Uniper, a prominent German energy company, announced on Wednesday that it had been awarded over 13 billion euros ($14 billion) in damages by a tribunal for the failure of Russian state energy company Gazprom to deliver gas as per their contractual agreements. This ruling grants Uniper the authority to terminate the contracts and awards them significant compensation for the gas volumes that were not supplied.
CEO Michael Lewis expressed uncertainty regarding the likelihood of receiving substantial amounts from Gazprom in light of the ruling. The decrease in gas supplies to Germany by Gazprom following Russia’s invasion of Ukraine in 2022 led to a surge in gas prices, causing Uniper, Germany’s primary gas importer, to face financial challenges and come close to bankruptcy. Consequently, Uniper reported a substantial net loss of 40 billion euros in the first nine months of 2022, marking one of the largest losses in German corporate history.
Due to the reduced supply from Russia, Uniper had to procure gas at higher prices from the open market, putting additional strain on its financial health. Fearing the repercussions of Uniper’s potential failure on the economy, the German government intervened and decided to nationalize the company. Uniper took legal action against Gazprom at a tribunal in Stockholm in November 2022 for failing to deliver the agreed-upon gas volumes.
Despite Gazprom ceasing all gas supplies to Uniper in August 2022, the supply contracts were still legally binding and were set to continue until the mid-2030s. The tribunal’s decision has provided Uniper with legal clarity on the situation. Any damages awarded would be directed to the German federal government, which had provided financial support to Uniper during its crisis. CEO Lewis emphasized that the tribunal’s ruling has brought definition to the situation and paved the way for potential compensation to cover the losses incurred by Uniper.
