In a significant development, an International Chamber of Commerce (ICC) tribunal has issued an injunction preventing Russia’s state-owned energy giant Gazprom (GAZP.MM) from pursuing legal action in Russian courts against Czech energy company CEZ (CEZP.PR). This ruling, announced by CEZ on Thursday, underscores the ICC’s jurisdiction over disputes between the two companies, following a contractual agreement to settle disagreements through arbitration rather than national courts.
The dispute stems from a claim CEZ filed in February 2023, seeking approximately 1 billion Czech crowns (around $44 million) in compensation from Gazprom. CEZ contends that Gazprom failed to deliver the contracted volumes of natural gas in 2022, a year marked by Russia’s invasion of Ukraine and subsequent disruptions to global energy markets. The energy crisis heightened tensions between Moscow and European countries, many of which had previously relied heavily on Russian gas.
Gazprom, however, countered by filing lawsuits in Russian courts, aiming to shift the venue of the legal battle from international arbitration to domestic courts. CEZ responded by requesting an interim measure from the ICC tribunal to prevent Gazprom from proceeding with these domestic cases, citing the arbitration clause embedded in their contract. The tribunal sided with CEZ, affirming that disputes related to gas supplies must be settled through ICC arbitration.
CEZ welcomed the decision, stating that the tribunal’s ruling reinforced the pre-agreed legal framework between the two companies. “The Tribunal granted our request, confirming that disputes between the companies should be resolved in ICC arbitration, not in front of Russian courts,” the Czech company said in its statement.
The ruling comes amid broader legal battles involving Gazprom and European energy firms. Last month, Gazprom launched lawsuits against several companies, including CEZ, in an effort to move legal proceedings away from international arbitration forums. In a parallel case, a Russian court ruled that Austrian energy company OMV Gas Marketing and Trading GmbH (OMVV.VI) could not pursue arbitration proceedings in Stockholm against Gazprom’s export subsidiary. The Russian court also imposed a threat of fines amounting to 575.2 million euros on OMV, a decision that OMV has dismissed as illegitimate.
The deteriorating energy ties between Russia and Europe have reshaped the continent’s energy landscape. The Czech Republic, which had previously depended almost entirely on Russian gas, especially through the Nord Stream pipeline via Germany, saw its supply slashed in 2022 as Russia reduced gas exports amid escalating geopolitical tensions. Since then, the Czech Republic has diversified its energy sources, replacing Russian gas with supplies from pipelines and liquefied natural gas (LNG) imports from other countries.
This latest arbitration ruling marks another chapter in the ongoing legal and energy disputes between European energy firms and Russia, as the fallout from the Ukraine war continues to impact cross-border commercial relationships. Gazprom has yet to respond to the ICC tribunal’s decision.
