The Stockholm Chamber of Commerce. Photo: Hasse Holmberg/TT
As Ukraine has proved unable to pay for their Russian gas consumption, the dispute will be settled in a Stockholm court.
Russian gas giant Gazprom demanded on Monday that Ukraine pay for gas supplies after a bill for $4.5 billion has gone unsettled. Russia is demanding at least $1.95 billion upfront from the Ukraine gas company, Naftogaz.
The two nations now will fight it out in the Arbitration Institute of the Stockholm Chamber of Commerce (SCC, Stockholms Handelskammares Skiljedomsinstitut).
"The SCC is the world’s oldest still-active arbitration institute, founded in 1917," law professor Eric Bylander of Uppsala University told The Local. "Stockholm became a popular location for arbitration cases during the Cold War, since Sweden was neutral and had several skilled arbitrators who spoke Russian."
Arbitration issues settled in Stockholm are recognized in almost every country in the world ever since the New York Convention was passed. This, the SCC notes on its home page, is a clear advantage when dealing with cross border business contracts.
"Bribery and political pressure on courts are relatively rare in Sweden," said Bylander, who added that the SCC's work is a large contributing factor to Sweden's reputation for being non-corrupt.
"They want the case decided in a neutral country. This conflict doesn’t have anything to do with Sweden, and that’s part of the point."
Bylander added that the judges who decide the case are not necessarily Swedish, although members of a Swedish court.
It is unclear when the arbitration will begin. The Stockholm Chamber of Commerce, which works with settling both domestic and international disputes, declined to comment on the issue.
Gazprom, which is owned by the Russia state, said in a statement that natural gas will now only be supplied to Ukraine in prepaid volumes.
"Gazprom has already taken and will be taking all possible efforts aimed at preventing potential disruptions of gas supply to European consumers," it added.