German company sues Gazprom for €13bn
12 June 2024 12:08
The Stockholm Arbitration Court has ruled in favour of the German company Uniper in its dispute with Russia’s Gazprom. The court allowed Uniper to terminate its long-term gas supply contracts with Gazprom Export and awarded the German company more than EUR 13 billion in compensation, reports "Komersant Ukrainian" citing the company’s press service.
This compensation is for Gazprom’s failure to deliver the contracted volumes of gas since mid-2022. After Russia’s full-scale invasion of Ukraine, natural gas supplies to Germany were significantly reduced and stopped completely at the end of August 2022.
However, legally, the gas supply contracts between Uniper and Gazprom were still valid, and some were supposed to be valid until the mid-2030s. Having suffered huge losses due to the lack of Russian gas, Uniper turned to arbitration in late 2022.
Now, following the ruling of the Stockholm arbitration, Uniper can officially terminate these long-term contracts and receive more than €13 billion in compensation from Gazprom Export. The arbitral award is final and binding.
“This decision provides legal clarity for Uniper. With the right of termination that we have received in the arbitration award, we are terminating our contracts with Gazprom Export. The award also confirmed Uniper’s legal position on damages. Any amounts will go to the German federal government. From today’s point of view, it is not yet clear whether we should expect significant amounts,”
– said Uniper CEO Michael Lewis.
“Gazprom
“Gazprom is Russia’s largest state-owned energy company, a monopolist in the production and export of natural gas. It was founded in 1989, when the gas industry of the former USSR was separated from the Ministry of Gas Industry. The company is controlled by the Russian government, which owns more than 50% of the shares.
The share of gas from Gazprom in the global market is constantly falling. In 2011, the company produced 17% of the world’s gas, and in 2017, it produced about 12% of the world’s gas. Prior to Russia’s full-scale invasion of Ukraine, Gazprom provided about a third of the European Union’s gas imports, supplying it under long-term contracts.
However, after the invasion, Russian gas supplies to Europe dropped significantly. As a result, in September 2022, gas transit from Russia to the EU stopped completely.
“Gazprom Export is a subsidiary of Gazprom responsible for gas exports to non-CIS countries. It is the company that German Uniper sued in arbitration.
In 2023, Gazprom became unprofitable for the first time in a quarter of a century – the company ended the year with a loss of about $7 billion. The last time Gazprom was unprofitable was in 1999.
