represented in this Arbitration by
Wikborg, Rein & Co. Advokatfirma DA
Attorneys-at-law Dag Mjaaland and Aadne M. Haga P.O. Box 1513 Vika
N-0117Oslo
Norway
Gernandt Danielsson Advokatbyra KB
Attorneys-at-law Bjorn Tude and Marcus Johansson
Hamngatan 2
P.O. Box 5747
SE-114 87 Stockholm
Sweden
AEQUO LLC
Attorneys-at-law Denis Lysenko and Pavlo Byelousov
Victor Business Centre
B. Khmelnitskogo Str., 52
01030 Kiev
Ukraine
represented in this Arbitration by
DLA Piper UK LLP
Attorneys-at-law Philip Chong and Christina Lawrence
3 Noble Street
London
EC2V 7EE
England
DLA Piper Rus Limited
Attorneys-at-law Yaroslav Moshennikov and Angela Kolesnitskaya
Leontievsky pereulok, 25
Moscow
12509
Russian Federation
Advokatfirman Vinge
Attorney-at-law James Hope
Smalandsgatan 20
Box 1703
SE-111 87 Stockholm
Sweden
- Naftogaz has nominated as arbitrator:
Mr. Jens Rostock-Jensen
Advokatfirmaet Kromann Reumert
Sundkrogsgade 5
DK-2100 Copenhagen
Denmark
Telephone: +45 3 8 77 44 50
Mobile phone: +45 40 59 04 32
Email: jrj@kromannreumert.com
in accordance with Article 13(3) of the Arbitration Rules of the Stockholm Chamber of Commerce (SCC) in force as of 1 January 2010 (the "SCC Rules").
- Gazprom has nominated as arbitrator:
Mr. Johan Munck
Anhaltsvagen 48
SE-191 40 Sollentuna
Sweden
Telephone: +46 8 358068 (or +46 8 964164)
Telefax: +46 8 51989183
Email: johan@munck.one
in accordance with Article 13(3) of the SCC Rules.
In accordance with Article 13(3) of the SCC Rules, the Board of SCC appointed as Chairperson of the Arbitral Tribunal:
Mr. Tore Wiwen-Nilsson,
Palsjovagen 24,
223 63 Lund,
Sweden
Email: twn@indarb.se
Telephone: +46 709 100 134
Administrative Secretary to the Tribunal, appointed by SCC with agreement of the Parties:
Professor Boel Flodgren
Palsjovagen 10
223 62 Lund
Sweden
Email: boel@flodgren.se
• RosUkrEnergo would be the sole importer of Natural Gas to Ukraine, purchasing gas from Gazprom's subsidiaries Gazexport LLC and Gazprom LLC;
• Naftogaz and RosUkrEnergo founded a joint venture CJSC "Ukrgaz-Energo" ("Ukrgaz-Energo") - for sales of the natural gas imported by RosUkrEnergo in the Ukrainian domestic market;
• RosUkrEnergo purchased gas from Central Asian countries (Turkmenistan, Kazakhstan and Uzbekistan) at their external borders and up to 17 hem of natural gas from Gazprom, and then it resold these volumes to Ukrgaz-Energo;
• Ukrgaz-Energo resold the gas in the Ukrainian market (i) directly to industrial consumers and (ii) to Naftogaz which supplied natural gas to local distribution companies;
• Law of Ukraine on Fundamentals of the Functioning of the Natural Gas Market (the "Ukrainian Gas Market Law"), dated 8 July 2010, No. 2467-VI, as amended, establishing the legal, economic and organisational basis for the functioning of the Ukrainian gas market and the Ukrainian GTS as well as state control thereof. This Law contains a number of provisions implementing the Second Gas Package regarding the independence of the operator of the gas transmission system (the "transmission system operator", the "TSO") and equal access to the gas transmission system. In particular, the Law prohibits a gas transportation undertaking from being engaged in production and supply of natural gas, and provides that a TSO shall be responsible for operating, maintaining and developing the transmission system and its interconnections with other systems, cf. Article 2 (4) of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas.
• Law of Ukraine On Pipeline Transport (the "Ukrainian Pipeline Transport Law"), dated 15 May 1996, No. 192/96-VR, as amended, inter alia establishing technical rules and standards for the operation of pipeline transportation installations as well as providing for the corporate model and requirements for companies active in pipeline transportation and/or surface storage of natural gas. The Ukrainian Pipeline Transport Law stipulates conditions for unbundling, and sets out the license requirements for a TSO;
• Law of Ukraine on Oil and Gas (the "Ukrainian Oil and Gas Law"), dated 12 July 2001, No. 2665-III, as amended, establishing the legal framework for business activities in production, transportation, storage and distribution of oil and gas which is aimed at "facilitating the competitiveness in the oil and gas comple"x (Article 7). The Law defines transit of natural gas as the transmission of natural gas originated outside Ukraine and destined for consumers outside the territory of Ukraine by main-pipelines, i.e. high-pressure pipelines of the GTS of Ukraine, through the territory of Ukraine in accordance with relevant agreements;
• Law of Ukraine "On amendment of certain laws of Ukraine regarding reform of the management system of Unified Gas Transport System of Ukraine" (the "2014 Ukrainian GTS Reform Law"), dated 14 August 2014, No. 1645-VII, enacting important changes to the gas sector intended to implement the Energy Community Treaty in general, and the Third Energy Package in particular;
• Law of Ukraine on the Protection of Economic Competition (the "Ukrainian Competition Law"), dated 11 January 2001, No. 2210-III, providing for competition regulation applicable also to gas supply and transit in Ukraine and implementing Articles 101 and 102 TFEU prohibiting agreements restricting competition and abuse of a dominant position,
• A number of regulations and decisions of the Cabinet of Ministers of Ukraine (the "CMU"), the Ministry of Energy and Coal Industry of Ukraine (the "Ukrainian Energy Ministry"), and of the National Commission for the State Regulation of Energy and Utilities ("NCSREU") in the gas field, the most relevant of which are listed below:
• Ukrainian Energy Ministry's Decree No. 882 of2 December 2013 entrusting Ukrtransgaz with functions of a TSO of the Unified Gas Transport System of Ukraine,
• Presidential Decree No. 694/2014 of27 August 2014 on the establishment of the National Commission for the State Regulation of Energy and Utilities,
• Ukrainian Energy Ministry's Decree No. 726 dated 17 October 2014 approving and providing in the annex a model contract for natural gas transportation services by high-pressure pipelines through the territory of Ukraine (Model Gas Transportation Contract).
