Germany’s Uniper has won arbitration proceedings against a Gazprom subsidiary

Germany’s largest gas importer, Uniper, has decided to terminate its gas supply contracts with a subsidiary of Russian energy giant Gazprom, legally ending its long-term relationship with the corporation on Wednesday.

Uniper launched arbitration proceedings against Gazprom Export in 2022, claiming damages due to undelivered gas supplies.

Only limited gas had been delivered since June 2022, and the company halted purchases completely in August of that year after the EU introduced sanctions on Moscow over the Ukraine conflict.

However, the long-term supply contracts between the two companies remained legally in force. Gazprom Export said at the time that it did not admit to breaching the contracts and pledged to dispute Uniper’s claim for compensation.

An arbitration tribunal in Stockholm issued a ruling earlier this month, awarding Uniper the right to terminate the contracts, the company said.

The utility posted a record loss of €19.1 billion (more than $20 billion) for 2022, citing the complete cessation of Russian gas supply as a major reason for the drop. The firm was nationalized in December 2022.

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The arbitration court awarded Uniper damages in the amount of more than €13 billion ($14 billion) for the losses. Any amounts recovered would flow to the German federal government, the statement added.

Russia’s share of EU gas imports fell from 41% in 2021 to 15% in 2023 in the aftermath of the Ukraine conflict and ensuing sanctions. Over the summer of 2022, the Nord Stream pipeline, which was once the main artery transporting Russian gas to Germany, saw a string of technical and maintenance issues linked to Western sanctions. The pipeline was eventually shut down in early September 2022. Later that month, the undersea pipeline was sabotaged by explosions, which are still being investigated.

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