The Stockholm Arbitration approved a decision in favor of NJSC Naftogaz of Ukraine. Gazprom will have to pay $2.56 billion in favor of Naftogaz. However, it is unlikely that the Ukrainian side will easily receive compensation from the Russian energy monopoly.
However, the very fact that such an award has been handed down by the Stockholm arbitration is a really positive thing for Ukraine. As a result of the two arbitration proceedings, theoretically, that is, if all the conditions are met, the Ukrainian budget should receive a substantial sum.
This is also a positive thing for Ukraine compared with the previous arbitration decision, which was only a relative victory, although it was highly advertised both by NJSC Naftogaz of Ukraine and the Ukrainian authorities. I consider it a relative victory because there were both bright and dark sides to that award.
However, the question of whether Gazprom will execute the court decision remains open
This time, it is clearly stated that Gazprom is to pay compensation for undersupplied gas transit volumes, which were specified in the contract. And this happened not for the reason that Gazprom had no consumers. After all, they transported gas via other pipes. So the Stockholm Arbitration did not accept this argument of the Russian side. At the same time, it accepted the argument of Naftogaz in the previous proceedings – the one on the deterioration of the Ukrainian economy for many reasons, including Russian aggression, and that Ukraine did not have to buy such a large amount of gas - the "take or pay" was laid down in the contract.
Consequently, all of this has led to the fact that our budget may receive more than two billion dollars. So, of course, this is a positive aspect.
Time will show which nuances Gazprom will discover or which steps will be taken to avoid fulfilling the conditions and decisions prescribed
However, the question of whether Gazprom will execute the court decision remains open. We shouldn’t doubt that they will look for every opportunity to avoid such execution. There is no doubt that they will insist that this is a result of biased political attitude and so on. Without a doubt, in the domestic information market, they will be telling Russian consumers some things that will either level off the defeat, or assure them of bias, or perhaps even persuade that they have in fact won the dispute.
Therefore, we should not expect the Russian side to easily comply with the court's decision. We should not hope that they will pay the money right away. Moreover, Gazprom has already stated that they will try to resist the decision with all legal means available. Well, let them search for them if they can find any...
In any case, the decision of the Stockholm arbitration is final, therefore, Gazprom will be obliged to comply with it. Time will show which nuances Gazprom will discover or which steps will be taken to avoid fulfilling the conditions and decisions prescribed.
Valeriy Borovyk is a Chairman of the Board of the New Energy of Ukraine Alliance
