Russian court declines to hear Czech company NET4GAS's appeal in dispute with Gazprom

The Supreme Court of the Russian Federation has declined to hear a cassation appeal by Czech company NET4GAS against a ban on continuing proceedings abroad against Russian gas company Gazprom Export. The TASS news agency reported this today, citing the arbitration case file. NET4GAS, which operates the gas pipeline network in Czechia, had previously said it would not comply with the ban, as it considers the Russian court rulings to be contrary to international law.

According to the case file, the Russian Supreme Court has now concluded that the arguments in the cassation appeal do not establish grounds for it to be heard. In March, the Arbitration Court of St Petersburg and the Leningrad Region upheld Gazprom Export's complaint against NET4GAS and banned the Czech company from continuing arbitration proceedings in a court in the Czech Republic over its dispute with the Russian company.

The Russian court also ruled at the time that, if it violated the decision, NET4GAS would have to pay the Russian company 112.96 million euros (nearly CZK 3 billion). NET4GAS filed a cassation appeal against the ruling in April. The arbitration court, however, upheld the ban.

In September, NET4GAS prevailed in a Czech arbitration court, which it had approached because Gazprom owed it payments for leasing gas pipelines. Under the arbitral award, Gazprom must pay the debt, along with interest for late payment and the costs of the proceedings.

At the beginning of 2023, NET4GAS said it had not received the latest monthly payments for use of the gas transmission system, as stipulated in its contracts with the Russian gas supplier. The Czech company also said that talks with the Russian company had failed and that it had decided to initiate arbitration proceedings against it.

NET4GAS operates 4000 kilometres of gas pipelines, five compressor stations and around 100 delivery stations, including three at the borders. It holds the exclusive licence to transport natural gas in the Czech Republic. It manages the gas system in emergencies and declares emergency levels, thereby deciding on gas supplies to customers. Any problems with NET4GAS's pipelines would pose a serious threat to gas supplies to the Czech Republic.