The CEO of Gazprom, Aleksey Miller, has stated that the ongoing legal action by Naftogaz, a Ukrainian state-owned energy company, against Russia is illegitimate. Miller made this declaration in response to Naftogaz’s recent move to file a case against Russia in the US, seeking $5 billion in compensation for damage and property loss in Crimea. Speaking to reporters in St. Petersburg, Miller argued that Russia cannot expect fair treatment in Western courts due to sanctions and anti-Russia sentiment. He deemed the arbitration proceedings surrounding Naftogaz’s case as “illegitimate” and stated that Russia’s participation in the process would be “pointless.”
According to Miller, Naftogaz has failed to fulfill its contractual obligations by blocking the transit of Russian natural gas to the EU via the Sokhranovka pumping station on the Russia-Ukraine border. Despite this, Naftogaz has demanded payment. Miller emphasized that such actions demonstrate a hostile attitude towards Russia. He warned that if Naftogaz continues with its litigation, Moscow may impose retaliatory sanctions, making any business relations between Russian companies and Naftogaz “impossible.”
It is worth noting that Gazprom still relies on Naftogaz’s infrastructure to supply gas for transit to Europe through the Sudzha pumping station. This transit route through Ukraine remains crucial for Russian supplies to Western and Central Europe, especially since the sabotage last year rendered the Nord Stream pipelines inoperable. Consequently, Russia’s gas supplies to the EU significantly declined last year due to sanctions and damage to Nord Stream.
The legal proceedings initiated by Naftogaz and five other Ukrainian oil and gas companies against Russia began in October 2016. Estimating its lost assets in Crimea at $5 billion, Naftogaz sought compensation, and hearings to determine the amount of compensation concluded in March 2022. In response, Russia stated that it would evaluate the ruling from The Hague court and decide on further actions accordingly.
The issue surrounding Crimea stems from the region’s referendum in 2014, in which it chose to join Russia after refusing to support the coup that toppled Ukraine’s elected government. The EU, along with the US and several other countries, labeled this move as an “illegal annexation” by Russia and imposed increasingly strict economic sanctions in response.
In conclusion, Gazprom’s CEO, Aleksey Miller, has dismissed Naftogaz’s legal action against Russia as illegitimate, citing unfair treatment and bias in Western courts. While Naftogaz seeks compensation for damage and loss in Crimea, Russia contends that Naftogaz has failed to fulfill its obligations and demonstrates a hostile attitude. The outcome of this dispute could have significant implications for the energy market and business relations between Russian companies and Naftogaz.