Gazprom refuses to abide by final and binding awards in two commercial arbitration cases with Naftogaz

27.03.2018, 16:06:32

Ukraine's Naftogaz and Russia's Gazprom met last week to discuss next steps after Naftogaz had won two major cases before the Stockholm Arbitration Tribunal. At that meeting Gazprom made clear that the Russian gas monopoly refuses to resume deliveries to Ukraine as ordered by the Tribunal in the Gas Sales Case concluded in December last year, and refused to confirm that it will pay the 2.6 billion dollars which the Tribunal ordered it to pay in the Gas Transit Case award which was rendered in February. Both arbitration awards are final and binding on Gazprom.

Gazprom’s position in the meeting was instead to amend the contracts or to terminate the contracts to reverse the decisions of the Tribunal. Both positions are in direct contravention of and disregard for the decisions in the Arbitral Awards rendered by the Stockholm Tribunal. Naftogaz finds this position unacceptable and has rejected Gazprom’s proposals to this effect.

“Gazprom’s refusal to honour valid arbitration awards by an internationally valued and respected commercial arbitration tribunal seriously questions Gazprom's trustworthiness as a partner to the European gas industry. It is also endangering the respect for contracts as such with its unlawful withholding of payments due under the decisions of the Tribunal,” says Yuriy Vitrenko, Group Chief Commercial Officer of Naftogaz.

The Stockholm Arbitration Tribunal had jurisdiction in the cases following from contractual agreements to that effect between Gazprom and Naftogaz.

The parties agreed to have another round of negotiations in April where Gazprom is also expected to comment on Naftogaz’ tariff revision request and the use of Ukrainian gas transmission system for transit of gas from Russia to the EU beyond the expiration of the current contract in 2019.

Corporate Communications Department
NJSC Naftogaz of Ukraine