NET4GAS rejects St Petersburg ruling: Russian ban on EU arbitration cannot be recognised

The ban on Czech gas pipeline operator NET4GAS continuing arbitration proceedings against Russian company Gazprom before an arbitration court in the Czech Republic, issued on Monday by an arbitration court in Russia's St Petersburg, cannot be recognised in the European Union. NET4GAS told CTK today that it has also taken further measures to protect its interests in both Russia and the Czech Republic. The dispute with the Russian company should therefore continue.

Disputes between the Czech gas pipeline operator and the Russian gas group have been ongoing for several years. Two years ago, NET4GAS announced that it had prevailed in its dispute with Gazprom before a Czech arbitration court. The Czech company turned to the court because the Russian company owed it payments for leasing gas pipelines. The arbitration court ruled that Gazprom must pay the debt, including late-payment interest and legal costs.

On Monday, however, the Russian arbitration court upheld a complaint by Russian gas companies Gazprom and Gazprom Export and barred NET4GAS from continuing arbitration proceedings against the Russian side before the Arbitration Court attached to the Czech Chamber of Commerce and the Czech Agrarian Chamber. Otherwise, according to the Russian court, the Russian companies may seek fines worth billions from NET4GAS. Russian courts have recently been taking a similar approach towards foreign companies, arguing that anti-Russian sanctions imposed over Russia's invasion of Ukraine make it impossible for Russian companies to receive a fair trial abroad.