Lithuania to File Lawsuit Against Gazprom

Lithuanian Prime Minister Andrius Kubilius has said that Lithuania will be filing a lawsuit against Gazprom after, the country alleges, Gazprom overcharged it for gas between 2004 and 2012. 

Speaking after a Cabinet meeting on Wednesday, Prime Minister Kubilius said the decision to file a case at the Stockholm Arbitration Tribunal came on the back of Gazprom's refusal to engage Lithuania on negotiations to lower its prices to the country.

"The fact that the European Commission started an official inquiry into Gazprom's suspected unfair price policy in Central and Eastern Europe is of crucial importance," the Prime Minister said. "We have had several talks with the Gazprom management regarding this fact. We presented clear arguments and tried to convince them to adjust prices prior to any arbitral actions; however, [it was] to no avail."

Consequently, the company will now bring a case for LTL5 billion (approx. €1.4 billion) for the alleged overcharges imposed on it by Gazprom. The case will centre on changes made to a supply contract between Gazprom and Lithuanian gas company Lietuvos dujos in 2004. Under this contract, Gazprom had agreed to supply the company with gas "at fair prices that were set according to a gas price formula," a statement from the Lithuanian government said.

The statement says that Gazprom then changed the terms of the agreement, relating to the gas price formula, in violation of the existing agreement between the two companies. The pricing change was approved by Lietuvos dujos; however, the Lithuanian government points out that these board members were assigned by Gazprom and so could have acted in the best interests of Gazprom, rather than Lieuvos dujos, when approving the changes.

This is the second arbitration case Lithuania has been involved with with Gazprom this year. In March 2012, Gazprom took a case to the Stockholm Tribunal in a bid to protect its interests in Lithuania, it said. The results of that arbitration remain unclear, with both sides claiming victory in August this year.