At the end of March of this year it was made one more important decision in the judicial history of disputes between Ukraine and Russia. “Naftogaz” has filed a lawsuit against the European Commission, which adopted a decision allowing Russian Gazprom to increase the use of the OPAL gas pipeline. “Naftogaz” stated that the decision taken on October, 26, 2016, violates Article 274 of the Association Agreement between Ukraine and the EU.
“The EC decision does not create the desired positive outcomes for competition, security of supply and effective functioning of the internal gas market, so it can not be considered valid in accordance with Article 36 of the Directive 2009/73/EC. In its analysis, the EC makes some extremely dubious claims, for example, that the decision (which, in fact, will increase the volume of gas flow through Nord Stream and, as shown by historical statistics, will reduce the volume of transit through Ukraine) will enhance the security of gas supplies to Ukraine. Such statements, and the fact that the decision was taken without consultations with the Ukrainian side, in violation of Article 274 of the Association Agreement and Article 6 of the Treaty establishing the Energy community, distinguish this case from others”, — the press-service of the company commented on the current situation.
In “Naftogaz” it was also said that the claim of the Ukrainian company was a subject to previous review in terms of eligibility, during which it must be specified that “Naftogaz” has a direct and personal interest in the decision of October, 26, 2016.
It is important to note that the case of so-called “Yanukovych's debt” and the claim of “Naftogaz” against the EC will go through completely different scenarios.
There is already a precedent, which increases the chances of winning. Poland filed a similar lawsuit last year and got a decision in its favor. The president of the Centre for Global Studies “Strategy XXI” Mykhailo Gonchar is convinced that if the Court of the European Union will take a decision in the case of “Naftogaz” similar to the Polish one, it will be a huge success for us. “But the court decision will not cancel the decision of the European Commission. It will be just stopped. So, the proceedings will continue”, — the expert adds.
According to Mykhailo Gonchar, due to the fact that two countries have already appealed the EC decision, the Commission will have to somehow get out of this situation. The best scenario is to reestablish the status quo.
“Having faced with negative perception of a member country and associated country, the European Commission would have to return to the initial position. But the Brussels does not accept quick decisions, there is a certain procedure of consultation with member countries, I think that the proceedings will continue,” — Mykhailo Gonchar said.
The “Naftogaz” appeals to the international courts are not limited to the claim against the EC. There are two more cases under proceedings in the Stockholm arbitration today. One case concerns the contract with Gazprom on gas transit, the second one — on gas prices.
Naftogaz demands the court to change the terms of the transit agreement and the price of Russian gas. The total amount of claims of the Ukrainian side is $27 billion. For its part, Gazprom accuses Ukraine of violating the Contract that is based on the "take or pay" principle and demands $39 billion from our country. Given such odds, the Ukrainian side actually plays an all-or-nothing game.
“Regarding the case on sale and purchase of gas, the decision should be in April, on transit — in June. Things don't look bad for “Naftogaz” there. But we should not expect a total win or loss both for “Naftogaz”, and “Gazprom”, — Mykhailo Gonchar said.
We have chances for winning due to the fact that, unlike the London court, Stockholm arbitration considers not only the spirit and the letter of the contract, but also examines the market environment, and maps it for compliance with the market conditions. This is done in order to avoid discrimination of one partner by another one.
But claims of “Naftogaz” do not end with only these cases. In October, 2016, the company filed a lawsuit against Russia in the amount of $2.6 billion, demanding to compensate for losses caused by the grabbing of the Naftogaz assets by Russia in annexed Crimea. This case is in the initial phase of proceedings, but promises to be very difficult.
“It is uncertain how long it will last. Such precedents have not happened before. It's not only occupied, but also annexed territory. As for the shelf — it is not at all the territory of the Crimean Peninsula, but the exclusive marine economic zone. It is an act of Maritime piracy and robbery, but from what point of view will the court qualify it? And how to find the court with proper jurisdiction?” — Mykhailo Gonchar comments the situation.
