Gazprom complained to Swedish court in Sweden

The company appealed against the decision of Stockholm Arbitration under the contract for the supply of gas to Ukraine in the court of Sweden.
"Gazprom" filed a lawsuit in the Swedish state court in an attempt to challenge the decision of the Stockholm Arbitration in a dispute with Naftogaz of Ukraine under a contract for the purchase of gas. Gazprom in particular wants to challenge the arbitration award that in 2012-2017, Naftogaz did not have any obligations to take-or-pay, as well as the principles by which the arbitration set a new contract price based on the cost of gas in Germany. Monopoly has already stated that it intends to challenge both arbitration awards under contracts for the purchase and transit of gas, and also starts a new trial to terminate these contracts.

On March 21, Gazprom filed an application to the Svea County Court of Appeal for a partial cancellation of the final decision on arbitration with Naftogaz of Ukraine under a gas supply contract, the company said on Thursday. The final decision on this dispute was taken on December 22, 2017, and before that, in May 2017, an interim decision was passed - it is also disputed by Gazprom in the state court of Sweden, the lawsuit was filed on November 7.

"Since the final decision of the arbitrators on this dispute is based on the same conclusions as the previous separate arbitral award decision, the petition was filed on similar grounds, namely, because the arbitrators exceeded their authority in making judgments and serious procedural errors committed by them, - the company said in a statement.

Gazprom never officially said which aspects of the arbitration decision he disputes. According to Kommersant, first of all the company does not agree with the findings of the arbitration that in 2012-2017, Naftogaz did not have any obligations under the take-or-pay condition. Note that since 2018, arbitration has established Naftogaz such obligations in the amount of 80% of the volume of the contract, that is, 4 billion cubic meters. According to Kommersant's interlocutors in Gazprom, arbitration could reduce Naftogaz's take-or-pay obligations in 2012-2017 on the basis that gas consumption in Ukraine fell sharply (such a decision would be in line with the decisions in other arbitrations of Gazprom with its customers in Europe). But the complete cancellation of take-or-pay is completely unjustified and destroys the balance of interests of the parties in the contract, because from Gazprom in those same years, no one removed the obligation to supply contractual daily volumes based on the contract volume of 52 billion cubic meters, which the company did , including in 2014-2015.

Another aspect that, according to Kommersant, Gazprom is not happy with, is the principle of setting a new price in the contract. The arbitrage decided that the price instead of the previously existing petroleum product formula should now be based on the quotations of the NCG hub in Germany. Against this, Gazprom did not fundamentally object, since in 2015-2017, Naftogaz bought a significant amount of gas in Europe based on this pricing. However, according to the company, the price should be formed, as in the case of reverse supplies to Ukraine from Europe, on the formula "the price of the hub plus transportation." Arbitration attached the price for Ukraine to the German hub directly, although in reality, Naftogaz now does not have any opportunity to get gas from Europe at the price of a German hub.

It is noteworthy, however, that in December 2017, Gazprom's deputy chairman of the board, Alexander Medvedev, said that the company was satisfied with the final decision of the Stockholm Arbitration under the gas supply contract and was not going to challenge it. According to this decision, Naftogaz had to pay Gazprom $ 2 billion. At that time, Gazprom had already filed a lawsuit challenging the interim arbitration award. At that time, the company could not explain to Kommersant how these approaches are combined, but Kommersant's interlocutors noted that Gazprom is not going to file new claims, as the company as a whole is happy with everything. The situation changed dramatically only after the arbitration decision on the transit contract, when the balance of payments for both claims shifted in favor of Naftogaz (should receive $ 2.7 billion from Gazprom).

Gazprom has already stated that it intends to challenge in court Sweden and the arbitration award on transit, and also began the procedure for the termination of both contracts with Naftogaz. This procedure will also take place in the Stockholm Arbitration, but with a different composition of arbitrators, and may take, according to Gazprom, a half or two years. Recall, both contracts expire on December 31, 2019.