International arbitration News, analytics and practice

21May/10Off

RosUkrEnergo is demanding the Stockholm Arbitration that Naftohaz Ukrainy compensate some USD 5.4 billion of losses

RosUkrEnergo (Switzerland) is demanding the Arbitration Institute of the Stockholm Chamber of Commerce that Naftohaz Ukrainy national joint-stock company compensate some USD 5.4 billion of losses for withdrawal of 11 billion cubic meters of gas stored in the Ukrainian repositories, RosUkrEnergo press secretary Andrii Knutov has informed Ukrainian News.

In his words the arbitration court opened hearings within the framework of consideration the dispute between RosUkrEnergo and the national oil and gas company.

At the hearing they considered interrelationship of the sides in 2009, namely the withdrawal of 11 billion cubic meters of gas by Naftohaz Ukrainy from RosUkrEnergo in the Ukrainian underground repositories.

"Our company confirmed claims it previously mounted to the Ukrainian side to compensate the damages with money. The claims total about five point four billion dollars," he said.

According to the proceedings schedule, the Stockholm arbitration will produce an award before August 2010.

As Ukrainian News earlier reported, according to Supplement No. 1 to the contract for natural gas transit Naftohaz Ukrainy and Gazprom signed on January 19 and which was published in the mass media, Gazprom was entitled to advance payment of up to USD 1.7 billion in January or February 2009 for natural gas transit in 2009 and 2010.

Naftohaz Ukrainy undertook to use this money and pay for assigned receivables from Gazprom and its subsidiaries and affiliated companies to RosUkrEnergo.

Gazprom later confirmed that Naftohaz Ukrainy could demand RosUkrEnergo to pay its debt of USD 1.7 billion in currency or with natural gas.

As a result, the State Customs Service cleared customs for 11 billion cubic meters of natural gas for Naftohaz Ukrainy basing on the document signed.

Businessman Dmytro Firtash, a co-owner of RosUkrEnergo, expects the Arbitration Institute of the Stockholm Chamber of Commerce to award a decision in the dispute between the Naftohaz Ukrainy national oil and gas company and RosUkrEnergo on 11 billion cubic meters of natural gas by July 2010.

In early 2010, the arbitration institute of the Stockholm Chamber of Commerce, Sweden, passed a preliminary decision to order Naftohaz Ukrainy national joint-stock company return USD 197 million to RosUkrEnergo (Switzerland) in frames of a dispute between the companies concerning realization of contracts for sale, purchase, transit and storage of gas.

Ukrainian News Agency