The National Joint Stock Company “Naftogaz of Ukraine” has announced its victory over the Russian company “Gazprom” in international arbitration. The decision was made by the arbitration tribunal that heard the case in Switzerland.
This is reported by Kyiv24
The Essence of the Dispute and the Arbitration Decision
Chairman of the Board of “Naftogaz” Serhiy Koretsky reported that the tribunal ordered “Gazprom” to pay the Ukrainian company 1.37 billion dollars. The arbitration proceedings were initiated due to “Gazprom’s” refusal to fulfill contractual obligations under the take or pay principle, which it violated starting in May 2022 by ceasing necessary payments.
Details of the Process and Next Steps
In September 2022, “Naftogaz” initiated arbitration proceedings against “Gazprom”. Meanwhile, the Russian company attempted to block the consideration of this case through the courts of the Russian Federation. However, the arbitration tribunal, which included arbitrators from Sweden, Switzerland, and Israel, fully sided with the Ukrainian party.
“The international arbitration tribunal that heard the case in Switzerland ordered “Gazprom” to pay 1.37 billion dollars to the benefit of NJSC “Naftogaz”. Since May 2022, “Gazprom” has violated its contractual obligations under the take or pay principle by halting payments,” said the head of the Ukrainian company regarding the essence of the claims against “Gazprom”.
Serhiy Koretsky emphasized the importance of this victory and thanked the team of lawyers at “Naftogaz” and the legal advisors from Wikborg Rein. According to Koretsky, the next step will be to ensure the enforcement of the arbitration decision.
For reference: the take-or-pay principle means that the buyer is obligated to pay for a certain volume of gas or its transit regardless of actual consumption or transportation.