Ukraine claims Dutch assets of Russia’s Gazprom seized as part of $2.6bn compensation ruling

Ukraine claims Dutch assets of Russia’s Gazprom seized as part of $2.6bn compensation ruling
Ukrainian state energy company Naftogaz claims the Dutch assets of Russia's Gazprom have been seized in compliance with the decision of the Stockholm arbitration court.

In February, the Stockholm court demanded that the Russian company pay for a shortfall in the delivery of gas to Ukraine, awarding Naftogaz $2.6 billion in compensation. Gazprom said that the decision created an imbalance in favor of Kiev. The Russian firm appealed the verdict, and notified Naftogaz that it had launched a procedure for the termination of gas-delivery contracts.

The contract for the supply of natural gas from Russia to Ukraine, signed in early 2009, was set to expire by the end of 2019. Under the terms of the agreement, Ukraine was to buy 40 billion cubic meters of gas a year with the annual volume increasing to 52 billion cubic meters from 2010.

However, Ukraine's Naftogaz opted to stop buying the contracted volume in November 2015, replacing it with reverse gas supplies from European countries. The step was seen by Russia's Gazprom as a breach of contract.

Gazprom CEO Aleksey Miller called the Stockholm Arbitration ruling “an asymmetric decision that violated the balance of interests of the parties under contracts, for delivery and transit, adding that, "In such conditions, these contracts become economically inefficient for us."

Last week, the Ukrainian state energy company applied for the seizure of shares in Gazprom's subsidiaries. Kiev claims the Dutch court upheld the motion, but six out of the seven Gazprom subsidiaries “refused to cooperate with the legal executive.”

“However, that has no impact on the seizure,” the Ukrainian company added.

The headquarters of Gazprom International, which oversees the company’s projects around the world, is located in Amsterdam. Gazprom Energy, another of the corporation’s subsidiaries, is also based in the Netherlands.

“Naftogaz will use all legitimate measures and tools available to us to enforce the decision and fully recover the amount awarded from Gazprom,” Naftogaz CEO Andrey Kobolyev said in a statement released on Tuesday.

Naftogaz has targeted Gazprom's other European assets. At the end of May, Swiss court officers made an inventory of properties attached to the office of the Gazprom-controlled Nord Stream AG project as part of the ruling by the Stockholm arbitration court. The Russian energy company confirmed the information, highlighting that it had not received any notice.

According to the Naftogaz statement, Swiss court bailiffs are currently seizing Gazprom’s stakes in Nord Stream AG and Nord Stream 2 AG.

Gazprom hasn’t received any official documents confirming implementation of the Stockholm court’s ruling. However, the corporation confirmed the seizure proceedings are taking place, according to Russian business daily RBC.

“So far, Gazprom has received no official notifications regarding the procedure,” a statement said. “Gazprom will be able to provide official comment only after the company takes a close look at the documents, if they are transferred.”

The Russian company added that it would assert its rights in compliance with the law.

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