Lithuanian Energy Ministry & Gazprom Both Claim Victory in Arbitration Decision

Russian major Gazprom and the Lithuanian Energy Ministry have both claimed victory against the other following a ruling in an arbitration case taken by Gazprom against the ministry.

In separate statements released late on the night of the 31st of July, both sides said that the judgement had been positive in each's favour, praising the decision of the Arbitration Institute of the Stockholm Chamber of Commerce which heard the case.

Gazprom said in its statement that the Arbitration Institute had moved to portect Gazprom's rights, "having declared that the case filed with the Vilnius Court of Commercial Arbitration partially violated the Lietuvos Dujos Shareholders Agreement."

The company also said that the court agreed with Gazprom that the terms of conditions governing the relationship between between Gazprom and Lietuvos Dujos, a Lithuanian gas company in which Gazprom has a 37 per cent stake, could only be dictated by the Shareholders' Agreement of the Lietuvos Dujos shareholders. Gazprom says that the court rule that the Lithuanian authorities could not bring the case to Lithuanian court to force an amendment to the terms and conditions of the agreement for the purchase and transit of Russian (Gazprom) gas. As part of this ruling, Gazprom said, the Lithuanian Ministry of Energy was obliged to withdraw its allegations against Gazprom from Lithuania's Vilnius District Court.

However, in a statement on the same day, the Lithuanian Ministry for Energy declared that the arbitartion case had ruled in the ministry's favour and had permitted it to bring a case tthrough the Lithuanian court system.

"The final decision of arbitral tribunal has confirmed the right for Lithuanian Government to initiate an investigation concerning Lietuvos Dujos' activities in the Vilnius District Court," the statement said. "Also, [the] arbitral tribunal dismissed all of Gazprom’s claims for damages."

According to the ministry, the arbitration tribunal said that Gazprom could in no way impact upon the ministry's right to examine the management structure of Lietuvos Dujos, the main gas supplier in Lithuania.

"Arbitration acknowledged that Gazprom can by no means prohibit Lithuanian Government to question the eligibility of Lietuvos Dujos’ management bodies," the statement read.

However, the Ministry of Energy said, the court also ruled that negotiations on the high gas price of Russian gas to Lithuania should not be taken through the courts but must be submitted to Stockholm arbitration.

The Lithuanian Ministry of Energy and Gazprom have been involved in the arbitration process since March this year, when Gazprom said it would take a case against the ministry to protect its investments in the country and in Lietuvos Dujos.

Lietuvos Dujos in the main supplier of gas to the Lithuania market. Because of the Third Energy Package, the company is in the process of having its supply, distribution and transport arms separated.