Gazprom loses $3.4 bln in legal battle with Ukraine

Russia’s energy giant Gazprom was rejected by the Supreme Economic Court of Ukraine in its appeal regarding a $3.4 billion fine for breaking a contract for gas shipments with Ukraine-owned Naftogaz, according to Forbes.

The court rejected Gazprom’s appeal regarding the imposition of a fine for the “abuse of a monopoly position” in the Ukrainian natural gas market between 2009 and 2015, Forbes reported. According to the Anti-Monopoly Committee in Kyiv, Gazprom failed to allow for “market competition” in gas transit via Ukraine.  Gazprom called the ruling a “great surprise” because the company is dependent on Naftogaz for deliveries.

On April 13, the Commercial Court returned the case to Gazprom lawyers without consideration of the claim, and on May 18 the Economic Court of Appeals dismissed it altogether. Gazprom believes Ukraine is looking for a negotiating tool ahead of the winter package talks for winter gas deliveries, and the billion dollar fine is leverage against Gazprom in an ongoing dispute that saw a Stockholm arbitration court rule against Naftogaz for a similar amount regarding overdue payments to the Russians, lawyers close to the Russians have said, according to the report.


Gazprom could refuse to pay the fine. If so, the Ukrainians could try to block Naftogaz payments for future gas transit until the court winnings are forked over by the Russians. Gazprom has the right to one more appeal: the Supreme Court of Ukraine. The company has three months to state its case to the highest court in the land. Gazprom did not comment as to whether or not it would appeal.

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