London court froze British assets of Gazprom at the suit of Naftogaz

The assets of the Russian company in the UK are frozen to ensure the decision of the Stockholm Arbitration on the payment of "Naftogaz" 2.6 billion dollars.
Origin source
The Commercial Court of London authorized the freezing of assets of Russian Gazprom in the territory of Great Britain in the framework of the implementation of the decision of the Stockholm Arbitration under the lawsuit of Naftogaz of Ukraine. This was reported on Tuesday, June 19, by the press office of the Ukrainian company.

"Yesterday, at the request of Naftogaz, the London Commercial Court issued an order to freeze (assets) against Gazprom in the framework of securing compliance with the Stockholm arbitration award," the statement said (quoted by TASS).

The assets of the Russian company in the UK are frozen to secure a decision by the Stockholm Arbitration to pay Naftogaz $ 2.6 billion. Within 48 hours of receiving the court order, Gazprom must provide Naftogaz with a list of its assets located in England and Wales. The cost of these assets, assured in Naftogaz, exceeds $ 50,000.

The court can give Gazprom more time to compile this list. "However, if Gazprom refuses to comply, fines or other sanctions can be expected," the Ukrainian company said.

In December 2017 and in February 2018, the arbitration institute of the Stockholm Chamber of Commerce ruled on two disputes between Ukrainian Naftogaz and Russian Gazprom. In general, the Stockholm arbitration granted the demands of the Ukrainian company, obliging the Russian monopolist to pay $ 4.63 billion for gas shortage under the transit agreement. Under the counter requirements, the amount was reduced to $ 2.56 billion.

Requirements of Naftogaz to increase the tariff for transit of gas the court rejected. Two arbitration disputes between Gazprom and Naftogaz continued in the Stockholm Arbitration for several years. The court in one case - about debts for gas - from June 2014 to December 2017. The court for another - under the contract for transit - from October 2014 to February 2018.

Gazprom did not agree with the court's decision, seeing in it an imbalance in favor of Kiev. "We are categorically opposed to Ukraine's economic problems being solved at our expense. In such a situation, the continuation of contracts for Gazprom is economically inexpedient and unprofitable, "- said then the head of the Russian monopoly, Alexei Miller.

In early March 2018, Gazprom began the procedure for the termination of contracts with Naftogaz for the supply and transit of gas. As Miller explained March 13 at a meeting with Prime Minister Dmitry Medvedev, such a step is necessary to avoid future fines for transit through Ukraine in the amount of less than 110 billion cubic meters. m per year.

Also in March, Gazprom appealed against the decisions of the Stockholm Arbitration Court in disputes with Naftogaz in the Swedish court.

The chairman of the board of Naftogaz Andrey Kobolev promised to use all available legal means and tools to achieve fulfillment of the decision and to receive from Gazprom the amount awarded.

In May 2018, Naftogaz initiated a procedure of compulsory recovery in arbitration proceedings in the Swiss court. On May 29, Nord Stream 2 AG, the operator of the Nord Stream-2 gas pipeline project from Russia to Germany, received a resolution to impose interim measures within the framework of the collection of funds from Gazprom on the suit of Naftogaz Ukrainy. The representative of the Swiss company, whose 100% shareholder is Gazprom, assured then that the decision would not have an impact on the implementation of the Nord Stream-2 project.

In early June, a court in the Netherlands arrested Dutch assets of Gazprom as part of the implementation of the decision of Stockholm Arbitration in February 2018. The shares of the Russian gas monopoly in its subsidiaries and the debts of these subsidiaries in the Netherlands were arrested.

Six of the seven subsidiaries of Gazprom in the Netherlands refused to cooperate with judicial executors.

On June 13, the Swedish Court of Appeal suspended the procedure for executing the Stockholm arbitration award at the request of Gazprom. "Naftogaz of Ukraine" regarded the decision of the Court of Appeal as a temporary suspension of the company's further actions on the recovery of $ 2.6 billion from Gazprom. In Kiev, they expressed the hope that this decision will not cancel the arbitration decisions and will not allow Gazprom to claim from Naftogaz a refund of $ 2.1 billion already taken into account by the arbitrator's decision as compensation.

London court allowed to freeze assets of Gazprom at the request of Naftogaz
Vedomosti, June 19, 2018

The Commercial Court of London today allowed the freezing of Gazprom assets in the UK at the request of Naftogaz of Ukraine, Interfax-Ukraine reported, citing the press service of Naftogaz. According to the company, the court decision was made in the interests of securing the decision of the Stockholm Arbitration to recover from Gazprom $ 2.6 billion in favor of the Ukrainian company under the transit contract.

According to the decision of the English court, Gazprom within 48 hours after receiving the decision must provide Naftogaz with a list of all its assets worth more than $ 50,000 located in England or Wales. "Naftogaz" notified the London offices of 17 banks engaged in business with Gazprom, that they can not contribute to reducing the assets of Gazprom in the UK, the press service of the Ukrainian concern said.

The actions of Naftogaz in the British courts contradict the order of the District Court of Appeals of Sweden to suspend execution of the arbitration award, Gazprom said today.

The proceedings of Gazprom and Naftogaz in Stockholm on contracts for the transit and supply of gas to Ukraine lasted from 2014. In the amount of two decisions, the arbitration ordered the Russian company to pay the Ukrainian about $ 2.6 billion in fine and during 2018-2019. To pump through Ukraine not less than 110 billion cubic meters. m annually (transit fees - $ 2.35 billion per year). The decision was taken on 28 February and entered into force on the same day. Gazprom filed appeals against both decisions and initiated the early termination of both agreements.

On May 29, on the initiative of Naftogaz, the process of forcible collection of $ 2.6 billion from Gazprom began. "In order to receive $ 2.6 billion that Gazprom refuses to pay us, the best lawyers in the world have arrested [Gazprom's] assets in Britain, the Netherlands, the United States," Ukrainian President Petro Poroshenko said on June 8.

On June 13, the Svea County Court of Appeal suspended execution of the Stockholm arbitration award. The court reasoned this by the fact that Gazprom appealed the arbitration award, as well as "attempts by Naftogaz to consider the complaint on its merits, in essence, to initiate a procedure for the enforcement of this decision in various jurisdictions," Gazprom said in a statement.

Naftogaz reported that the decision of the appellate court meant only a temporary suspension of further actions of Naftogaz on the procedure for recovering $ 2.6 billion from Gazprom and did not lead to the cancellation of arbitration awards.