Prime Minister on the lawsuit filed against Gazprom: Lithuania is following suit


2012 10 03


Lithuania decided to file a lawsuit against the Russian gas company Gazprom at the Stockholm Arbitration Tribunal. The dispute concerns LTL 5 billion overcharged for the gas supplied by Gazprom to Lithuania according to relevant agreements.

After the Cabinet’s sitting, Prime Minister Andrius Kubilius pointed out that German and Polish companies that brought actions against Gazprom at the Stockholm Arbitration Tribunal achieved consensus with Gazprom which agreed to retroactively adjust prices.

“In this respect Lithuania is following suit”, said the Prime Minister.

“The fact that the European Commission started an official inquiry into the Gazprom’s suspected unfair price policy in Central and Eastern Europe is of crucial importance. We have had several talks with the Gazprom management – including the talks that took place in this building – regarding this fact. We presented clear arguments and tried to convince them to adjust prices prior to any arbitral actions, however, to no avail”, stated the Prime Minister.

Pursuant to public terms of privatisation and the agreement on the privatisation of AB Lietuvos dujos of 2004, Gazprom undertook to supply natural gas to Lithuania at fair prices that were set according to a gas price formula, provided in the then agreement on gas supply that was entered into between AB Lietuvos dujos and Gazprom.

As a result of changes in the gas price formula, made violating terms of the agreement, the price of the gas supplied by Gazprom soared in the period between 2004 and 2012. The changes in the gas price formula were approved by the board members of the AB Lietuvos dujos, who were assigned by the Gazprom. These board members could have acted in the interest of Gazprom rather than AB Lietuvos dujos, when casting their vote regarding amendments to the gas supply agreement.

Lithuania filed a claim for the first time, however, it is worth mentioning that previously Gazprom addressed the Stockholm Arbitration Tribunal twice regarding an investigation into operations of the AB Lietuvos dujos and the related interim measures.

In July 2012, the Arbitration Tribunal dismissed Gazprom’s claims for damages. Moreover, the Tribunal stated that aspects of the application of the gas price cannot be considered by national courts. Therefore, today these claims have been filed at the Stockholm Arbitration Tribunal.