Ukraine wins lawsuit under Gazprom's appeal against Stockholm arbitration ruling

"Total victory! Ukraine wins again! We have won an appeal under Gazprom's first complaint against a ruling of the Stockholm arbitration court," he wrote on his Facebook page.

Naftogaz's press secretary, Aliona Osmolovska, told Ukrinform that the Swedish court had rejected Gazprom's appeal against a separate decision issued in Stockholm on May 31, 2017.

"The decision, among other things, completely abolished Gazprom's 'take or pay' requirements," she said.

The decision also cancels the ban on gas re-exports.

After four years of arbitration proceedings between Naftogaz and Gazprom under two contracts, the Arbitration Institute of the Stockholm Chamber of Commerce made two important decisions: the first one on December 22, 2017, on a "take or pay" gas supply contract and the second one on February 28, 2018, on a gas transit contract.

As a result of the two proceedings, Gazprom has to pay Naftogaz $2.56 billion, taking into account $2.1 billion that Naftogaz has already received in the form of natural gas supplied in 2014.

According to the Ukrainian company, on December 22, 2017, the Arbitration Institute of the Stockholm Chamber of Commerce issued a ruling in favor of Naftogaz in all disputable issues regarding the gas supply contract with Gazprom: pricing, "take or pay" clauses and the invalidation of other clauses that are unjustified and contradict the principles of competition.

In particular, the Arbitration Institute of the Stockholm Chamber of Commerce fully rejected Gazprom's retroactive claims for $56 billion under the "take or pay" clause (which imposes an obligation to pay for volumes of gas not used) for 2009-2017. At the same time, future mandatory annual gas purchases from Gazprom have been reduced from 42-52 billion cubic meters to 4-5 billion cubic meters, which meets the actual needs for gas imports.

Naftogaz also achieved a downward revision of gas prices in line with market conditions, as well as overpayment compensation for the periods after April 2014, when Naftogaz initiated the revision of the price. Due to the revision of the contract price, Naftogaz saved $1.8 billion at the expense of gas purchased in 2014-2015.

The arbitrators also stated that Naftogaz should not pay for the volumes of gas supplied to the temporarily occupied territories of Luhansk and Donetsk regions since the volumes of these supplies cannot be determined.

op