Russia's Gazprom decided to terminate contracts with Ukraine's Naftogaz after the defeat in Stockholm Arbitration court

Russian Gazprom announced the beginning of the process to terminate contracts with Naftogaz, as reported by the head of Gazprom, Alexey Miller, Russian RNS news agency writes.

"Gazprom is forced to immediately terminate contracts with Naftogaz of Ukraine for the supply and transit of gas as a result of the Stockholm Arbitration," Miller said.

According to him, the arbitration decision on the contracts between Naftogaz and Gazprom violated the balance of interests between the parties and the continuation of the contracts with Naftogaz is economically inexpedient and unprofitable for Gazprom.

"We are categorically opposed to Ukraine's economic problems being solved at our expense," Miller said.

On February 28th, the Stockholm Arbitration Court partially satisfied the demands of Naftogaz in the dispute with Gazprom and ruled that the Russian holding company should reimburse the Ukrainian company $4.63 billion for the non-delivery of gas under the transit agreement between them (the court acknowledged that the Russian company supplied gas for transit to Europe in a smaller amount than was provided for in the contract). However, taking into account Naftogaz's debts for gas already supplied, Gazprom will have to pay $2.56 billion. Initially, the Ukrainian company demanded compensation of $ 17 billion in court.

At the same time, the arbitration court rejected Naftogaz’s demands to increase the tariff for gas transit and change the contract with the Russians in accordance with Ukrainian legislation. The court ruled that the provisions of the European or Ukrainian anti-monopoly legislation are not applicable to the contract.

Gas and transit contracts between Ukraine and Russia will remain in effect until the end of 2019.

  Gazprom, Naftogaz of Ukraine, Stockholm Arbitration Court