International Trubinal – Newspaper Kommersant No. 223 (7424) dated 01.12.2022

The German Uniper initiated arbitration proceedings against Gazprom Export, hoping to compensate more than €11.6 billion for lost gas volumes. The rise in gas prices and the reduction in supplies from the Russian Federation led to Uniper’s losses, which put the company on the verge of bankruptcy and led to the need for its nationalization. Gazprom Export denies the violation of the contract with Uniper and considers claims for damages to be unlawful. Lawyers believe that the outcome of the proceedings will depend on whether the court recognizes the short supply of gas from Gazprom as force majeure.

The German Uniper, which was previously the largest buyer of Russian gas in Europe, initiated arbitration proceedings against Gazprom Export in the international arbitration tribunal in Stockholm, follows from messages companies. Uniper is demanding compensation for losses incurred due to the short supply of Russian gas since June.

Gazprom began to cut gas supplies to Germany via Nord Stream since mid-June, explaining this by Siemens Energy’s failure to fulfill its obligations to repair the gas pumping unit for the Portovaya compressor station. Deliveries gradually decreased during the summer and stopped completely at the end of August. Back in the summer, Gazprom retroactively announced a force majeure to a number of its customers regarding deliveries starting from June 14th.

Thus, the Russian monopoly already at that time began to prepare for defense against legal claims from European buyers. Uniper, for its part, called Gazprom’s decision to declare force majeure a breach of contract.

Uniper was forced to replace the underdelivered gas from Russia by buying it at a higher price on the spot market in order to fulfill its contracts with domestic consumers. The company’s expenses for these purposes reached €11.6 billion, putting it on the verge of bankruptcy and requiring the intervention of the German authorities. “We incurred these costs, but this is not our responsibility,” said the company’s CEO Klaus-Dieter Maubach.

Gazprom Export responded by saying that it does not recognize the breach of contracts and the legitimacy of Uniper’s claims for damages. “At the moment, we are studying the received statement of claim and will protect our interests within the legal framework,” Gazprom Export said in a statement.

Uniper is one of the European companies most affected by the decline in Russian gas supplies. Now she located at the stage of nationalization, the German government had to invest about €8 billion in the company in order to ensure the stability of gas supplies this winter. Previously Uniper reported, which received a loss of €40 billion unprecedented for the European market in the first nine months of this year. The company said last week that it needed another €25 billion to stave off collapse.

“Uniper’s chances of recovering losses from the short supply of gas, in my opinion, will depend on whether Gazprom can convince the Arbitration Institute of the Stockholm Chamber of Commerce that the short supply of gas in the volumes that were agreed with Gazprom under the contract was caused by force majeure,” says Tatiana Kandrina, managing lawyer at Birch Legal.

“In the event that the circumstances are recognized as force majeure, the court must reject Uniper’s claims. At the same time, it is also necessary to take into account the provisions of the contract concluded by the parties, in particular, the existence of special provisions regarding force majeure, as well as the applicable law of the contract chosen by the parties,” says Ms. Kandrina.

Tatyana Dyatel