Court awards Uniper the right to billions in damages
Published: Wednesday, Jun 12th 2024, 11:40
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When Russia turns off the gas tap in the summer of 2022, the state has to give Uniper a big helping hand. The company goes to arbitration - and is now vindicated.
In the dispute between the nationalized energy group Uniper and the Russian natural gas supplier Gazprom over missing gas deliveries, an arbitration court has awarded Uniper more than 13 billion euros in damages. As Uniper announced in Düsseldorf on Wednesday, the Stockholm-based court also allowed the company to terminate the gas supply contracts.
Uniper then decided to terminate the contracts and thus legally end the long-term gas supply relationship with the Russian state-owned company Gazprom Export. The contracts had formed the core of the German-Russian energy partnership since the 1970s.
Three-digit million additional costs for Uniper - per day
Gazprom had not supplied any gas to Uniper since the end of August 2022. As a result, the company, Germany's largest gas importer, had to procure large quantities of natural gas on the market at extremely high prices. On some days, additional costs in the three-digit million range were incurred.
Uniper was only able to survive with considerable state support. In this crisis situation, the German state took over Uniper almost completely. At the end of 2022, Uniper initiated arbitration proceedings against Gazprom Export and demanded compensation.
Uniper CEO skeptical as to whether compensation will be paid
Uniper's legal opinion has been confirmed, said Uniper CEO Michael Lewis: "From today's perspective, it is not yet possible to estimate whether significant amounts can be expected." Any payments would go to the federal government.
Despite the lack of deliveries, the long-term gas supply contracts between the two companies were still legally in force, according to Uniper. Individual contracts were still in place until the mid-1930s.
The verdict was handed down by an arbitration tribunal in Stockholm
The possibility of settling the dispute via an arbitration tribunal had been contractually agreed and had been repeatedly used by both sides in the past. The court, based in Stockholm, ruled in accordance with Swiss law. "The arbitration ruling is legally binding and final," Uniper reported. The court ruled on June 7.
Uniper is Germany's largest gas trader and is considered systemically important. It supplies more than 1000 municipal utilities and large industrial companies. In Germany and four other European countries, the company also operates many power plants that generate electricity from gas, coal, hydropower, nuclear power and oil. Investments in further renewable energies and hydrogen-capable gas-fired power plants are planned. Uniper is also Germany's largest natural gas storage operator. Uniper also intends to invest in hydrogen production and storage.
©Keystone/SDA
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