Lithuanian government to consider ways to use 1.4bn it may win from Gazprom

[Hindustani78]

Lithuanian government to consider ways to use 1.4bn it may win from Gazprom - EN.DELFI
BNS
wednesday, march 18, 2015

Lithuania’s government is starting to discuss ways to spend approximately 1.4 billion euros, which it may receive as compensation from Gazprom if the Stockholm arbitration court sides with Lithuania in its dispute with the Russian gas giant.

Foto: Reuters/Scanpix
“The government is getting ready to implement the arbitration court’s decision in Gazprom’s case, which may potentially be advantageous for Lithuania. The Cabinet would adopt a protocol resolution obliging the authorities to pass on the benefits, if any, to consumers. The Energy Ministry as well as other institutions and companies will be authorized to work out a respective procedure for passing on those benefits to consumers,” Mantas Dubauskas, spokesman for the energy minister, told BNS.

The government will on Wednesday discuss a respective draft protocol resolution. Money is likely to be transferred to the budget and then distributed to households and companies.


The Stockholm arbitration court will hear the Lithuanian government’s suit against Gazprom in summer and the ruling is expected to be issued in fall. Last November, Lithuania submitted a reply to Gazprom’s response. This spring, the defendant will file a rejoinder.

The government is seeking compensation from Gazprom for overcharging Lithuanian gas consumers for gas supplies between 2004 and 2012. The amount of the suit has not been disclosed, but sources say that currently it is close to 5 billion litas (EUR 1.45bn).

The Stockholm arbitration proceedings were initiated by the previous government in 2012.

In an apparent attempt to influence the Stockholm arbitration tribunal and, possibly, appease EU regulators, Gazprom last May cut the price of natural gas supplies to Lietuvos Dujos (Lithuanian Gas) by 21 percent.

Lithuania was the first in Europe to file a suit against Gazprom at the state’s level.

Before that, Gazprom’s policy used to only be challenged by companies.

For example, back in 2013, Gazprom paid back an advance payment of 1.5 billion US dollars to Germany’s RWE and reduced the price of gas retroactively (from May 2010) in line with the ruling of the arbitration court of Paris.

In 2011, Gazprom reviewed prices, as established in long-term contracts, for Premium Gas, Edisson, Sinergie Italiane, GDF Suez, Wieh, Wingas, and SPP. In 2012, it modified the prices for Germany’s E.ON Ruhrgas, Austria’s Econgas and GWh Gashandel as well as Italy’s ENI. Moreover, it agreed with Poland’s PGNiG on a discount and amendments to the gas price formula.

 

[Hindustani78]

Lithuanian government pledges to give money won in court from Gazprom to consumers - EN.DELFI
BNS
Wednesday, March 18, 2015

• The government said on Wednesday that if Lithuania won its arbitration dispute with Gazprom at the Stockholm arbitration court, then around 1.4 billion euros to be paid as compensation by the Russian gas giant would go to consumers.
  
  
  
  Gazprom
  Foto: Reuters/Scanpix
  The government did not, however, give details as to how the money would reach them.
  
  Prime Minister Algirdas Butkevičius said that the decision was made to prevent possible speculations on this issue.
  
  "We took the decision because our lawyers said that someone - the other side - might speculate about the money not being used in Lithuania for its intended purpose. Our decision is that the money, if it is awarded to Lithuania, will go to Lithuanian consumers. The procedure for the distribution of the money will be worked out later," Butkevičius told reporters after the Cabinet's meeting.
  
  "I have a certain proposal, but I cannot say what until it is approved," he said when asked about the procedure.

The Cabinet of Wednesday adopted a protocol decision and instructed the Energy Ministry to put up proposals as to the best way to distribute the money to consumers and draft the respective legislation.


It is likely that the money would be transferred to the state budget, but it is not clear if it would be only paid to gas consumers or to other consumers as well. However, it is not ruled out that the funds would go toward gas infrastructure projects of public importance.

