You're reading: Naftogaz loses potential $3.9 billion case against Italian gas trader

The Stockholm Arbitration Court has ordered Ukrainian national oil and gas company Naftogaz to honor a contract with Italian gas trader Italia Ukraina Gas S.p.a. dated December 24, 2003 and supply it with 13.1 billion cubic meters of gas in 2003 prices at $110 per thousand cu m, the Kommersant-Ukraine newspaper said.

The paper said the court order, dated December 19, 2012, could cost Naftogaz $3.9 billion.

The court also ordered the company to pay the trader a fine of $12.7 million for delayed supplies.

The contract with Italia Ukraina Gas, signed by Naftogaz’s then deputy CEO Ihor Voronin, stated that the company would supply up to 1.3 bcm of gas per year in 2004-2013, inclusive.

Kommersant-Ukraine said Naftogaz lost a first arbitration suit against the Italian trader in 2010, when it was ordered to pay $200 million damages. Naftogaz filed an appeal against that ruling.

Naftogaz is not commenting on the report.

Naftogaz in January 2011 hired White&Case LLP to draft an appeal with Sweden’s Svea Court of Appeal against a separate Stockholm arbitral ruling related to the dispute with Italia Ukraina Gas.