RWE Transgas, the Czech unit of Germany's RWE, has won a landmark legal dispute with Gazprom over gas contracts, after a court ruled for the first time that a company did not have to pay fines under a "take-or-pay" clause.
The verdict is likely to play into the hands of Gazprom's disgruntled clients in Europe who may follow RWE and challenge “take-or-pay” claims from the Russian giant which fine them if they do not buy a minimum amount of gas.
The "take-or-pay" clause, introduced in contracts at the insistence of Gazprom, Russia’s gas export monopoly, obliges customers to pay for gas under the contract even if it is not imported.
A mild winter, an economic downturn or advancements in energy efficiency can result in less gas consumption than originally planned and contracted.
A spokesman for RWE Transgas, the republic's dominant gas importer, said on Wednesday (24 October) that the company had successfully fought off a claim from Gazprom in a court in Vienna.
"I can only confirm that RWE Transgas is the winner against Gazprom in the take-or-pay dispute over long-term contracts," RWE Transgas spokesman Martin Chalupsky told Reuters.
"We are pleased with the court's decision. It will reduce our financial burden resulting from the contract by triple digit million euros per year," he said in a further emailed statement.
A spokesman for Gazprom declined to comment. Interfax news agency, citing industry sources, said Gazprom tried to wrestle $500 million (€386.6 million) from RWE Transgas for failing to stick to the take-or-pay commitments in 2008-2011.
The verdict will deal another blow to Gazprom's business in Europe, where it covers a quarter of natural gas needs. Its European clients have often complained of high prices in Gazprom's long-term gas supply contracts.
"This is an unpleasant precedent for Gazprom, while it's a positive factor for its clients. An avalanche of similar cases involving Gazprom's counterparties cannot be ruled out," Constantine Cherepanov, a UBS investment bank analyst in Moscow, said.
The Russian state-owned company is the main or sole gas supplier for central and eastern European countries, including Bulgaria, Hungary, Poland and the Czech Republic.
Gazprom is already the subject of investigation by the European Commission over suspicions that it hindered the free-flow of supply across the continent (see background). It has agreed to revise its contracts with several leading European clients, including Germany's utility E.ON.
The world's top gas producer has returned more than 78 billion roubles (€1.92 billion) to its European clients in the year's first quarter as part of the contract dispute settlement. Gazprom has to repay a further €1 billion by the end of the year.
It has also been fighting off similar claims by Polish gas monopoly PGNiG.
Ukraine, a transit route of Russian gas to Europe, has already stated that it will not buy the previously agreed amount of gas from Gazprom.
"Gazprom had to give in to other clients' claims. This could be the case again," Cherepanov said.
Gazprom Export said today that it plans to appeal the decision handed down by the Supreme Court of Austria, the Moscow Times reported.
At a recent meeting with energy officials in the Kremlin, Russian President Vladimir Putin strongly warned them that they should adapt to the “change in the energy market configuration”.