The Stockholm arbitration court is scheduled to hear the Lithuanian government's suit against Gazprom next summer and to issue its ruling in the fall. Lithuania last November submitted a reply to Gazprom's response. The defendant this spring is to file a rejoinder.

The government is seeking compensation from Gazprom for overcharging Lithuanian consumers for gas supplies between 2004 and 2012.

The suit was initiated in 2012 after Gazprom allegedly violated an agreement on the privatization of Lietuvos Dujos (Lithuanian Gas) in which the Russian company committed itself to supplying gas to Lithuania at fair prices.

 

[Hindustani78]

Friday, March 27, 2015

• Russia’s gas concern Gazprom has what to be afraid of in Lithuania and the European Union (EU), Lithuania’s Energy Minister Rokas Masiulis has said.
  
  
  
  Rokas Masiulis
  Foto: DELFI (T.Vinicko nuotr.)
  “I think Gazprom has what to be afraid of. Our goal is to ensure as low as possible prices of gas for our consumers and to protect the country’s energy independence, to ensure energy security at the same time. We have built a [LNG] terminal and are already in a position to hold talks with anyone. This makes sure that we get the best price – either it is Gazprom’s gas or liquefied gas,” Rokas Masiulis told the LRT Radio on Friday.
  
  If needed, Lithuania would be able to survive without Russian gas, he said, adding that it was not necessary to extend the contract with Gazprom.
  
  “Everything will depend on terms and conditions and we’ll look now who would be the one to offer the best terms and conditions… We can fully manage without Gazprom, in particular as the consumption of gas is decreasing,” the minister said.
  
  According to Masiulis, the EU is in a position to further reduce the consumption of gas, which would deal a blow to the Russian gas concern.
  
  
  “The European Union has a particularly effective weapon against Gazprom, which has not yet been fully used, and I mean energy efficiency. It has been estimated that the EU could reduce the consumption of gas by approximately 60 percent if it wanted to and diverted its investment towards more efficient energy use. Just imagine, if the whole Europe were to reduce its consumption by 60 percent, it would be a huge blow to Gazprom,” the minister said.
  He said that he expected the Stockholm arbitration court to rule on Lithuania’s 1.5-billion-euro lawsuit against Gazprom late this year or early next year.
  
  “This case should be heard this summer and we are expecting the decision either late this year or early next year. The amount involved is really quite big – 1.5 billion euros,” Masiulis said.
  The Lithuanian government is seeking compensation from Gazprom for overcharging Lithuanian gas consumers for gas supplies between 2004 and 2012. The Stockholm arbitration proceedings were initiated by the previous government in 2012.
  
  In an apparent attempt to influence the Stockholm arbitration tribunal and, possibly, appease EU regulators, Gazprom last May cut the price of natural gas supplies to Lietuvos Dujos (Lithuanian Gas) by 21 percent.
  
  The European Commission is said to be readying charges against Gazprom after a two-year investigation into the Russian group's allegedly unfair pricing practices in Lithuania and other Eastern European countries.

 

[Galad]

Russia’s gas concern Gazprom has what to be afraid of in Lithuania and the European Union (EU), Lithuania’s Energy Minister Rokas Masiulis has said.

Ever heard of something called contracts?Gazprom has absolutely nothing to fear-neither from Luthuania(country without value) nor from Brussels bureaucrats.Barking is one thing,going to court -entirely different thing.Lithuania and rest of Baltic "tigers" should concentrate upon who will pick up the bill for expensive LNG deliveries(hint for you-will not be Brussels) and how increased gas prices will affect already shrinking with each passing year local population.And EC should start build that pipeline down to Turkey-while there is still time left for it.

 

[flamer84]

Ever heard of something called contracts?Gazprom has absolutely nothing to fear-neither from Luthuania(country without value) nor from Brussels bureaucrats.Barking is one thing,going to court -entirely different thing.Lithuania and rest of Baltic "tigers" should concentrate upon who will pick up the bill for expensive LNG deliveries(hint for you-will not be Brussels) and how increased gas prices will affect already shrinking with each passing year local population.And EC should start build that pipeline down to Turkey-while there is still time left for it.

