian Sea. After sanctions were imposed in 2022, GNT stated that performing its obligation to buy back the equipment would breach them. In October 2023, GNT commenced arbitration at the AIFC International Arbitration Centre in Astana to recover a debt. ZOL brought a $1.8M counterclaim for breach of the buy-back obligation. The tribunal partly upheld GNT’s claims but, by a majority, found that ZOL’s counterclaims exceeded them. On May 29, 2026, AIFC Court judge Sir Rupert Jackson refused GNT’s application to set aside the award, rejecting the arguments that ZOL was not a party to the arbitration agreement and those based on the effect of sanctions.

The AIFC Court upheld an award against a Russian supplier, rejecting the argument that sanctions gave rise to force majeure in respect of the buy-back obligation. The case illustrates the risks Russian parties face when their disputes are heard in arbitration, even in jurisdictions that are neutral toward Russia.