"The subject matter of this Contract is the performance of transit services by the Contractor from 2009 to 2019 inclusive, on a payment basis for transit of Natural Gas through the territory of Ukraine by pipeline transport from Entry Points to Exit Points subject to the volumes and terms set out in Article 3 of this Contract."
"The price for transit services of 1,000 (one thousand) cubic meters of Gas through the territory of Ukraine in 2009 is defined as equal to USD 1.7 (one dollar and 70 cents) per every 100 (one hundred) kilometres with the exception of the price for the services on transit of 1,000 (one thousand) cubic meters of Gas, as rendered in return for previously advance payments, as referred to in Clause 8.2 of this Article.
With effect from 2010, the price for services on transit of 1,000 (one thousand) cubic meters of Gas through the territory of Ukraine (Tn) shall be calculated on an annual basis for the transported volumes of Gas according to the following formula: "
Tn = An + Kmgnj where
An is the tariff, calculated according to the following formula:
An = 0.5 * A2010+ 0.5 * {An-1 x (1 + In-1)}
where:
A2010 = USD 2.04 per 1000 m3 per 100 km.
An-1 constitutes the tariff for the year immediately preceding the current year of transportation.
For the calculation of the price for gas transit in 2010: An-1 A2010.
In-1 is the infation level in the European Union, as published annually by Eurostat agency for the year immediately preceding the current year of transportation. For the calculation of An in 2010, In-1 0.
Kmgnj is the fuel tariff which is calculated monthly according to the following formula:
Kmgnj = (0,03*Pnj) / L * 100
where:
Pnj is the prevailing price for gas supplies to Ukraine in the given payment month under the Contract No. KP dated 19 January 2009 in USD per 1,000 cubic meters,
L is the distance of transportation in kilometres (km) equal to 1240 km,
n is the corresponding year of gas transportation, and
j is the corresponding month of gas transportation in year n"
"In case of a significant change in 2010 and subsequent years of the terms for determination of transit tariffs in the European gas market as compared to what the Parties had reason to expect at the conclusion of this Contract, and if the price for transit services specified in Clause 8.1 of this Contract does not correspond to the level of transit tariffs in the European gas market, each Party is entitled to apply to the other Party with a request for revision of the price for transit services."
"8.7. In the event of a material change in 2010 and subsequent years of the conditions of formation of transit tariffs at the European gas market, as compared to what the Parties reasonably expected at the time of entering into this Contract, and if the transit tariff specified in Clause 8.1 of this Contract does not correspond to the level of transit tariffs at the European gas market, each Party shall have the right to address the other Party with a request to reconsider the transit tariff
"The Client shall pay for the services rendered by the Contractor on transit of Gas through the territory of Ukraine on a monthly basis by transferring money to the Contractors account by the 20th day of the month following the month in which services were rendered based on the invoices issued by the Contractor in compliance with the Transit Services Price Report signed by the Parties in the actual calculated value of rendered services based on the common volume of the transported Gas as specified in the monthly reports and the prices for transit according to Clause 8.1 and Clause 8.2, taking into account the provisions of Clause 8.4.
If the Contractor issues an invoice after the 15th day of the month following the reporting month, the term of payment for services on transit shall be extended with the respective number of business days."
"The Client and the Contractor will undertake their best efforts to duly perform the undertaken obligations under this Contract.
Should the Parties fail to perform the terms and conditions of this Contract, each of the Parties shall reimburse the other Party for any proven damages caused by such failure to perform."
"In case the Contractor withdraws Natural Gas supplied for transit by the gas transportation system of Ukraine all the gas withdrawn shall be recorded in the Contract on Sale and Purchase of Natural Gas between OAO Gazprom and NAK Naftogaz of Ukraine No. KP dated 19 January 2009.
The price for this gas shall be established in accordance with Clause 4.3 of Article 4 of the Contract on purchase and sale of natural gas between OAO Gazprom and NAK Naftogaz of Ukraine No. KP dated 19 January 2009."
"If any of the provisions of the present Contract becomes legally invalid pursuant to the applicable legislation or ineffective, this shall not affect the validity of other provisions hereof If any of the provisions of the present Contract becomes invalid or ineffective, the Parties shall agree to replace such invalid or ineffective provision with a new provision that would have the economic effect as close as possible to that of the invalid or ineffective provision."
"All and any amendments and Addenda to this Contract shall be in writing and shall be signed by the authorized representatives of the Client and the Contractor.
The Parties agreed that the said amendments and Addenda signed and sent by fax are binding provided that they are further confirmed by the original
The Parties shall notify each other of changes to their bank details, legal addresses, telephone numbers and faxes within a five-day term following the occurrence of the respective changes."