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Tuesday, January 18, 2022

Gazprom – PGNiG. Contractual Price Arbitration in the Yamal Contract

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Polskie Górnictwo Naftowe i Gazownictwo has received a summons from Gazprom’s attorney for arbitration before the Arbitration Tribunal in Stockholm. The Russian company expects a retroactive increase in the price of gas supplied under the Yamal contract.

The management board of PGNiG announced that on Friday it received a summons from the attorney of PAO Gazprom and OOO Gazprom Export for arbitration before the Arbitration Tribunal in Stockholm. The call includes a request to change the price conditions for gas supplied by Gazprom under the 1996 Yamal contract.

“The demand for increasing the contract price contained in Gazprom’s tender offer is completely unfounded. We are prepared to prove it to the Arbitration Tribunal,” said Paweł Majewski, president of the PGNiG management board, quoted in the statement.

As we read in the press release, Gazprom’s call includes a demand for an increase in the contract price as part of Gazprom’s request to renegotiate the contract price of December 8, 2017 and Gazprom’s request to renegotiate the contract price of November 9, 2020. The company emphasized that the above-mentioned requests by Gazprom for renegotiation were submitted in response to PGNiG’s requests to reduce the contract price of November 1, 2017 and November 1, 2020. As it added, in the conditions of record high gas prices in Europe, PGNiG’s application from November 2020 was modified on October 28, 2021.

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PGNiG – Gazprom

The Polish company explained that the submission of a call for arbitration by Gazprom initiates the dispute settlement procedure specified in the Yamal contract.

PGNiG explained that, in accordance with the arbitration rules, the company is required to take further steps in the case, including to respond to Gazprom’s request within 30 days of receiving the request. “PGNiG will take the appropriate procedural steps within the prescribed deadline” – assured the Polish company.

As recalled in the announcement, PGNiG used the right to initiate arbitration under the Yamal contract twice, in 2011 and 2015. As a result of the proceedings initiated in 2015 and in March 2020, the Arbitration Tribunal changed the pricing formula of the contract, agreeing to PGNiG’s request.

Main photo source: Shutterstock



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