Khoroshkovsky: Ukraine may lose case on Russian gas contracts if it appeals to international arbitration court

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March 24, 2012, 11:56 a.m. | Politics — by Interfax-Ukraine
Ukrainian First Deputy Prime Minister Valeriy Khoroshkovsky has said that Ukraine, if it appeals to an international arbitration court regarding the unfairness of gas contracts with Russia, may lose the case. "If a primary legal analysis tells you about it, then it's probably stupid to appeal [to court] and lose [the case]. We know perfectly well what will happen. We analyzed all situations," he said on the Shuster Live program late on Friday, when asked when Ukraine will turn to an international arbitration court over the gas contracts.

He added that a"high and unfair price stimulates energy saving, the adoption of a tough position, and the competitiveness of our products."

Khoroshkovsky said that Ukraine still relies on a fair gas price. And the only way that can currently protect Ukraine from a disadvantageous contract is to reduce the amount of gas imports and switch to its own coal, while reducing gas consumption, he said.

"Although this is a partial violation of the 'take or pay' principle, but in this case it's a lesser violation," Khoroshkovsky said.
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CHRIS BABEOUF March 24, 2012, 12:07 p.m.    

The Ukrainian government voluntarily signed up to a contract to buy a commodity (gas) off a Russian seller at a given price. The ability of the government of Ukraine to wriggle free of that contract now will depend on how tightly it was drawn up. I'll guess and say that it was water tight(because of the previous trouble that the Russian seller had with this particular customer). So its either repudiation of the contract by Ukraine irrespective of its legal status. Or getting the Russian supplier to agree to a new contract. Or keep paying the old price. As of now this choice has narrowed down to two. Repudiation or keep paying the old price.

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