13 Jun 2024 12:30

Uniper breaks contract with Gazprom after Stockholm arbitrage tribunal ruling

MOSCOW. June 13 (Interfax) - Uniper has decided to terminate its long-term contract with Gazprom Export after the Stockholm arbitration ruling in its favor, the German company reported.

The arbitration tribunal in Stockholm ruled on June 7, granting Uniper the right to terminate its contracts, and also awarded it over 13 billion euros in compensation for gas volumes not supplied by Gazprom Export since mid-2022. The process was governed by Swiss law. The arbitration decision is legally binding and final, the German company said.

Gas supplies to Germany were reduced due to Canadian sanctions, making it impossible to continue the operation of the Nord Stream gas pipeline, which was later blown up by saboteurs.

Uniper claims that to compensate for the loss of volumes, it purchased gas on the spot market. In addition, prices soared to almost $4,000 per thousand cubic meters in mid-2022, ten times higher than current prices. The company was nationalized in order to cover the losses generated by these purchases.

Any proceeds received after the Stockholm arbitration ruling will go to the German federal government, Uniper said in a statement. It is not yet clear whether any significant payments should be expected, it said.

The remaining recipients of Gazprom gas in Europe (in Hungary, Austria) have already reported attempts to intercept payments for Russian gas by a certain large European energy company. Russian law states that the implementation of this type of mechanism (and any underpayment) could result in the immediate termination of supplies under existing contracts. To avoid this risk, Hungary has already adopted a regulation stating that payments for Russian gas can only be made in favor of Gazprom Export.

However, it is also a fact that a Russian court, at the request of Gazprom Export, prohibited Uniper Global Commodities SE from continuing these proceedings in international commercial arbitration and imposed a sanction for violating the injunction of 14.312 billion euro.

Russian law states that, as these restrictive measures have been applied to a Russian applicant by a foreign state, the contract's statement of jurisdiction for the resolution of disputes is unenforceable. There is a ban on the provision of legal services to Russian persons by lawyers and law firms from the European Union. In addition, the German authorities seized the holding Gazprom Germania GmbH from Gazprom without compensation.