A Stockholm arbitration tribunal handed Naftogaz an unexpected victory this week in a ruling that nullified claims from state-owned Russian gas giant Gazprom that Ukraine owed it $45.7 billion in unpaid gas bills; nearly half of Ukrainian gross domestic product.
Gazprom had filed suit under a 2009 contract signed by former Prime Minister Yulia Tymoshenko, which included a stipulation that Ukraine pay for gas that it did not use, under a so-called “take-or-pay” clause. Gazprom moved for arbitration against Naftogaz in June 2014, demanding that Ukraine pay for the extra gas as well as interest on the payment.
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Naftogaz CEO Andriy Kobolyev celebrated the ruling in a Facebook post that played the Queen song “We Are The Champions.”
Now that Gazprom’s legal challenge has been vanquished, Kobolyev and his management team have no procedural obstacles to unbundling Naftogaz and turning the state-owned hydrocarbon monopoly into separate, competing companies, creating an open, European gas market here as a goal.
Politically, it remains unclear how that will proceed. But European Bank of Reconstruction and Development’s regional managing director, Francis Malige, said that the ruling would “enable the company to move forward on restructuring,” and that “the time to move on unbundling is now.”
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