- Visiting speaker: Julia Sullivan
In February 2018, an arbitral tribunal in Stockholm, Sweden issued its final award in an epic, four-year legal battle between Ukraine’s Naftogaz and Russia’s Gazprom. The Russian energy giant had asserted $81.4 billion in total claims against Ukraine’s state-owned energy company, amounting to about 75% of the struggling nation’s gross domestic product. Instead, in a stunning legal victory of Ukraine, the tribunal ordered Gazprom to pay Naftogaz $2.56 billion. Within 24 hours of issuance of the final award, Gazprom cut off gas supplies to Ukraine, refusing to deliver prepaid volumes for March 2018, leaving thousands of people in the winter cold. This is consistent with Russia’s long history of using its vast energy resources to carry out a sanctions and incentives regime against Ukraine’s political leadership, punishing administrations that refuse to accede to Moscow’s wishes and rewarding the ones that do. Since 2014, economic sanctions have been combined with military operations which directly threaten the political independence of Ukraine, creating a serious risk that Europe (and its NATO allies) will be drawn into a broader conflict. Naftogaz v Ukraine has been called the “biggest commercial arbitration in history,” a characterization that reflects not only the amount of the dispute, but also the growing threat presented by Russia’s willingness to impose politically-motivated gas supply cut-offs at the same time Europe becomes increasingly dependent upon Russian gas. Can the international community insist that Gazprom comply with a rules-based system of international trade? Or will Russia continue to play power politics with energy?"
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