It's up to the Courts now.If they will win they will have that money,be it paid to them or from assets seizure.

 

[Galad]

It's up to the Courts now.If they will win they will have that money,be it paid to them or from assets seizure.

Of course.But contracts do matter in court not the rhetoric or wishfull thinking or wet dreams.Any EU court awarding damages based on rhetorics is done.Gazprom lawyers are more than competent so there will be no win for Luthania.Sure they can breach the contract and pay the fines and be free from "evil" Gazprom while importing much more expensive LNG.

 

[Hindustani78]

Of course.But contracts do matter in court not the rhetoric or wishfull thinking or wet dreams.Any EU court awarding damages based on rhetorics is done.Gazprom lawyers are more than competent so there will be no win for Luthania.Sure they can breach the contract and pay the fines and be free from "evil" Gazprom while importing much more expensive LNG.

What happened in Ukraine , the same things is happening with Lithuania


The Lithuanian Energy Ministry wants gas utility Lietuvos Dujos AB to join the state in arbitration proceedings against OAO Gazprom to force the Russian gas monopoly to reduce prices under a 1999 contract.

The terms of the 1999 contract are the basis for the new arbitration proceedings that the Energy Ministry, exercising its rights as a shareholder, is asking Dujos shareholders to approve, according to today’s statement.

Lietuvos Dujos shares were unchanged at 0.645 euro after the announcement as of 12:15 p.m. in Vilnius. Gazprom shares in London retreated from gains of as much as 1.3 percent and were up 0.8 percent at $8.37, data compiled by Bloomberg showed.

 

[Hindustani78]

Lithuania to earmark additional EUR 3.1m for litigation with Gazprom - EN.DELFI

Wednesday, April 1, 2015

The Lithuanian government plans to earmark additional 3.14 million euros for litigation with Russia’s Gazprom at the United Nations’ arbitration court (UNCITRAL, United Nations’ Commission on International trade Law).

The Finance Ministry would borrow the amount on behalf of the state and transfer it to the Energy Ministry which represents Lithuania in court.

In March 2012, Gazprom initiated international arbitration proceedings under the UNCITRAL arbitration rules, claiming that Lithuania breached its bilateral investment treaty with Russia by carrying out the unbundling of Lietuvos Dujos (Lithuanian Gas), in which the Russian company held a significant stake, in line with the EU Third Energy Package. The unbundling was finalized late in October.


In October 2012, Lithuania filed a 1.5-billion-euro arbitration claim in Stockholm against the Russian supplier for overcharging of gas supplies between 2004 and 2012. Energy Minister Rokas Masiulis said last week that the arbitration court was expected to rule on the government’s 1.5-billion-euro suit against Gazprom late this year or early next year.

Lithuania is represented in its dispute with Gazprom at the Stockholm and UN arbitration courts by law firms Lawin and Tark Grunte Sutkiene, as well as US-based Shearman&Sterling, one of the world’s biggest law firms.

In autumn 2012, the Energy Ministry and Shearman&Sterling signed two three-year contracts worth a preliminary 810,900 euros.

Litigation with Gazprom in international arbitration courts has already cost some 6.6 million euros to Lithuania.

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[Hindustani78]

Gazprom withdraws claim against Lithuania - EN.DELFI
BNS
Thursday, April 2, 2015

• Gazprom has withdrawn its claim against Lithuania over the implementation of the European Union’s (EU) Third Energy Package.
  Gazprom
  Foto: Reuters/Scanpix
  As a result, the arbitration court had terminated the proceedings initiated by Russia’s gas concern, the Energy Ministry said on Thursday, adding that such an outcome had been expected since the onset of the dispute.
  
  Gazprom initiated the proceedings back in 2012 as it sought to put on hold or prevent reorganization of Lietuvos Dujos (Lithuanian Gas), a Lithuanian natural gas utility then co-owned by the Russian gas giant.
  
