Stockholm Tribunal declines to review Naftogaz's gas transit contract with Gazprom

The Arbitration Institute of the Stockholm Chamber of Commerce has declined to review a gas transit contract between NJSC Naftogaz of Ukraine and Russia's gas monopoly Gazprom, including the review of rates on Russian gas transit shipments via Ukraine's territory.

"The Tribunal did not grant Naftogaz's claim for revision of the transit tariff, because Naftogaz's 2009 request for revision did not fulfill the procedural requirements. The Tribunal also did not accept Naftogaz's claims for revision of the transit contract based on European and Ukrainian energy and competition law, noting that the implementation of regulatory reform on Ukrainian territory is a task for the Ukrainian authorities, going beyond the Tribunal's powers in this case," the Ukrainian company's press service said.

Read alsoNo progress yet in gas purchase talks with Gazprom: Kobolyev"The transit contract will now need to be revised, taking into account the award and the requirements of European and Ukrainian law. Naftogaz intends to suggest negotiations with Gazprom to this effect soon. Following the award, Naftogaz expects related gas market reform in Ukraine to continue at an accelerated speed," the press service quoted Naftogaz CEO Andriy Kobolyev as saying.

As UNIAN reported earlier, the Arbitration Institute of the Stockholm Chamber of Commerce has considered the claims filed by Naftogaz on behalf of Ukraine against Russia's gas giant Gazprom regarding the transit of Russian gas to the EU through Ukraine and the purchase of Russian gas by Ukraine.

On December 22, Naftogaz received the final award of the Arbitration Institute of the Stockholm Chamber of Commerce related to the contract for purchases by Ukraine of Russian natural gas. Thus, the court satisfied a number of demands of the Ukrainian side, including a reduction in the gas purchase price in the second quarter of 2014 to $352 per 1,000 cubic meters. It also rejected Russia's Gazprom take-or-pay claims amounting to $56 billion. As not all the demands of the Ukrainian side were satisfied, Naftogaz was left owing Gazprom some $2 billion.

The second ruling concerned the contract for transit shipments of Russian gas via Ukraine, which was signed in 2009. According to the deal, Gazprom was to transport 110 billion cubic meters of gas per year via Ukraine. Since the condition had not been met, Naftogaz demanded that the court recover $16 billion in compensation from the Russian company in this litigation. The Arbitration ruled that Gazprom should pay Naftogaz $4.63 billion in compensation for the past periods.