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Gazprom manages to suspend enforcement of court decision on Naftogaz transit contract

June 14, 14:48 UTC+3

Earlier Gazprom was informed that Naftogaz of Ukraine was taking action in Switzerland to enforce the decision of the Stockholm Arbitration in the dispute over gas transit contract

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© Igor Kubedinov/TASS

MOSCOW, June 14. /TASS/. The Svea Court of Appeal in Sweden upheld Gazprom’s appeal on June 13, deciding to suspend enforcement of the Stockholm Arbitration dated February 28, 2018 on the dispute between Gazprom and Naftogaz regarding the contract on gas transit via Ukraine, Russia’s gas producer said in a statement on Thursday.

Gazprom filed an appeal on June 7, 2018 against actions of court bailiffs for company’s assets seizure by Naftogaz of Ukraine.

"The Court of Appeal agreed that there are reasonable grounds for suspending enforcement of the Stockholm Arbitration ruling. The judgement particularly deprives Naftogaz of Ukraine of the grounds for attempted arrest of Gazprom overseas assets. Gazprom will use this fact when appealing against the actions of court bailiffs in Switzerland and the Netherlands," the statement said.

On February 28, 2018, the Stockholm Arbitration court handed down a final decision on the dispute between Gazprom and Naftogaz regarding the contract on gas transit via Ukraine.

On March 29, 2018, Gazprom challenged the ruling of the Stockholm Arbitration in the Svea County Court of Appeal and demanded its partial reversal citing serious procedural violations. On May 28, 2018, Gazprom submitted an appeal to the court to fully overturn the arbitration ruling.

At the end of May, Gazprom was informed that Naftogaz of Ukraine was taking action in Switzerland to enforce the decision of the Stockholm Arbitration in the dispute over gas transit contract.

On June 7, Gazprom filed an appeal to the Swiss court a petition to the Swiss court, aimed at providing it with full access to case materials and subsequent appeal against actions of court bailiffs. A similar statement is planned to be sent to the Dutch court.

On June 5, Naftogaz of Ukraine said that the Dutch court had upheld its petition on seizure of Gazprom shares in its Dutch subsidiaries and the debt of those subsidiaries. According to Naftogaz, 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.

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 bln 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 bln cubic meters per year). The Russian company should also pay $2.56 bln to Naftogaz for the shortfall in transit volumes.

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

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