Svea hovrätts logotyp

Arbitral award in a dispute regarding supply of natural gas remains unchanged

Mål: T 10191-17
Svea Court of Appeal has today announced its judgment in a case regarding the setting aside of a separate arbitral award between a Russian company and a Ukrainian company. According to the judgment, the claim of the Russian company is dismissed. Two more cases between the same parties are expected to be decided in 2020.

At the beginning of 2009 the Russian company Public Joint Stock Company Gazprom (Gazprom) and the Ukrainian company National Joint Stock Company Naftogaz of Ukraine (Naftogaz) entered into an agreement regarding supply of natural gas. On the same day the parties entered into an agreement regarding transit of the natural gas through the territory of Ukraine.

After some time, there was a dispute between the parties concerning the agreements and both parties filed requests for arbitration at the Arbitration Institute of the Stockholm Chamber of Commerce. During 2017 and 2018 three arbitral awards were rendered – a separate award and a final award concerning the supply agreement and an award concerning the transit agreement.

Gazprom challenged the three awards and claimed that they should be declared invalid, or be set aside. The proceedings took place at Svea Court of Appeal since Stockholm was the seat of arbitration. Today’s judgment of the Court of Appeal concerns the separate award about the supply agreement. Final hearings in the two other cases (T 2826-18 and T 3250-18) are planned to take place during 2020.

In the arbitration proceedings concerning the supply agreement there were i.a. claims for payment and claims for invalidity or replacement of certain contractual clauses. The arbitral tribunal did not rule in favour of Gazprom regarding these issues. In the proceedings before the Court of Appeal, Gazprom claimed that two declarations regarding these issues in the separate award should be set aside.

Gazprom claimed that the arbitral tribunal had committed several errors which should result in the award being set aside. Gazprom claimed i.a. that the arbitral tribunal had exceeded the scope of its authority in its assessment of the parties’ requests as regards the annual contract volume of natural gas that should apply to the contract. Naftogaz claimed that Gazprom’s claims should be dismissed, since no errors had been committed by the arbitral tribunal.

According to today’s judgment, Gazprom’s claim is dismissed. Therefore, the separate arbitral award is not set aside. In its assessment of the case, the Court of Appeal did not find that the arbitral tribunal committed any error during the arbitration proceedings.

Svea Court of Appeal’s judgment cannot be appealed.