News

04-10-2016

“Fair price” is a rather abstract category, which is why Naftogaz has to present maximum possible quantity of evidence proving the violation of obligations by Gazprom – says Counsel of Spenser & Kauffmann Law Firm

On October 10, oral hearings in the proceedings between Naftogaz and Gazprom are expected to finish at the Arbitration Institute of the Stockholm Chamber of Commerce. Both parties brought significant claims against each other: Naftogaz’s claims total $ 27 billion and those of Gazprom are equal to nearly $ 32 billion.

The chances of Naftogaz to succeed in this litigation have been analyzed for the Novoie Vremia newspaper by Volodymyr Yaremko, Counsel at Spenser & Kauffmann, Attorneys at Law

He recalled an example of the recent litigation between Gazprom and Lithuania, drawing attention to the complexity and unpredictable nature of such category of disputes. “The dispute decided in June 2016 was over compensation by Gazprom of the overpayment in the amount of $ 1.4 billion made by Lithuania for the supplied natural gas. Lithuania lost the case as the arbitration tribunal had found no violations in the actions of Gazprom – said V. Yaremko. – In the context of the defense presented by Naftogaz, it is also important that in this case the arbitration tribunal paid attention to the fact that “fair price” is a rather abstract category, which has become one of the key aspects of this lawsuit.”

V. Yaremko noted that European Commission supports Ukraine in terms of harmonization of its energy legislation with the EU law. “Naftogaz’s claims in the pending arbitration are aimed at complying with the requirements of the Third Energy Package, which may consequently positively affect Naftogaz,” he assumed.

However, the lawyer believes that Ukrainian party should present its legal position in the most efficient way and provide maximum possible quantity of evidence proving the violation of obligations by Gazprom. “While evaluating the existing situation, an outcome of the litigation will depend on a lot of factors, including even the expertise of arbitrators who will hear the dispute. At this stage, it is too early to make any positive predictions of the outcome of this litigation,” expresses his belief V. Yaremko.