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January 09, 2018
Brattle Client Naftogaz Successful in Securing Set-Aside of Take-or-Pay Claims in Arbitration over Gazprom Contract

The Brattle Group’s client Naftogaz, the national oil and gas company of Ukraine, was successful in securing the set-aside of take-or-pay claims in the arbitration over their gas supply contact with Russia’s Gazprom.

Naftogaz initiated a dispute regarding the price it was paying for gas to Gazprom and Gazprom counter-claimed in respect of the gas that Naftogaz had been unable to consume but for which it was committed to pay. The result was Naftogaz faced a claim for more than $44 billion in “take-or-pay” penalties.

Brattle economists Serena Hesmondhalgh and Carlos Lapuerta were instrumental in achieving a retrospective reduction in the contract price that amounted to nearly 30% in mid-2014 and having the take-or-pay claim completely dismissed, essentially on competition grounds.