Naftogaz submits Statement of Claim in Gas Transit Arbitration against Gazprom

01.05.2015, 21:21:00

Naftogaz has submitted a Statement of Claim to the Arbitral Tribunal under the Rules of the Stockholm Chamber of Commerce in the Gas Transit Arbitration against Gazprom. This follows a Statement of Claim against Gazprom in the Gas Supply Arbitration submitted in the end of January this year.

The Arbitrations are part of a larger effort to open Central and Eastern European gas sales and transport markets to competition and to stop Gazprom's abuses of its dominant position in such markets.

In a Report of 3 December 2014, the Energy Community Secretariat concluded that the Gas Transit Contract between Naftogaz and Gazprom, entered into in January 2009, may be considered as incompliant with European competition and energy law. Just a week ago, on 22 April, the European Commission sent a Statement of Objections to Gazprom, alleging that Gazprom is pursuing an abusive overall strategy to partition Central and Eastern European gas markets, which may have enabled Gazprom to charge unfair prices.

In the Statement of Claim submitted this week, Naftogaz claims that a number of provisions in the Contract, including the tariff (price) provisions, are invalid based on European competition law and related energy law and must be replaced pursuant to provisions in the Contract, with retroactive effect.

Naftogaz also relies on Swedish contract law, which governs the Contract. When the Contract was concluded, the Parties agreed that it was based on European principles. The Statement of Claim seeks to implement this agreement.

As a consequence of the claims for amendment of the tariff, Naftogaz also submits a claim for compensation for underpayment of transit, to recover losses suffered at least since 2010.

Finally, Naftogaz submits claims for underdeliveries of gas under the Contract based on Gazprom's violations of its volume commitments.

Altogether, Naftogaz's monetary claims related to the transit contract amount to more than 10 billion USD. The total monetary claims related to both transit and supply contract amount to more than 16 billion USD.

Naftogaz is represented by Norwegian law firm Wikborg Rein in both Arbitrations.