Russia: Gazprom Export Appeals against RWE Transgas Court Decision

Gazprom Export appealed to the Vienna Commercial Court on 8th January 2013 against the arbitration decision made on October 4th 2012 concerning the dispute with RWE Transgas.

The dispute arose from the non-fulfillment of the take-or-pay clause in the contract on gas supply to the Czech Republic. The reason for cancellation is that the arbitration decision controverses to public order, namely: the arbitration wrongly applied the imperative norms of the European competition law. As a result, the decision of the arbitration contradicts the European Union law. The Vienna Commercial court in this case is legally adequate instance that can set aside an arbitration decisions delivered on the territory of Austria.

The clauses of Addendum to the contract that were recognized valid by the arbitration in the October last year, are in controversy with the European competition law, namely Article 101 of the Treaty, starting from the moment when the Czech Republic joined the EU. The arbitration decision is clearly anti-Gazprom and forces Gazprom Export to act in breach of the European law.

At the same time, the decision taken by the arbitration allows RWE Transgas to retain its dominant position in the country throughout the duration of its contract, which results in restriction of competition. This directly conflicts the EU imperative norms as well.

In October 2012, the arbitration has declared valid the part of Addendum 1 to gas supply contract between RWE Transgas and Gazprom Export. This part of addendum says that the Czech subsidiary of the German concern can reduce its obligations for gas offtake (the “take-or-pay”) for the same amounts that the Gazprom Group directly supplies to the Czech market. At the same time, the symmetrical part of the same Addendum was declared non-valid. This latter part stated that Gazprom Export had the right to increase the obligations of RWE Transgas, on the amounts that RWE supplies outside of the Czech Republic to the markets where Gazprom Group is working as well.

LNG World News Staff, January 18, 2013; Image: Gazprom

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