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Court seizes Dutch assets of Gazprom worth $2.6 bln upholding Naftogaz petition

Naftogaz notes that the petitions were filed to secure its right to receive from Gazprom $2.6 billion under the decision of the Stockholm Arbitration, adopted in February 2018

MOSCOW, June 5. /TASS/. The Stockholm Arbitration Court has upheld the petition of Naftogaz of Ukraine demanding to seize the shares of Gazprom in its Dutch subsidiaries and the debt of these subsidiaries, Naftogaz said in a press release.

Naftogaz notes that the petitions were filed to secure its right to receive from Gazprom $2.6 billion under the decision of the Stockholm Arbitration, adopted in February 2018.

"The Dutch court upheld these petitions, but six of the seven subsidiaries of Gazprom in the Netherlands refused to cooperate with judicial executors," according to the press release.

At the same time, the Ukrainian company notes that this "does not affect the seizure."

According to CEO of the Ukrainian company Andrei Kobolev "all available legal means and tools will be used for execution of the verdict and receiving the required sum from Gazprom."

On May 30, Ukraine’s President Pyotr Poroshenko said that the enforcement against Gazprom in Switzerland, the UK and the Netherlands had been initiated already within the framework of arbitration proceedings enforcement.

Naftogaz’ commercial director Yuri Vitrenko said that within this year he is determined to recover $2.6 bln from Gazprom as part of the arbitration disputes.

Earlier two independent sources told TASS that last week the Swiss bailiffs visited the office of the Nord Stream company in the canton of Zug in Switzerland as part of execution of the decision of Stockholm Arbitration. Gazprom noted that it had not received an official notification about the start of enforcement of the decision of the Stockholm court’s verdict.

Gas dispute

Gazprom and Naftogaz of Ukraine plunged into a litigation over gas supplies and transit contracts with the Arbitration Institute of the Stockholm Chamber of Commerce back in 2014.

Gazprom is demanding more than $37 bln from the Ukrainian company for gas under the take-or-pay clause for 2012-2016, for the payment for gas supplied in May-June 2014 and gas debts.

In December 2017, the court ordered Naftogaz to pay Gazprom $2 bln for the deliveries, but reduced the annual contractual volume of purchases to 5 billion cubic meters. At the same time, the "take or pay" condition was preserved for 80% of this volume. This condition will be effective only in 2018.

As for the gas transit contract, in February 2018, the Stockholm court ruled that Gazprom’s obligation will remain (110 billion cubic meters per year). The Russian company should also pay $2.56 bln to Naftogaz for the shortfall in transit volumes.

In March, Gazprom returned Naftogaz prepayment for the March deliveries and notified the Ukrainian company that it was going to start the procedure of termination of contracts. This procedure can take 1.5-2 years.

Gazprom CEO Alexei Miller noted that, guided by double standards, the Stockholm court took asymmetric decisions, which significantly violated the balance of interests of the parties under the agreements.

In April, Naftogaz announced that it was starting the procedure for compulsory execution of the Stockholm court's decision on the dispute with Gazprom in Europe and was preparing a new claim demanding compensation for losses caused by non-execution of the arbitration decisions by Gazprom.

In late May, Gazprom send an application for complete reversal of the decision taken by the Stockholm Arbitration in the dispute between Gazprom and Naftogaz of Ukraine over the gas transit contract to the Svea Court of Appeal.

"An extra examination of the text of the decision with engagement of a globally recognized expert linguist showed that a considerable portion of the arbitration award was written by another person, rather than by arbitrators. Obviously, nobody has a right to substitute arbitrators. Direct decision-making by arbitrators is of critical significance for parties to the dispute and interference of a third person in the decision-making process is a gross violation of the arbitration agreement," Gazprom said.

The conclusion of the expert linguist on the authorship of the arbitration decision on transit is a new evidence of serious violations of the Swedish law and arbitration regulations of the Stockholm Chamber of Commerce in consideration of this case, providing grounds for its complete reversal, Gazprom noted.