Introduction

The dispute between AS Windoor and the Republic of Kazakhstan marks a significant development in investment treaty jurisprudence. An ICSID tribunal reportedly held in its award (“ICSID Award”) that a Stockholm Chamber of Commerce commercial arbitral award (“SCC Award”) constitutes a protected “investment” under the Estonia–Kazakhstan BIT (2011). Although the ICSID Award has not been published, publicly available information, including the claimant counsel’s press release, case database summaries, a monograph, and other sources, indicate that the ICSID tribunal found in favour of AS Windoor and concluded that Kazakhstan breached its treaty obligations by refusing to enforce the SCC Award and invalidating a state guarantee.

Background to the dispute

The dispute originated from the SCC Award in favour of AS Windoor, which was not enforced by Kazakh courts. AS Windoor, an Estonian construction company, entered a contract with a Kazakh company, Baltiiski Dom, to design, supply, and install glass and aluminum façade services for the business and conference centre project in Astana. Diplomat Stroi Servis, a state-owned enterprise, issued a letter of guarantee dated October 2, 2012 on behalf of Baltiiski Dom to secure the performance of the contractual payment obligations to AS Windoor. Upon completion of the project, a dispute ensued over non-payment of the contract sum. The letter of guarantee contained an arbitration clause, further to which the parties submitted the dispute to commercial arbitration under the Arbitration Rules of the SCC.

The SCC tribunal awarded the sum of EUR 23 million in favour of AS Windoor as the unpaid contract sum and damages. AS Windoor proceeded to enforce the SCC Award before the Kazakh domestic courts. The Astana City Special Inter-District Economic Court’s ruling on January 22, 2016, rejected AS Windoor’s request to recognize and enforce the SCC Award. The Kazakh appellate courts also upheld this decision, finding that the letter of guarantee that contained the arbitration clause was unenforceable.

Having exhausted domestic avenues to enforce the SCC Award in Kazakhstan, AS Windoor submitted a request to arbitrate before ICSID on September 18, 2018, under the Estonia–Kazakhstan BIT. In summary, AS Windoor’s claims in the ICSID arbitration centred on Kazakhstan’s alleged denial of justice and breach of the FET standard under the Estonia–Kazakhstan BIT by refusing to recognize and enforce the SCC Award. On January 24, 2025, the ICSID tribunal rendered its award in favour of AS Windoor. The ICSID tribunal recognized that the refusal of the Kazakh courts to recognize and enforce the SCC Award, and the invalidation of the letter of guarantee amounted to a breach of Kazakhstan’s treaty obligations under the Estonia–Kazakhstan BIT. The ICSID tribunal awarded AS Windoor the damages it sought, which includes the SCC Award sum of EUR 23 million. The award was delivered alongside a dissenting opinion. The text of the dissenting opinion has not been published.

The “investment” question

A central issue in the case concerned whether the SCC Award qualifies as an “investment” under the Estonia–Kazakhstan BIT. Although the ICSID Award has not been published, available information suggests that Kazakhstan likely challenged the jurisdiction of the tribunal, arguing that the SCC Award is not a covered investment protected under the Estonia–Kazakhstan BIT. On the other hand, AS Windoor likely relied on the treaty-defined test in Salini v Morocco in its argument, stating that the SCC Award crystalized its rights arising from a cross-border construction project that involved reliance on a state-guaranteed contract, technology transfer, and contribution of substantial resources. This therefore qualifies it as an investment in the territory of Kazakhstan.

While the ICSID Award remains confidential, available sources indicate that the tribunal upheld its jurisdiction. This tribunal appears to have followed an expansive interpretation of the definition of “investment,” recognizing that an arbitral award is not merely a claim to money but an extension of the original investment relationship. The Estonia–Kazakhstan BIT, however, adopts a broad definition of “investment” that expressly covers contractual rights and claims to money. From this perspective, the SCC Award did not exist in isolation but crystallized rights arising from a substantial construction project carried out in Kazakhstan and supported by a state-owned enterprise’s guarantee. According to the ICSID tribunal, this connection would place the SCC Award within the categories of protected assets stated in the Estonia–Kazakhstan BIT.

This approach is consistent with Saipem v. Bangladesh, where the tribunal held that an ICC arbitral award arising from a construction contract formed part of the protected investment because it represented the “residual contractual rights under the investment as crystallized in the ICC Award.” Similarly, ATA v. Jordan confirmed that the rights embodied in an arbitral award are an integral component of the investment.

In AS Windoor v. Kazakhstan, the construction of the business centre in Astana, the reliance on a state-owned enterprise’s guarantee and the subsequent judicial nullification of that guarantee anchored the SCC Award firmly within the economic and territorial framework of the investment. By recognizing the SCC Award as part of AS Windoor’s investment, the ICSID tribunal effectively affirmed that the protection of arbitral awards is central to the stability of the investment environment. Investors must be able to rely on both contractual and procedural mechanisms for dispute resolution without fear that a state will subsequently repudiate them.

Refusal of enforcement as treaty breach

The ICSID tribunal held that the refusal of the Kazakh courts to enforce the SCC Award is a breach of the Estonia–Kazakhstan BIT. The tribunal’s finding of denial of justice and a violation of FET obligations shows that judicial inaction or obstruction in enforcing arbitral awards can itself constitute a state’s wrongful conduct. This principle is reflected in cases such as Mondev v. USA and Loewen v. USA, where the tribunals affirmed that denial of justice may result from systemic judicial failure, or a manifestly unjust court decision.

In the instant case, the Kazakh courts, after refusing the enforcement of the SCC Award, delved further into the validity of the letter of guarantee and ultimately held that it is an invalid contract. This effectively extinguished AS Windoor’s rights. Such conduct is equivalent to judicial interference with the finality of an arbitral award and reflects a disregard for Kazakhstan’s obligations under the New York Convention.

Conclusion

The AS Windoor v. Kazakhstan award represents a significant development on the question of what constitutes an “investment” and the extent of states’ responsibility for judicial acts. The tribunal’s decision protects the enforceability of commercial arbitral awards, especially in circumstances where host states nullify them through domestic courts. As states continue to balance judicial independence with international commitments, AS Windoor v. Kazakhstan stands as a cautionary precedent that domestic court decisions that undermine arbitral finality may invite treaty liability.

Author

Oyindamola Aje is a PhD Candidate in Law at Queen’s University, Ontario, Canada, whose research examines the interaction between international investment law and climate change regulation.

Note

The ICSID tribunal was composed of Bruno Simma (Austrian, German national, President). Stephan Schill (German national, appointed by the claimant), and Brigitte Stern (French national, dissenting arbitrator, appointed by the respondent).

Annulment proceedings have been registered by Kazakhstan (the respondent) before the ICSID ad hoc committee, and the outcome of the award remains subject to further review.