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Lithuania is planning to sue Russia’s Gazprom for overinflated gas prices at a second court in Sweden, after losing an arbitration court case there. This will be the next episode in a long drama series involving the Russian state giant and the Lithuanian Ministry of Energy that has been going on for several years.
Earlier in 2016, Lithuania effectively lost the first case it had brought against Gazprom at the Stockholm Chamber of Commerce arbitration court in 2012. In its claim, Vilnius asked for 1.4 billion euro (US$1.57 bln) in rebates for excessive payments for gas supplied in the period between 2004 and 2012. The arbitration court ruled that since none of the parties involved could provide sufficient evidence in their favor, no payments were due.
Now, the Baltic nation is seeking an annulment of this court’s decision and a fresh case to be heard at another Swedish court, but according to legal professionals polled by Russia’s Kommersant daily, the chances of this actually happening are quite small. In fact, just about 5 percent of the SCC court’s rulings get annulled. An annulment can only be granted if the arbitration court is found to have breached regular procedure and this is not something that happens often.
Other options, such as an appeal, are not on the table: the ruling by the Arbitration Institute of the Stockholm Chamber of Commerce is final and not subject to any appeals. If Vilnius fails in its attempts to annul it, it will be saddled with millions in court fees. If by some stroke of luck it gets what it wants, Lithuania will be free to sue Gazprom at another, higher court.
The reason it brought its initial claim in front of the SCC’s Arbitration Institute was that this was the court stipulated in its contract with Gazprom should any legal issues between the parties arise. However, if Lithuania wins now and gets its annulment, it will be free to sue Gazprom in any country where Gazprom has assets, according to Russian lawyers.
The case between Gazprom and Vilnius is being watched closely as it might set a precedent to be used in another legal battle involving the gas giant with Ukrainian Naftogaz, which is disputing gas payments of tens of billions of dollars. That case will be heard by the very same Institute of Arbitration later this year.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.