3 Jun 2020 11:12

Gazprom challenges arbitration ruling in dispute with Poland's PGNiG

MOSCOW. June 3 (Interfax) - Gazprom has filed a challenge in a Stockholm appeals court against a Stockholm arbitration ruling on the terms of pricing for gas supplied to Poland through the Yamal-Europe pipeline, Polish buyer PGNiG said.

"On May 29, Gazprom and Gazprom Export appealed against the final ruling of the arbitration tribunal in the dispute with Poland's PGNiG in the Svea Court of Appeal in line with established procedure. Earlier, in 2018 the companies also appealed against the interim ruling in these proceedings," Gazprom told reporters.

The Stockholm tribunal ruled on March 30 to revise the price formula of the contract to supply gas to Poland via the Yamal-Europe pipeline. The ruling is binding, but it can be appealed within 60 days.

PGNiG said it does not know the essence of the appeal, since it was not officially submitted to the company, but said it is confident that there are no grounds to demand that the March 30 ruling be overturned. After receiving a copy of the appeal, the company will make a decision regarding further steps in this case, PGNiG said.

The tribunal's decision to change the price formula for gas supplied via the Yamal-Europe pipeline applies retroactively from November 2014. PGNiG has said this means that Gazprom must pay it $1.5 billion in compensation for overpayment in the period from November 2014 to February 2020.

The Russian gas giant has not yet paid the $1.5 billion, but has provisioned for such payments in its financial statement.

PGNiG initiated the arbitration proceedings against Gazprom and Gazprom Export in 2015, demanding a review of prices for natural gas supplied to Poland under a September 25, 1996 contract. It called for the delivery of about 10 billion cubic meters of gas annually, with a minimum contractual amount of 8.7 bcm per year. The contract is in effect to 2022.