The Chief Commercial Officer of Naftogaz Yuriy Vitrenko claims that Gazprom will be fined $500,000 every day until it pays $2.56 billion to Ukraine, following the ruling of the Stockholm Court of Arbitration, UNIAN reports.
“Gazprom’s obligation to pay this amount entered force on February 28, 2018. This means that today the corporation already owes $0.5 million of penalties. The day is still young, and Naftogaz has already earned $0.5 million”, Vitrenko said during a press conference in Kyiv on 1 March. If Gazprom failed to pay this amount, it would be an unprecedented case.
“The situation would be unprecedented, where the arbitrage order is not executed, especially in a case being closely looked at by the whole world. It will indeed to be notorious and it sure will affect Gazprom’s reputation. Therefore, we expect the Russians to pay Naftogaz $2.56 billion plus the interest soon,” Vitrenko stated.
The Stockholm Court of Arbitration has considered the claims filed by Naftogaz on behalf of Ukraine against Russia’s Gazprom in regards to the transit of Russian gas through the territory of Ukraine to the European Union and the purchase of Russian gas by Ukraine.
The Court of Arbitration satisfied a number of demands of the Ukrainian party, including a reduction in the gas purchase price in the second quarter of 2014 to $352 per 1,000 cubic meters. The court also rejected Gazprom’s take-or-pay claims amounting to $56 billion. Since not all of Naftogaz’s demands were satisfied, the company still owed $2 billion to Gazprom.
The court’s second ruling pertained to the agreement for transit shipments of Russian gas through the Ukrainian territory, signed in 2009. According to the agreement, Gazprom was supposed to transport 110 billion cubic meters of gas annually through Ukraine. Because the condition had not been met, Naftogaz demanded the court to recover $16 billion in compensation from the Russian corporation in this lawsuit. The court ruled that Gazprom owes $4.63 billion to Naftogaz for the previous periods. Since the court previously ordered Naftogaz to pay Gazprom for gas supply arrears, the net amount currently stands at $2.56 billion.