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Ukraine's Naftogaz Claims $2.5 Billion Victory In Legal Battle With Gazprom


The headquarters of Naftogaz in central Kyiv (file photo)

Ukrainian energy company Naftogaz says Russian state-owned gas giant Gazprom will have to pay it $2.56 billion after a Swedish court ruled in Naftogaz's favor in the final stage of a long-running legal battle.

Ukrainian Infrastructure Minister Volodymyr Omelyan welcomed the February 28 decision, calling it a "victory in Stockholm" on Facebook.

In June 2014, Gazprom and state-owned Naftogaz lodged multibillion-dollar claims against each other with the Arbitration Institute of the Stockholm Chamber of Commerce, which resolves commercial disputes.

The dispute occurred amid deteriorating relations between Kyiv and Moscow since Russia's annexation of Crimea and the start of Russia-backed separatist violence in Ukraine's Donbas region, which has killed more than 10,300 people.

The latest ruling, which concludes the legal dispute, dealt with Naftogaz's claims that it was owed compensation for Gazprom not sending a certain amount of gas annually via Ukraine and paying too little for the gas that did transit through Naftogaz pipelines.

"Naftogaz was awarded damages of $4.63 billion for Gazprom's failure to deliver the agreed transit-gas volumes," Naftogaz spokeswoman Olena Osmolovska said.

Since the court previously ordered Naftogaz to pay Gazprom for gas-supply arrears, the net payment Gazprom will have to make to Ukraine is $2.56 billion, Osmolovska said.

Gazprom issued a statement early on March 1 saying it disagreed with the court's decision requiring it to pay compensation to Naftogaz, and said it will "defend its rights by all means in line with applicable legislation," according to Russian state-run news agency TASS.

But TASS quoted the Gazprom statement as applauding a separate court decision rejecting Naftogaz's demand to increase its tariffs on Russian gas transiting through Ukraine.

Based on reporting by Reuters, AFP, and TASS