Navigating International Arbitration in Power Generation: Key Insights for Dispute Resolution and Asset Protection

Aleksey Shtivelman

Tue, Mar 11, 2025, 8:34 AM 4 min read

The Uniper Global Commodities SE (Uniper) quality highlights geopolitical and ineligible risks successful volatile markets. Uniper, erstwhile Germany’s apical Russian state importer, was nationalized aft it faced fiscal chaos erstwhile Russia chopped supplies successful 2022. Uniper past sought arbitration against Gazprom Export (Gazprom) to extremity its declaration and assertion damages. Despite winning, a Russian tribunal changeable backmost astatine Uniper with a $14 cardinal fine, raising doubts astir enforcing arbitral awards against Russian state-owned entities, whether punishment judgments are enforceable extracurricular of Russia, and highlighting the hazard of imaginable plus seizures, particularly for Uniper’s liquefied earthy state (LNG) vessels operating astir the world.

The Uniper lawsuit shows however governmental tensions and sanctions tin make unanticipated ineligible risks. Uniper ended its contracts with Gazprom aft a Swedish arbitration tribunal awarded them €13 cardinal for undelivered gas. In return, a Russian tribunal (the Arbitrazh Court of St. Petersburg and Leningrad Region) countered with a €14 cardinal penalty, claiming overseas restrictions prevented Gazprom from having entree to justice, making the arbitration grant unenforceable. The determination was based connected articles 248.1 and 248.2 of the Russian Arbitration Procedure Code, which let Russian courts to assertion exclusive jurisdiction implicit disputes involving Russian entities taxable to overseas restrictive measures. While the providence of this portion of the Russian Arbitration Code whitethorn beryllium disputed, it is surely conceivable that involving sanctioned entities successful an arbitration tin enforce definite obstacles—for example, attorneys, arbitrators, oregon different counterparties whitethorn request to get a circumstantial license, specified arsenic from an applicable authorities agency, earlier they whitethorn proceed with an arbitration involving a sanctioned entity. In the Russian Arbitrazh Court, Gazprom argued that restrictive measures by overseas states rendered the arbitration statement unenforceable, arsenic it constricted the company’s entree to justice. The tribunal agreed with Gazprom and held that the restrictive measures imposed by overseas states so make barriers to justness for Russian entities, which warrant the Russian Arbitrazh Court assuming jurisdiction of the quality successful arbitration. The imposition of specified a punishment by a tribunal that Uniper did not hold to for resolving this quality contradicts the explicit presumption of the parties’ agreement. Uniper whitethorn besides contention the Russian Arbitrazh Court’s taxable substance jurisdiction implicit the quality and its idiosyncratic jurisdiction implicit Uniper, and the applicability of the Russian Arbitration Procedure Code to the quality betwixt Uniper and Gazprom, among different issues. Nevertheless, adjacent if Uniper successfully overcomes this ruling, enforcing awards against state-linked entities similar Gazprom to cod its damages whitethorn beryllium complex. In the meantime, Uniper is reportedly working, defensively, to support its fleet of LNG tankers from seizure by nations affable to Russia. Yet, different companies person been palmy successful navigating the usage of arbitral awards against state-linked entities, including Gazprom. As 1 example, successful November 2024, Austrian vigor institution OMV Gas Marketing & Trading GmbH (OMV) secured an arbitral grant of much than $230 cardinal from the International Chamber of Commerce (ICC) owed to irregular state supplies from Gazprom to its German subsidiary. To enforce this award, OMV offset the magnitude against payments owed nether its Austrian state proviso declaration with Gazprom. This self-enforcement method efficaciously allowed OMV to retrieve the awarded sum without initiating abstracted ineligible proceedings. Of course, questions stay arsenic to whether Gazprom would situation specified action.