  “Lithuania has always said that Gazprom’s claims and discontent are unfounded and Gazprom’s investment has not been affected. Lithuania has reformed its gas sector in pursuit of a strategic goal to create a diversified and efficient common gas market, where consumers have a choice and monopolies cannot abuse their dominant position,” the ministry said in a press release.
  
  It added that the termination of those proceedings would have no effect on another dispute between Lithuania and Gazprom, i.e., on the claim, which Lithuania had filed in Stockholm against Gazprom for overcharging of gas supplies between 2004 and 2012.

 

[Hindustani78]

Gazprom says arbitration case against Lithuania lost its relevance - EN.DELFI

Saturday, April 4, 2015

• Russia's gas giant Gazprom says that an arbitration suit it filed against Lithuania lost its relevance after it sold its stakes in Lietuvos Dujos (Lithuanian Gas) and Amber Grid for 164 million US dollars, more than it sought for in the arbitration case.
  
  The Russian group said this in a comment on Friday.
  
  After Gazprom withdrew its suit against Lithuania over the implementation of the EU's Third Energy Package, the arbitration court terminated the proceedings initiated by the Russians under the UNCITRAL (United Nations' Commission on International Trade Law) arbitration rules back in 2012.
  
  Lithuania last autumn completed the reorganization of its natural gas sector aimed at bringing it into line with the Third Energy Package requirements and Gazprom withdrew from the Lithuanian gas business.
  
  Gazprom claimed in its suit that Lithuania breached its bilateral investment treaty with Russia by carrying out the ownership unbundling of Lietuvos Dujos.

************************

 

[Hindustani78]

Vilnius court closes case on Gazprom's access to anti-trust fine documents - EN.DELFI
BNS
Tuesday, April 21, 2015

• A Vilnius court on Tuesday closed its hearing into a complaint filed by Gazprom over the Lithuanian competition watchdog's decision not to grant it full access to documents regarding an anti-trust fine of almost 35.7 million euros it imposed on the Russian gas giant.
  
  
  
  Gazprom
  © RIA/Scanpix
  "The court concluded that the Competition Council's decision had no legal consequences for Gazprom and even if the complaint were granted, the company's rights and obligations would not change and, therefore, the whole process would be meaningless," Sigita Jacinevičienė-Baltaduonė, spokeswoman for the Vilnius Regional Administrative Court, told BNS.
  
  
  The court on Jun. 2 is scheduled to start hearing another dispute between Gazprom and the Competition Council in respect of the 35.7-million-euro fine and the Russian company will then be able to ask for access to all materials of the anti-trust investigation.
  
  Gazprom asked the court to annul the Competition Council's decision of last June refusing to give the company full access to the case-file, saying that its right to defense had been infringed.
  
  The fine was levied last June after a two-year investigation related to plans by Lietuvos Energijos Gamyba (Lithuanian Energy Production) to conclude a natural gas swap deal with the Russian gas supplier.
  
  The competition watchdog's experts established during the investigation that Gazprom's refusal to negotiate with Lietuvos Energijos Gamyba on a natural gas swap deal in 2013-2015 prevented the Lithuanian company from purchasing cheaper gas from another supplier and thus breached a condition of a 2004 agreement on the acquisition and sale of shares in Lietuvos Dujos.
  
  
  

 

[Hindustani78]

Russian ambassador says EU's case against Gazprom is political and driven by Lithuania - EN.DELFI

Russian ambassador to the European Union has accused Lithuania of being the sole force behind the European Commission's investigation into possible market abuses by Gazprom. He also says the case against the Russian state-owned gas company is political.

Vladimir Chizhov

"What puzzled me from the beginning was that the whole case was initiated not by some economic entities, not by EU-based energy companies which could have theoretically complained about those contracts, but by the government of a member state which was at that time involved in arbitration with Gazprom," Vladimir Chizhov said in an interview to euractiv.com.

"It was Lithuania, that was made public, and they were making some very outspoken statements on that score, boasting of a success that they had achieved with the launch of this investigation. Which of course leaves the impression that the whole affair was political from the outset."

