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Naftogaz rebuffs ‘impossible’ amicable deal with Gazprom on cases already adjudicated

The company's senior manager believes that the very proposal made by Gazprom "contradicts the essence of amicable agreements"

KIEV, July 20. /TASS/. Naftogaz of Ukraine’s Chief Commercial Officer Yuri Vitrenko says it is impossible to reach an amicable agreement with Gazprom on decisions already handed down by a Stockholm arbitration court. According to the senior manager, only the latest $12 bln lawsuit filed by Kiev earlier this month for the revision of gas transit tariffs, can be settled out of court.

"As we told Gazprom at the trilateral meeting (in Berlin), an amicable agreement on decisions already taken by the arbitration court is not possible," he wrote on Facebook on Friday.

He believes that the very proposal made by Gazprom "contradicts the essence of amicable agreements." "This deal should have been made prior to the final arbitration decision," Vitrenko wrote, adding "it is too late to ask for an amicable agreement on those claims." "Gazprom has to pay $2.6 bln, plus $75 mln worth of interest, and cover enforced collection expenses. Until we receive those funds we will continue the enforced collection by arresting Gazprom’s assets across the world," he vowed, admitting though that the Swedish court of appeal has temporarily suspended the collection procedure in Sweden.

"But apart from the arbitration cases that have already been decided on, we have new arbitration proceedings with Gazprom. They (Gazprom) are demanding to cancel or amend existing contracts, while we want compensation for our losses due to Gazprom failing to fulfill its contractual obligations, particularly considering the arbitration decision. The amount of compensation that we are seeking from Gazprom in those new lawsuits already exceed $12 bln," Vitrenko wrote.

"If Gazprom wants to reach an amicable agreement on those new claims it can pay this compensation to us in an out-of-court settlement," he said, adding that the position of Naftogaz implies that the issue "cannot suspend trilateral transit talks after 2019."

Arbitration dispute

On July 17, a trilateral meeting between representatives of Russia, Ukraine and the European Union was held in Berlin. Following this gas summit, Russian Energy Minister Alexander Novak did not rule out that an amicable agreement could be reached between the companies, adding though that no decisions had been made so far, while the parties had agreed to continue talks in the autumn. In his turn, the Ukrainian Foreign Minister Pavel Klimkin representing the country at the Berlin gas talks said that the option of an amicable agreement is out of the question for Kiev. However, Chief Executive Officer of Naftogaz Andrei Kobolev said the following day that the company was still ready to consider this option unless it hindered the talks on a new agreement after 2019. On the following day, the company’s press service virtually corrected the Naftogaz CEO, saying that the company was only ready to "peacefully receive" the debt from Gazprom.

In February, a Stockholm arbitration court handed down a final decision on the dispute between Gazprom and Naftogaz regarding the contract on gas transit via Ukraine. The court ordered the Russian gas giant to pay $2.6 bln to Naftogaz for the gas shortfall on transit taking into account the Ukrainian company’s debt of $2 bln confirmed earlier by the court. Gazprom challenged those rulings and launched a suit to terminate the contracts with Naftogaz. The Ukrainian company announced a court-ordered forced collection of funds through the arrest of Gazprom’s assets in Switzerland, Britain and the Netherlands. In its turn, Gazprom managed to get the ruling on the enforcement of the transit contract suspended. Sweden’s court of appeal overruled Naftogaz’s objections to the decision.