Applicability of “take-or-pay” in contract between Naftogaz and Gazprom to be determined in court

Naftogaz of Ukraine considers the “take-or-pay” clause as set out in the gas supply contract with Gazprom not market based, invalid and inapplicable. Naftogaz disputes the validity of this clause in the arbitration proceedings involving both companies in the Arbitration Institute of the Stockholm Chamber of Commerce.

The validity of any claims regarding the “take or pay” clause will be determined by the tribunal.

As of today, the total value of claims filed by Gazprom in relation to the “take-or-pay” clause constitutes USD 26.7 billion and covers the period from 2012 to 2014. In addition, Gazprom has proposed Naftogaz to pay USD 2.5 billion for 3Q 2015 referring to the same clause.