Chizhov says the case against Gazprom remains a political one.

The European Commission recently concluded a three-year investigation into Gazprom's practices in EU markets. Last week, the EC said the Russian company might have imposed unfair pricing policies and abused its dominant market position in several Central and Eastern European countries. Gazprom has rejected all accusations.

European Commissioner Margrethe Vestanger, in charge of competition, said last week that the EC's Gazprom investigation was not political.

 

[Hindustani78]

Lithuanian courts can refuse to recognize Stockholm arbitration decision on Gazprom, ECJ rules - EN.DELFI
Wednesday, May 13, 2015

• Lithuanian courts can decide whether or not to recognize a Stockholm arbitration award in a dispute between the Lithuanian Energy Ministry and Russia's gas giant Gazprom, the European Court of Justice (ECJ) ruled on Wednesday.
  
  Gazprom
  © RIA/Scanpix
  The so-called Brussels I Regulation "must be interpreted as not precluding a court of a member state from recognizing and enforcing, or from refusing to recognize and enforce, an arbitral award prohibiting a party from bringing certain claims before a court of that member state, since that regulation does not govern the recognition and enforcement, in a member state, of an arbitral award issued by an arbitral tribunal in another member state," the ECJ concluded.
  
  The judgement means that the arbitral award issued in 2012 will most probably not be recognized and enforced in Lithuania.
  
  Sigita Rudėnaitė, chairwoman of the Civil Matters Division at the Lithuanian Supreme Court, has told BNS earlier that even if the ECJ ruled that Lithuania cannot refuse to recognize the arbitral award based on the EU regulation, this could be done based on the New York Convention.
  
  
  The Lithuanian Court of Appeals did not recognize the arbitral award in December 2012 based on the convention.
  
  It is the Supreme Court, which is yet to examine the case, that will have the final say as to whether or not to recognize the arbitral award.
  
  The dispute centres on an action brought by the Energy Ministry in a Lithuanian court, seeking initiation of an investigation of the activities of Lietuvos Dujos (Lithuanian Gas) and its top executives - Valery Golubev and Kiril Seleznev of Gazprom and Viktoras Valentukevičius.
  
  The Arbitration Institute of the Stockholm Chamber of Commerce ruled in July 2012 that the Energy Ministry-initiated court probe breached in part the arbitration agreement contained in Lietuvos Dujos shareholders' agreement of Mar. 24, 2004 and ordered that the ministry withdraw some of its requests, including the one that the court should order Lietuvos Dujos to start negotiations with Gazprom on a fair gas price.
  
  All of the three executives have since left the company. Gazprom in May 2014 reduced the price of gas supplied to Lietuvos Dujos by 21 percent and sold its stake in the Lithuanian company.
  
  
  
  
  

 

[LordTyrannus]

this so called soft power is in fact nonsense if you dont have the hard power to underline it. And in fact usa and europe also lack any soft power aka money. they are drowning in debts while russia has nearly zero debts.

the last thing russia must do is switching back to state owned enterprises and producing consumer goods themselfs.

putin is just to lazy to make the right steps. he is lazy and overrated.

 

[Hindustani78]

this so called soft power is in fact nonsense if you dont have the hard power to underline it. And in fact usa and europe also lack any soft power aka money. they are drowning in debts while russia has nearly zero debts.

the last thing russia must do is switching back to state owned enterprises and producing consumer goods themselfs.

putin is just to lazy to make the right steps. he is lazy and overrated.

Russia External Debt 2011-2015

External Debt in Russia remained unchanged at 559.40 USD Billion in the first quarter of 2015 from 559.40 USD Billion in the first quarter of 2015. External Debt in Russia averaged 639.20 USD Billion from 2011 until 2015, reaching an all time high of 732.80 USD Billion in the second quarter of 2014 and a record low of 545.40 USD Billion in the fourth quarter of 2011. External Debt in Russia is reported by the Central Bank of Russia.