By Christoph Steitz
FRANKFURT (Reuters) -German utility Uniper has won a multi-billion euro arbitration against former long-time supplier Gazprom, it said on Wednesday, allowing it to tear up dormant gas supply contracts and potentially setting a precedent for similar cases.
The ruling marks a landmark victory for Uniper, which had to be rescued by the German government in 2022 after Gazprom first cut and later suspended supplies, forcing the group to buy replacement volumes at sky-high prices on the spot market.
It also severs the last remaining ties of what was a decade-long energy partnership between Berlin and Moscow, which came to an abrupt halt in the wake of Russia’s attack on Ukraine in 2022.
Uniper said the ruling by the arbitration tribunal in Stockholm on June 7, part of a process the company launched in late 2022, enabled it to terminate existing gas supply contracts, which legally still exist even though no gas is flowing.
The tribunal also awarded the firm more than 13 billion euros ($14 billion) in damages for the gas volumes not supplied by Gazprom since mid-2022, when the Russian state-owned group first cut contractually agreed deliveries.
Sources told Reuters last month that the arbitration tribunal could allow Uniper to terminate the 250 terawatt hours in dormant Russian gas contracts, some of which run until the middle of the next decade.
Cancelling those will remove a major risk ahead of Uniper’s planned return to the stock exchange next year, the sources said at the time.
“This ruling provides legal clarity for Uniper. With the right of termination that we received in the arbitration ruling, we are ending the contracts with Gazprom Export,” Uniper CEO Michael Lewis said in a statement.
Gazprom did not immediately reply to a request for comment.
The damages award primarily marks a symbolic victory for Germany, as it is unlikely that large sums will flow, legal sources told Reuters last month, something CEO Lewis confirmed.
Gazprom Export, the Russian company’s exporting arm, successfully challenged the case in a St Petersburg court, which ruled in March that Uniper and a subsidiary would be fined 14.3 billion euros should they proceed with the arbitration.
If any money flows, it will go to the German government, which holds more than 99% of Uniper.
Germany’s Finance Ministry, which oversees the government’s stake in Uniper, was not immediately available for comment.
Terminating the contracts removes the last risk Uniper faced with regard to its Russian exposure after the group wrote down its financing in the Nord Stream 2 pipeline as well as the holding in its Russian subsidiary Unipro.
($1 = 0.9311 euros)
(Reporting by Christoph Steitz; Additional reporting by Andrey Sychev and Riham Alkousaa; Editing by Matthias Williams and Jan Harvey)
