Swedish court docket rejects attraction by Russia’s Gazprom in fuel transit dispute with Ukraine’s Naftogaz

Sweden’s Svea Court docket of Attraction on Wednesday upheld an earlier arbitration resolution forcing Russian power main Gazprom to pay Ukraine’s Naftogaz $ 2.56 billion in an ongoing fuel transit dispute.

“At this time’s resolution signifies that the court docket has rejected Gazprom’s declare, and the choice of the arbitration can’t be canceled. Aside from that, the court docket has not detected any procedural violations,” mentioned the ruling. It has famous that the choice can’t be appealed.

The prevailing settlement for Russian fuel transit via Ukraine to Europe expires subsequent 12 months, however the talks have stalled. Final week, Gazprom provided to increase the prevailing settlement or signal a brand new deal for one 12 months, bearing in mind the forecast for the European Union’s fuel demand.

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Naftogaz desires the Russian firm to pay the cash awarded by the arbitration earlier than any deal is reached.

Following the Swedish court docket resolution, Kremlin spokesman Dmitry Peskov mentioned on Wednesday that “Naftogaz ought to formalize a brand new construction and conduct all needed procedures after the unbundling, and it’s also essential to allocate needed volumes.”

“All this takes time, and there’s nonetheless time, however it’s operating out,” Peskov specified, noting that whereas work was underway, it was not doable to disclose any particulars of negotiations.

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Gazprom and Naftogaz have been litigating over fuel provides and transit contracts with the Arbitration Institute of the Stockholm Chamber of Commerce since 2014.

Gazprom is demanding greater than $ 37 billion from the Ukrainian firm for decreasing fuel transit beneath the take-or-pay clause for 2012-2016, fee for fuel equipped in Might-June 2014 and different fuel money owed.

Naftogaz pushed for a retroactive change within the value of fuel, the reimbursement of overpayments and the repeal of a ban on reselling Russian fuel.

The court docket ultimately happy a few of the Ukrainian firm’s calls for, particularly by setting a minimal quantity of fuel that Naftogaz should purchase from Gazprom yearly (from 2018) at a quantity that was 10 instances decrease than within the unique contract. On the identical time, it additionally obliged Gazprom to pay for the transit of the Russian fuel via the Ukrainian territory between 2009 and 2017 although the fuel was not, actually, transited over that interval.

The court docket justified its resolution by referring to a tough financial state of affairs in Ukraine.

The Head of Gazprom, Alexei Miller, then referred to as the court docket’s resolution “uneven” and “very politically motivated.” 

On Monday, Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky mentioned by phone the upcoming trilateral fuel talks between Ukraine, Russia and the European Union.

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