Successfully defended Gazprom in major SCC arbitration

Motieka & Audzevičius has once again successfully represented OAO Gazprom in major SCC arbitration against Lithuania.

This was the largest arbitration case for Lithuania so far, exceeding staggering amount of 1,5 billion EUR. Lithuania, represented by its Ministry of Energy, had claimed that Gazprom had allegedly violated its undertaking to supply gas to Lithuania “at fair prices” and on the basis of a gas price formula set out in a 2004 Share Sale and Purchase Agreement privatising Lithuanian gas provider Lietuvos Dujos – in which both Lithuania and Gazprom had a stake (17.7% and 37.1% respectively). As such, according to Lithuania, Gazprom was selling gas to its consumers at unfair prices for nearly a decade.

Lithuania alternatively claimed either a remedy for defective performance of its obligations under the Share Sale and Purchase Agreement by, at a minimum, reimbursing the amounts overcharged based on an unfair price, in the amount of no less than 1,5 billion EUR; or damages in the amount of no less 1,5 billion EUR; or restitution of the amounts unlawfully paid by its consumers in the amount of no less 1,5 billion EUR.

Together with the world’s mega law firm Dentons, Motieka & Audzevičius had successfully rebutted all claims put forward by Lithuania in its claim. The tribunal, composed of some of the biggest names in arbitration, namely: William W. Park, John Beechey and Jernej Sekolec (Chairman of the Arbitral Tribunal), had dismissed Lithuania’s claim on all counts, including that an inherent conflict of interest of being both – a supplier and a shareholder of Lietuvos Dujos – was effectively consented by Lithuania when it asked Gazprom to become a shareholder of the company.