Gazprom is demanding that the Stockholm arbitration decision that calls for fining the Russian gas giant nearly $5 billion following a dispute over a transit contract with Naftogaz be cancelled, arguing that a third party interfered in the decision-making process.
"Additional study of the text of the ruling by internationally acknowledged linguistic experts show that a significant portion of the text of the arbitration ruling was not written by the arbiter but by some other person,” read a statement issued by Gazprom, according reporting by RIA Novosti. Gazprom filed an appeal in Sweden's Svea Court of Appeals on Monday.
The company stressed that any substitution of the arbitrators is unacceptable.
“Clearly, no one has the right to replace the arbiters. The direct pronouncement of the ruling by the arbiters has extraordinarily great importance for the parties to the dispute, and interference by outside persons in the process of rendering the decision is a blatant violation of the arbitration agreement,” read Gazprom’s statement.
After a three-year dispute between Gazprom and Ukraine’s Naftogaz, Stockholm Arbitration ordered the former to pay Naftogaz $4.673 billion as compensation for what it deemed as being insufficient transit of gas from 2009 to 2017. The ruling also called for Naftogaz to pay Gazprom roughly $2 billion, bringing Gazprom’s net fine to about $2.56 billion.
Gazprom’s disagreement with the decision has caused it to begin terminating what is a 10-year transit contract, which had been signed between Gazprom and Naftogaz in January 2009. Ukrainian officials believe the contract cannot be terminated unilaterally.
Gazprom has said it will defend its rights by all means because it believes the decision of Stockholm Arbitration was guided by double standards.
"The linguistic expert's conclusion concerning the authorship of the arbitration ruling on transit is fresh proof of serious violations of Swedish law and the arbitration rules of the Arbitration Institute of the Stockholm Chamber of Commerce in examining this case, which gives grounds for its complete cancellation.”
“Gazprom and the Russian side have raised doubts about objectivity regarding procedural violations, and the situation is twofold,” said Kira Sazonova, an Associate Professor of the department of state and legal disciplines at the Institute of Public Administration and Management (IGSU) RANHiGS, according to Radio Sputnik.
“On the one hand, the Russian side has filed very serious charges stating that a significant part of the decree was not written by an arbitrator,” she said. “However, we have to understand that the process is very politicized, and there has been observed sympathy from Western referees to our Ukrainian partners.”
Sazonova said that although the Gazprom’s appeal could result in the arbitrary body to cancel its decision, Russia’s opponents will not give up easily.
According to the agreement, the world’s largest gas producer was supposed to deliver 40 bcm of gas in 2009 and 52 bcm, starting from 2010 under “take or pay” condition that obliges Naftogaz to annually pay the minimum amount of gas. However, Kiev has bought no Russian gas since November 2015, replacing it with reverse gas from Europe.
When Gazprom billed Naftogaz $5.3 billion for gas that the Ukrainian side did not select from the second-fourth quarters of 2016, the Ukrainian Antimonopoly Committee accused Gazprom of abusing its monopoly position on the gas transit market and sued for the amount of about $6.4 billion.
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