Following long consideration, the Arbitration Institute of the Stockholm Chamber of Commerce has issued a partial award in the case initiated by UGV against Karpatygaz and Misen Enterprises AB (Karpatygaz shareholder, Sweden) regarding termination of a joint venture (JV) agreement.
The Tribunal’s award terminated the JV agreement, satisfying one of UGV’s claims.
The Tribunal found that the JV agreement had been violated by both Misen Enterprises AB (contributed only USD 3.9 million out of USD 12.5 million to the JV) and Karpatygaz (failure to supply metering stations as stipulated under the terms of the agreement).
The JV agreement is therefore terminated due to the change in circumstances and impossibility to continue the joint venture.
It should be noted that since 2015 UGV has consistently terminated JV agreements systematically violated by counterparties. The National Anti-Corruption Bureau of Ukraine under the procedural guidance of the Specialized Anti-Corruption Prosecutor’s Office has initiated a number of similar proceedings.
Prior to the Stockholm arbitration award, UGV managed to terminate all JV agreements that prevented the company from using its own wells, except for two agreements involving Karpatygaz.
The latest agreement terminated by the Stockholm Tribunal had been blocking UGV’s access to more wells than any other JV agreement concluded by the company.
Corporate Communications Department
NJSC Naftogaz of Ukraine