Lawfulness of application of take-or-pay principle in Naftogaz-Gazprom contract to be decided by court

Naftogaz Ukrainy believes that the take-or-pay clause, as set out in its 2009 contract with Gazprom, is "nonmarket, unlawful and invalid" and therefore contests its application at the Arbitration Institute of the Stockholm Chamber of Commerce, the Ukrainian gas company said in a statement on Tuesday.

"The lawfulness of Gazprom's claims based on the take-or-pay clause will thus be decided by the court," the Ukrainian company said.

Currently, Gazprom's legal claims citing the take-or-pay clause for the 2012-2014 period total $26.7 billion, the company said. Furthermore, Gazprom invoked the same clause in suggesting that Naftogaz pay $2.5 billion for the third quarter of 2015, Naftogaz said.

It was reported that on Tuesday Gazprom reported having transferred $2.549 billion to Naftogaz in payment for the gas not taken by the Ukrainian company in the third quarter under the take-or-pay condition.

"In 2015 Ukraine effectively stopped buying Russian gas in the third quarter, so there was no agreement in that period over non-application of the take-or-pay rule," Gazprom chief executive Alexei Miller was quoted as having said.

In 2015, the take-or-pay condition did not apply to Naftogaz Ukrainy in the first, second and fourth quarters.

According to Gazprom, its current legal claims against Naftogaz at a Stockholm arbitration court total $29.2 billion (mostly penalties for not taking gas). If new take-or-pay claims are added, the sum will rise to $31.75 billion.