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Gazprom expects Stockholm Court to bring verdict on Naftogaz before end of April

February 14, 20:49 UTC+3 MOSCOW
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MOSCOW, February 14. /TASS/. Gazprom expects the Stockholm court to bring its verdict regarding the company’s dispute with Naftogaz of Ukraine before the end of April, Gazprom said in a statement on Tuesday.

"The oral hearings took place, the parties submitted their applications on the results of the hearing on November 11, 2016, the rendering of decision by arbitrators is planned before April 30," the company said in the statement.

According to Gazprom, the hearing on revision of terms of gas transit under the claim of Naftogaz also took place.

"The parties presented statements on the results of the hearing on December 22. Rendering of decision by arbitrators is scheduled on June 23," the statement said.

In January, Gazprom notified that the company had drew an invoice for the sum of $5.3 bln to Naftogaz for failing to take gas in the second-fourth quarters under "take or pay" condition. In the first quarter of 2016 the "take-or-pay" was not applied to Naftogaz of Ukraine in accordance with the trilateral "winter package".

Naftogaz of Ukraine said it was not going to pay $5.3 bln to Gazprom until the Stockholm Arbitration Court brings its verdict.

Ukraine has not imported gas under the current contract with Gazprom since November 2015.

Gazprom vs Naftogaz

On June 16, 2014, Gazprom appealed to the Arbitration Institute of the Stockholm Chamber of Commerce with a request for arbitration in order to recover the outstanding debt for natural gas and interest on this debt from Naftogaz Ukraine.

On the same day, Naftogaz Ukraine addressed to arbitration with the requirement of retroactive change in natural gas prices, reimbursement of all overpayments that had been made since May 20, 2011 in the amount of at least $6 bln. On July 21, 2014 the two cases were consolidated.

In October 2014, Naftogaz filed a second lawsuit, demanding to oblige Gazprom to pay compensations worth $3.2 bln for the reduction in transit volumes and $3 billion for a low transit rate. On March 14, Gazprom submitted specified requirements to Naftogaz to the Stockholm International Arbitration. The total amount of claims topped $31.759 bln as it included the payment for not taken volumes of gas in Q3 of 2015. Following the move, Naftogaz said it would raise its claims to Gazprom. The official application of the Ukrainian gas company dated August 2, 2016 says the amount of its claims to Gazprom stands at $26.6 bln.

According to Naftogaz’ consolidated report released on September 30, the Ukrainian side requests a compensation worth $22 bln from Gazprom for overpayment on gas purchases and lost earnings on transit.

In the early July of 2016, head of Business Development department at Naftogaz Yuri Vitrenko said that the total amount of payments that Naftogaz expects to receive from Gazprom on two lawsuits amounts to approximately $50 bln, of which about $ 30 bln is compensation for the gas volumes Ukraine had already bought from Gazprom but overpaid for them.

Vitrenko noted that the amount of the claim of the Russian party to Naftogaz is $31.4 bln.

However, he did not rule out that Gazprom may increase the plaintiff's claims to Naftogaz in the Stockholm Arbitration for another $29.5 bln (because of "take or pay" principle), so the total amount of the claim on the part of Gazprom may exceed $60 bln.

The hearings on the dispute between Naftogaz and Gazprom have been held in the Stockholm Arbitration Court since September 25.

Kiev expects the dispute with Russia’s Gazprom on natural gas purchase contract to be finalized before the end of March 2017 and on the transit contract - before the end of June 2017.

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