Naftogaz initiates enforcement of Stockholm Awards

30.05.2018, 14:39:24

In light of Gazprom's unwillingness to comply with its legal obligations under the final awards rendered in the sales and transit arbitrations in Stockholm, Naftogaz has initiated enforcement of the USD 2.6 billion award. The company confirms that it has asked the Swiss courts to enforce the award, and understands that Swiss authorities already have taken measures against Gazprom's assets there.

On 22 December 2017 and 28 February 2018 an Arbitral Tribunal under the auspices of the Arbitration Institute of the Stockholm Chamber of Commerce rendered final awards in the arbitrations between Naftogaz and Gazprom. The awards are final and were enforceable from the moment they were rendered.

Gazprom has not complied with the awards, which obliged Gazprom to resume gas supplies to Naftogaz at a price pegged to a liquid European hub and to pay USD 2.6 billion to Naftogaz as damages for underdeliveries of gas for transit. Naftogaz fulfilled all its obligations pursuant to the awards on 28 February 2018, when its remaining payment obligations for gas taken in 2013 and 2014 were settled.

Despite the awards and timely pre-payment by Naftogaz, Gazprom refused to resume deliveries to Naftogaz as agreed on 1 March 2018. Gazprom has also not paid the USD 2.6 billion it owes Naftogaz. Instead, Gazprom has launched ill-founded proceedings against the awards in the Swedish courts and initiated a new arbitration attempting to reverse the outcome of the awards.

Under international law, the arbitral awards are enforceable in practically every country of the world. Gazprom’s challenge proceedings do not prevent the enforcement of the awards.

Corporate Communications Department
NJSC Naftogaz of Ukraine