Swedish court renews enforcement of Gazprom award to Naftogaz

The Svea Court of Appeal in Stockholm ruled on Sept. 13
to cancel the suspension of enforcement by Naftogaz of its USD 2.6 bln award
against Gazprom (GAZP RU), Naftogaz reported the same day. On June 13, the same court suspended the enforcement in Sweden
following an appeal filed by Gazprom. “In its brief reasons, the Court states
that grounds for stay of enforcement no longer exist. Previous decisions to
stay enforcement shall therefore be repealed,” Naftogaz commented on its
website.

In other news, an English court ruled on Sept. 13 to
cancel its June 18 order to freeze Gazprom assets in England and Wales,
the Russian media reported, citing Gazprom’s press service. The latest decision
was made after Gazprom committed to not reallocate shares of Nord Steam AG from
an English jurisdiction before the enforcement case of the Naftogaz USD 2.6 bln
award is considered by an English court.

Recall, following a long litigation between Gazprom
and Naftogaz, the Stockholm commercial court ruled last winter that Gazprom has
to pay net USD 2.6 bln compensation to Naftogaz. Gazprom is trying to appeal
the decision referring to procedural breaches in court. Meanwhile, Naftogaz is
trying to enforce the ruling in different jurisdictions in western Europe.

Alexander Paraschiy: So far,
Naftogaz has been efficient in making Gazprom’s life hard in various European
jurisdictions and forcing the Russian monopoly closer towards paying the court
award. At the same time, Gazprom is apparently not willing to pay in any liquid
assets, so it will try to delay payment as long as non-payment doesn’t
jeopardize its business.

Alternatively, Gazprom may try to pay Naftogaz in
Ukrainian USD 3 bln Eurobonds that are currently in default and which are being
held by a Russian state fund (the so-called “Yanukovych debt”). Recall, the
Court of Appeal in London is going to announce its ruling on the Yanukovych
debt today. Most likely, the ruling will require Ukraine to pay the debt, but
Ukraine won’t be able to do it technically due to a legal moratorium on
repayment imposed by the Ukrainian parliament.