News

2019.05.07 17:01

Swedish court hears Lithuania's motion over dispute with Gazprom

BNS 2019.05.07 17:01

A Swedish court has started hearing Lithuania's request to annul a Stockholm arbitration tribunal's ruling in a dispute between the government and Russia's gas giant Gazprom. Lithuania had sought, but was not awarded, €1.4bn in compensation for overpriced Russian natural gas.

The court held its first hearing in the case in early May and continues the proceedings on Tuesday and Wednesday, the Energy Ministry has confirmed to BNS.

The ministry expects the Swedish court of appeals to issue its ruling in mid-2019.

A total or partial annulment of the arbitral award, which cost Lithuania €9 million, would open the way for the government to continue to seek that Gazprom compensate consumers for overcharging them. The damage is estimated at €1.5 billion.

Active preparations for the proceedings took more than two years.

Some professionals earlier were skeptical about Lithuania's chances of securing an annulment of the ruling by the Arbitration Institute of the Stockholm Chamber of Commerce, saying it was a merely theoretical possibility and an attempt to exhaust all possible legal means. Some of them believed that Lithuania thus aimed to reach an amicable settlement of the dispute.

Following a four-year legal battle, the arbitration tribunal ruled in June 2016 that Gazprom had a conflict of interest in acting as both a shareholder of Lietuvos Dujos (Lithuanian Gas) and a supplier of gas to Lithuania, but it did not award the compensation sought by Lithuania.

“Due to the complex evidentiary process and the abundance of data, the arbitration tribunal was reluctant to pronounce on the extent of damage caused to Lithuania,” the Energy Ministry said in press release back in 2016.

“The tribunal noted that the notion of 'fair price' is too general to measure possible damage,” it said.

Lithuania brought the action for annulment in September 2016.