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Swedish Court of Appeal upholds arbitration ruling in Gazprom-Naftogaz dispute

Svea Court of Appeal’s judgment cannot be appealed; awards in two more cases between the parties will be made in 2020
Naftogaz headquarters in Kiev REUTERS/Valentyn Ogirenko
Naftogaz headquarters in Kiev
© REUTERS/Valentyn Ogirenko

STOCKHOLM, November 27. /TASS/. The Svea Court of Appeal in Sweden has dismissed Gazprom’s claim filed to challenge the decision of the Stockholm Arbitration Tribunal in a dispute between the Russian company and Naftogaz of Ukraine on gas supplies to Ukraine, the Court of Appeal said in a press release on Wednesday.

"Svea Court of Appeal has today announced its judgment in a case regarding the setting aside of a separate arbitral award between a Russian company and a Ukrainian company. According to the judgment, the claim of the Russian company is dismissed. Two more cases between the same parties are expected to be decided in 2020," the court said in the press release.

"In the arbitration proceedings concerning the supply agreement there were i.a. claims for payment and claims for invalidity or replacement of certain contractual clauses. The arbitral tribunal did not rule in favor of Gazprom regarding these issues. In the proceedings before the Court of Appeal, Gazprom claimed that two declarations regarding these issues in the separate award should be set aside," the court explained.

According to the press release, Gazprom claimed that the arbitral tribunal had committed several errors, which should result in the award being set aside.

"Gazprom claimed i.a. that the arbitral tribunal had exceeded the scope of its authority in its assessment of the parties’ requests as regards the annual contract volume of natural gas that should apply to the contract. Naftogaz claimed that Gazprom’s claims should be dismissed, since no errors had been committed by the arbitral tribunal," the court informed.

According to today’s judgment, Gazprom’s claim is dismissed. Therefore, the separate arbitral award is not set aside. The Court of Appeal stated that in its assessment of the case, it did not find that the arbitral tribunal committed any error during the arbitration proceedings.

Svea Court of Appeal’s judgment cannot be appealed.

Legal disputes

The legal disputes between Gazprom and Naftogaz of Ukraine on gas supply and transit have been ongoing since 2014. In February 2018, the Stockholm Arbitration Court ordered the Russian company to pay about $2.56 billion to the Ukrainian company for the shortfall in transit volumes.

In the summer of 2018, Naftogaz began the process of forcibly recovering this amount from Gazprom through the seizure of the assets of a Russian holding in Switzerland, the UK and the Netherlands. The Svea Court of Appeal in Sweden suspended the execution of the Stockholm arbitration ruling, but this measure was later canceled.