Summary

The Dispute in Summary

(5) This Arbitration ("the Transit Arbitration" or "the Gas Transit Arbitration") relates to a dispute under Contract No. TKGU dated 19 January 2009 between Gazprom and Naftogaz on volumes and conditions for transit of Natural Gas of Russian, Kazak, Turkmen or Uzbek origin through the territory of Ukraine from 2009 to 2019 (the "Contract" or the "Gas Transit Contract").

(6) The Gas Transit Contract was entered into on the same day as the Gas Sales Contract between the same Parties and is related to the Gas Sales Contract, inter alia through the calculation of the transit tariff. A dispute related to the Gas Sales Contract was referred to arbitration on 16 June 2014, SCC Case No. V 2014/078 ("the Supply Arbitration" or "the Gas Sales Arbitration"). The disputes are handled in separate arbitration proceedings but in the same Arbitral Tribunal; a Separate Award in the Gas Sales Arbitration was rendered on 31 May 2017 and the Final Award in the dispute was rendered on 22 December 2017.

(7) The Gas Transit Contract provides for the transit of very significant volumes of Natural Gas from the Russian Federation to European countries, covering approximately 50-60 per cent of Russian Natural Gas exports to Europe. The Gas Transit Contract is a long-term agreement for the use of the Ukrainian Gas Transmission System ("GTS"), a major infrastructure of vital importance to the Russian Federation as an energy exporter, and other European countries as energy importers. Such infrastructure is always subject to complex and changing regulatory requirements, and, like many long-term agreements, the Contract includes provisions allowing the Contract to be adapted in order to comply with the applicable legislation in Article 13.2.

(8) In this Arbitration, Naftogaz claims (1) adjustment and replacement of alleged invalid and ineffective provisions on volumes and conditions for transit of Natural Gas through the territory of Ukraine, including transfer of Naftogaz' rights and obligations under the Contract to the Ukrainian TSO Ukrtransgaz, (2) tariff revision and claim for underpayment of transit services under the Contract,, (3) and compensation for underdeliveries of transit volumes. Naftogaz also has claims for interest.

(9) Naftogaz' claims also encompasse assignment of the Contract from Naftogaz to the Ukrainian Transmission System Operator ("TSO"), PJSC Ukrtransgaz ("Ukrtransgaz").

(10) Gazprom requests that the claims should be dismissed. Gazprom also requests that Naftogaz' claims be rejected on the merits.

(11) According to Gazprom, the Tribunal does not have the power to re-write the Contract in the manner requested by Naftogaz and, moreover, Naftogaz has not fulfilled the contractual requirements pursuant to the tariff review provisions.

(12) Further, according to Gazprom, the Tribunal lacks jurisdiction to determine claims based on "energy law".

(13) According to Gazprom, the majority of Naftogaz's claims for relief do not fulfil the procedural requirement that the claims must be specific in order to avoid any doubts as to the content of the operative part of the award claimed by Naftogaz.

(14) Gazprom has counterclaims for payment pursuant to the Contract for gas which Naftogaz allegedly took in 2014 but did not pay for. Gazprom also has a counterclaim for compensation of alleged overpayments of the transit tariff in case Naftogaz' claims in relation to the price in the Gas Sales Contract are successful. In addition, Gazprom also has claims for interest.

(15) Naftogaz rejects Gazprom's counterclaims on the merits.

On OGEL:

• Public Joint Stock Company Gazprom v National Joint Stock Company Naftogaz of Ukraine - Challenge of arbitral award rendered in Stockholm on 31 May 2017 and corrected on 9 August 2017 - SVEA Court Of Appeal Judgment Case No T 10191-17 - English and Swedish - 27 November 2019
• Svea hovrätt Press Release: Arbitral award in a dispute regarding supply of natural gas remains unchanged (Gazprom - Naftogaz) - T 10191-17 - 27 November 2019
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-129 - Final Award (Transit Award, Redacted) - 28 February 2018
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-078-080 - Final Award Gas Sales Arbitration (Redacted) - 22 December 2017
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-078-080 - Separate Award Gas Sales Arbitration (Redacted) - 31 May 2017

On TDM:

• Public Joint Stock Company Gazprom v National Joint Stock Company Naftogaz of Ukraine - Challenge of arbitral award rendered in Stockholm on 31 May 2017 and corrected on 9 August 2017 - SVEA Court Of Appeal Judgment Case No T 10191-17 - English and Swedish - 27 November 2019
• Svea hovrätt Press Release: Arbitral award in a dispute regarding supply of natural gas remains unchanged (Gazprom - Naftogaz) - T 10191-17 - 27 November 2019
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-129 - Final Award (Transit Award, Redacted) - 28 February 2018
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-078-080 - Final Award Gas Sales Arbitration (Redacted) - 22 December 2017
• National Joint Stock Company Naftogaz of Ukraine v Public Joint Stock Company Gazprom - SCC Arbitration no V2014-078-080 - Separate Award Gas Sales Arbitration (Redacted) - 31 May 2017