Ivan Lischchyna (Counsel), ENGARDE Attorneys at Law, (Ukraine)

We have previously reported that the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) is arbitrating a dispute between RosUkrEnergo and Naftogaz Ukrayiny (see Legal update, SCC arbitration commenced against Naftogaz Ukraine). Following pressure from the former Prime Minister of Ukraine (Yuliya Tymoshenko), RosUkrEnergo was removed from its position as intermediary for gas contracts between Russia and Ukraine.

Since April 2008, RosUkrEnergo has filed several separate actions against Naftogaz for various alleged violations of the gas supply contract. The most significant claims allege that the Ukrainian government expropriated 11 billion cubic meters of gas from RosUkrEnergo. In August 2009, the SCC arbitration tribunal joined all claims together, which now total approximately US$2 billion. Naftogaz also filed counterclaims against RosUkrEnergo for a total amount of US$180 million.

In late March 2010, the SCC tribunal issued an intermediate award ordering Naftogaz to pay RosUkrEnergo US$197 million of the outstanding debt for gas supplied in 2008. At present, it is unclear whether Naftogaz will challenge the award before the Svea Court of Appeal, a procedure open to it under the Swedish Arbitration Act.