Gazprom demanded that Poles share $ 430 million

Gazprom has filed a lawsuit against the Polish state oil and gas company PGNiG. The Polish company announced this on February 2, the information was confirmed to Vedomosti by Gazprom.

The lawsuit was filed in accordance with UNCITRAL regulations, the UN Commission on International Trade Law. It has been in operation since 1976 and is a popular tool for resolving disputes in ad hoc arbitration (created by the parties to consider a specific dispute).

Gazprom’s lawsuit concerns the management of the joint venture Europol Gaz SA, which is the operator of the Polish section of the Yamal-Europe gas pipeline (capacity of about 33 billion cubic meters per year). Europol Gaz owns 48% of Gazprom and PGNiG. Another 4% of PGNiG controls through Gas-Trading SA

The lawsuit concerns the observance of the right to receive dividends from Europol Gaz’s profits, as well as the participation of Gazprom’s representatives in the management of the company (what exactly Gazprom requires, the parties do not disclose). The accumulated profit of the joint venture in previous years, which can be used to pay dividends, according to Interfax, is 1.74 billion zlotys ($ 430 million). By law, a Polish company must respond to a notice of arbitration within 30 days.

A Gazprom spokesman told Vedomosti that he confirmed the request for arbitration against PGNiG SA and EuRoPol GAZ SA, adding that the Russian company “reserves all rights to protect its interests.”

This is not the first trial between Gazprom and the Polish PGNiG. On February 2, the European Court of General Jurisdiction rejected PGNiG’s appeals against decisions of the European Commission (EC) following antitrust cases against Gazprom, Bloomberg reported. The agency clarified that these are complaints of the Polish company filed in October 2018 and in June 2019.

The EC initiated an antitrust investigation against the Russian company back in 2012. It was prompted by complaints from a number of EU members, including Poland, Bulgaria, Hungary, Latvia and Lithuania, about Gazprom’s abuse of monopoly position and rising gas prices. Official accusations by the EC against Gazprom were made in 2015. The EC suggested that the Russian company hinders the diversification of gas supplies, its free flow through the EU, and overprices

Gazprom did not plead guilty, but agreed to reconsider the provisions in the long-term contracts that caused dissatisfaction with the European Commission. As a result, the EC was satisfied with this and closed the case without imposing any fines on Gazprom. PGNiG did not like this decision, which filed a complaint against him in October 2018, but it was rejected. In June 2019, PGNiG tried to overturn this decision of the EC through the court, but also without success. And in 2020, Gazprom was forced to pay PGNiG a $ 1.5 billion overpayment for gas supplied to Yamal-Europe by the Stockholm Arbitration Court (the supply price has been recalculated retroactively since 2014).

“Since Europol Gaz is a joint venture, it is managed jointly. There are representatives of both the Russian and Polish sides in the supervisory board, which he heads [гендиректор “Газпром экспорта”] Elena Burmistrova, and in the board – its chairman Peter Tutak “, – the lawyer of practice of the international economic compliance Art de lex Marat Samarsky told” Vedomosti “.

The lawyer believes that Gazprom may demand that Gazprom’s representatives be included in Europol Gaz’s board. “The JV was organized within the framework of the intergovernmental agreement of August 25, 1993, which was later expanded by additional protocols,” he recalled. In his opinion, the lawsuit may be provoked by the actions of the Polish side: for example, attempts to block decisions that require a qualified majority.

If Gazprom and PGNiG have the same number of voting shares in the joint venture, then the rights are the same, adds the managing partner of the Veta expert group Ilya Zharsky. He added that the Polish side may restrict the right to receive dividends “in connection with any direct breach of corporate obligations” by the Russian company, which are not publicly reported. “In this case, the outcome of the dispute may not be in favor of Gazprom,” he added.

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