Naftogaz gains London court order freezing Gazprom assets

The Commercial Court
in London issued an order freezing Gazprom (GAZP RX) assets in England and Wales on June
18, Naftogaz reported the same day. Also, the court required Gazprom to provide
Naftogaz with a list of all its assets with a value greater than USD 50,000
located in England and Wales. The order was issued to enforce the Stockholm arbitration award of
Feb. 28,
whereby Gazprom owes Naftogaz USD 2.6 bln.

Naftogaz stressed
that the London court’s ruling “was made in full knowledge of a temporary
decision made on June 13, 2018 by the Svea Court of Appeal in Stockholm to suspend the enforcement of the transit award”. Naftogaz
commented on the Svea Court of Appeal’s ruling, stating that it only suspends
the enforcement of the Stockholm Arbitration Court’s award in Sweden. “It is up
to the courts of each individual country to determine, under its own national
laws, whether the Swedish ruling suspends the enforcement of the award in such
country,” Naftogaz said.

Naftogaz also
reported it had “notified the London offices of 17 banks doing business with
Gazprom that they may not facilitate any reduction in Gazprom’s assets in
England and Wales of the order against Gazprom”.

Alexander Paraschiy: It’s clear that Gazprom is not
willing to pay the award and will do all its best to postpone the payment for
as long as possible. According to Naftogaz commercial director Yuriy Vitrenko,
litigation in Sweden could take three more years, involving its Supreme Court.
Meanwhile, Gazprom will continue to face risks of asset freezes in more
jurisdictions, which, among other things, may limit its ability to borrow abroad.

For Naftogaz, all this means that the company shouldn’t count on a fast
recovery of money awarded by the Stockholm court. Meanwhile, it will have to
continue spending money for further litigation in different jurisdictions.