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Swedish court rejects Lithuanian appeal against Gazprom arbitration ruling


Ends eight-year dispute over alleged unfair pricing practices

Vilnius wanted Gazprom arbitration ruling annulled

Decision from June 2016 rejected Eur1.5 billion claim

London — A Swedish court on Thursday rejected an appeal filed by the Lithuanian energy ministry against a 2016 arbitration ruling in favor of Gazprom, the Russian company said Thursday.

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The ruling by the Svea Court of Appeal marks the end of an eight-year dispute prompted by Lithuanian claims against Gazprom over alleged unfair gas pricing practices.

Lithuania had claimed Eur1.5 billion in compensation, but this was rejected by the Stockholm court of arbitration in June 2016.

Lithuania appealed against the arbitration ruling in September 2016, but after a lengthy process the appeal was rejected.

"Today, the Court of Appeal rejected in full the Lithuanian petition to cancel the decision of the Stockholm arbitration court of June 22, 2016, regarding the dispute between Lithuania and Gazprom," the Russian company said in a statement.

"Therefore the conclusions of the Stockholm arbitration court, which rejected all the claims by Lithuania regarding the conditions for the purchase of Russian gas, were confirmed," it said.

That included the Eur1.5 billion claim as well as all of Lithuania's statements regarding the "injustice" of the gas prices that Gazprom charged Lithuanian gas company Lietuvos Dujos from 2006 to 2015.

The Swedish court also ordered Lithuania to reimburse Gazprom for all legal costs.

"Today's decision concludes the eight-year dispute initiated by Lithuania against Gazprom. Lithuanian taxpayers, in addition to financing the costly Lithuanian disputes, will also have to pay court costs incurred by Gazprom," it said.


Appealing an arbitration decision is highly unusual as it puts into doubt the authority of the arbitration court.

Nonetheless, Gazprom itself has appealed a ruling from the Stockholm arbitration court from February 2018 that awarded a net $2.56 billion in favor of Ukraine's Naftogaz in a dispute over the parties' 10-year gas supply and transit accord.

The appeal is set to be heard in 2020.

A number of arbitration cases between Gazprom and Lithuania and its gas supplier Lietuvos Dujos -- which historically has paid some of the highest prices in Europe for Russian gas -- were heard since August 2011.

The issues were complicated by Gazprom having a minority stake in Lietuvos Dujos, though it divested that stake in June 2014.

Since 2003, the price Lithuania paid for Russian gas went up from $85/1,000 cu m to some $500/1,000 cu m just a few years ago, which had a serious impact on the country's economy.

But when Lithuania began importing LNG at the end of 2014, it was able to win a much better price from Gazprom for its Russian gas supplies.

-- Stuart Elliott,

-- Edited by James Leech,