Stockholm arbitration rejects “take or pay” condition against Ukraine

Stockholm arbitration rejects Gazprom’s “take or pay” condition against Ukraine

Monitoring Desk: The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has cancelled the ban on gas re-export for Ukraine and granted a full victory to the Ukrainian oil and gas company “Naftohaz Ukrayiny” challenging the fairness of the “take or pay” clause forced on Ukraine under the Gas Sales Contract with Russia’s “Gazprom” of 2009.

According to Ukranian media, the Arbitration Institute released the May, 31, 2017.

According to media, the court also upheld demand of Naftohaz to have the price revised with regard to market conditions.

While welcoming the decision, the President of Ukraine Petro Poroshenko said:

“In accordance with aforementioned decision, the “take-or-pay” claim was cancelled, and the motion of Gazprom to pay for gas on this grounds was rejected. “This was a principle, which Russia imposed on Ukraine and Ukrainian negotiators irresponsibly agreed with in 2009. As a result, millions of Ukrainians were robbed of billions of dollars”.

By 29 May, 2017, the monetary compensation claims under the sale and purchase contract and the transit contract between “Naftohaz Ukrayiny” and “Gazprom” have amounted to 30.3bn dollars, Gazrom’s claims to the Ukrainian company – 47.1bn dollars.