News

Polskie Górnictwo Naftowe i Gazownictwo (PGNiG - Polish Oil and Gas Company) announces that Gazprom has failed to comply with the final award issued by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) in response to a suit brought by PGNiG. The award of March 30th 2020 amended the pricing formula used to determine the prices of gas supplies under the Yamal contract. Nevertheless, Gazprom is not honouring the award issued following the long arbitration process, continuing to issue invoices based on the invalid pricing formula.

PGNiG has requested the supplier to correct the invoices issued in recent weeks, indicating that the arbitration award is final and binding on both parties. PGNiG believes the supplier’s failure to respond can be considered wilful disregard of the award. This constitutes a gross breach of the terms of the Yamal contract as, at the time when the arbitration award was handed down, the new pricing formula became automatically its part.

At the same time, PGNiG states that it fully respects the award of the Stockholm Arbitration Institute and its consequences, making timely payments for the gas supplied in amounts resulting from the new pricing terms.

PGNiG will take all steps necessary to fully enforce the arbitration award and to recover any overpayments for gas supplied under the Yamal contract since November 2014. In PGNiG’s opinion, the conduct of Gazprom consisting in its failure to comply with the arbitration award may be perceived as continued abuse of its dominant position. In this context, it should be noted that Gazprom’s anti-competitive behaviour has in recent years been investigated by the European Commission, and in the course of that investigation PGNiG has pointed out the Russian company’s monopolistic pricing practices. PGNiG is now considering the possibility of notifying the Commission of Gazprom’s anti-competitive practices involving its failure to comply with the arbitration award.