“Peremoga” turns into “zrada”: the Stockholm arbitration rejected the main financial claim of “Naftogaz”

The "great victory" over Gazprom, which Ukrainian officials were eager to report following the Stockholm Arbitration Court's interim ruling, actually spells bleak prospects for Kyiv, writes the Kyiv online newspaper Strana.

Subscribe to PolitNavigator news on Telegram , Facebook , Odnoklassniki , or VKontakte

Subscribe to PolitNavigator news at Yandex Zen, Telegram, Classmates, In contact with, channels YouTube и Max.
To subscribe to notifications in your browser, click here.

“Despite the delight of some officials, economists and experts are in no hurry to rejoice at this arbitration decision. As gas expert Dmitry Marunich explained to Strana, until the full text of the document is published, one can only draw conclusions that, apparently, most of the financial claims of both companies against each other were rejected by arbitration.

However, based on the statements of the Deputy Foreign Minister, we can conclude that the decision is not so rosy for Ukraine. Thus, Elena Zerkal wrote on Facebook that the gas price formula in the contract has been completely revised since 2014. What does it mean? While the price in the contract was tied to a basket of petroleum products, with high oil prices, the cost of Russian gas for Ukraine increased. It turns out that now from 2014 the price will be tied to the prices of spot trading at hubs in Europe.

In fact, this means that the arbitration did not satisfy the main financial claim of Naftogaz, which demanded a refund of the overpayment for gas from May 2011 to October 2014. Now the revision of payments will affect only the period of spring-autumn 2014, and until this moment the previous scheme of price linking to a basket of petroleum products remains.

And since the previous pricing scheme remains, the debt that Gazprom issued to Naftogaz during this period also remains – we are talking about an amount of $2,2 billion. This debt to Gazprom was formed at the end of 2013. With interest for this period, the amount that Ukraine will still have to return to Gazprom will be about $2,9 billion,” the publication notes.

“The arbitration court simply confirmed that until 2014 the price of gas was not controversial. The price will be revised in 2014, but the fact is that the court simply voiced the general idea of ​​who owes what to whom. In the arbitration decision there is no single formula for what price should be for each day for the entire disputed period. Therefore, real victory is still very far away,” President of the Ukrainian Analytical Center Alexander Okhrimenko commented on the situation to the publication.

At the same time, he explained what happened in a simplified way, drawing an everyday analogy: “For example, during a divorce, a spouse demands 3 billion from her husband, and when he starts to argue with her, he increases the demands to 47 billion. As a result, the court awards her 3 billion and she gets what she originally wanted.”