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Arbitral panel on Exxon-Russia dispute formed — Russian Finance Ministry

The Russian government intends to firmly protect its interests from Exxon claims in court

© ITAR-TASS/Oleg Savin

MOSCOW, September 16. /TASS/. The arbitral panel consisting of 3 judges for consideration of a dispute between the US Exxon and the Russian Federation over Sakhalin 1 oil and gas project has been formed by the Stockholm Arbitration Court, a representative of the press service of the Russian finance minister told TASS on Wednesday.

"The trial initiated by Exxon’s subsidiary in the Stockholm Arbitration Court, is now in its initial stage. The penal consisting of 3 judges who will consider the case, has been formed," the source said.

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Currently, the attention of the sides is focused on various procedural [preliminary - TASS] matters and the schedule of the process, the ministry’s press service said.

The Russian government intends to firmly protect its interests from Exxon claims in court, he said when answering the question whether an amicable agreement is possible.

The government of the Sakhalin region sticks to a similar view, the source said.

In April, Exxon Mobil lodged a claim to the Stockholm arbitration requiring to change the interpretation of the Sakhalin-1 project Production-Sharing Agreement (PSA) paragraph on taxes. The company believes its subsidiary Exxon Neftegas Limited overpaid approximately $500 mln worth of profit taxes within Sakhalin-1. At the time of the PSA signing in the mid-1990s profit tax of 35% was imposed in Russia while in 2009 it was reduced to 20%, but ExxonMobil continued to pay at the earlier level of 35%. Russia believes that PSA terms are not subject to change within its period of validity.

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