Uniper has drawn a line under the dispute with the Russian state-owned company Gazprom and terminated its gas supply contracts with the Russians.

Last week, a Swedish court also awarded the German company damages amounting to 13 billion euros. Below is an overview of the background and consequences of these developments.

WHAT WAS THE DISPUTE ABOUT?

Germany had purchased gas from Russia for decades until the tap was abruptly closed with the outbreak of the war in Ukraine in February 2022. Uniper was then forced to buy gas on the spot market at significantly higher prices - and had to be rescued from collapse with state money. Uniper accused Gazprom of being responsible for its difficult economic situation and demanded compensation in a Swedish court. In return, Gazprom stated that it had stopped gas deliveries due to sabotage on the Nord Stream pipeline and broken turbines.

WHAT DOES THE COURT SAY?

The decision in the arbitration proceedings itself is not public. However, Uniper claims to have been awarded damages of 13 billion euros. In addition, Uniper can now terminate dormant gas contracts for the supply of 250 terawatt hours, some of which extend into the 2030s. According to insiders, this clears an important hurdle for the company's return to the stock market in 2025.

WILL UNIPER EVER GET MONEY FROM GAZPROM?

Very probably not. One possibility would be to seize Gazprom assets outside Russia, provided that the arbitration award is recognized in the respective country. According to an insider, however, there is hardly anything left to seize from the Russian company in the West after Gazprom divested its German subsidiary in 2022. Significant assets are currently still located in Uzbekistan, Vietnam, Algeria, Libya, Bolivia and Bangladesh - all countries that have not imposed sanctions against Russia due to the war in Ukraine. However, even if Uniper receives money from Gazprom, it is not allowed to keep it, but must pass it on to the German government as a major shareholder. Gazprom itself has not responded to the request for comment.

CAN UNIPER SEIZE PAYMENTS TO GAZPROM?

Theoretically yes, but only in countries where the arbitration award is recognized. However, such a step could lead to political entanglements. Among other things, Austria still receives Russian natural gas. Last year, the Austrian Gazprom subsidiary filed for insolvency because Uniper had asserted claims. At the end of May, Austria's OMV declared that it could be cut off from Russian gas supplies if it was obliged to make payments to a major European supplier due to legal requirements. According to an insider, this supplier is Uniper. As a precautionary measure, Hungary has already issued a decree preventing the seizure of payments to Gazprom.

(Report by Chris Steitz, Nina Chestney, Boldizsar Gyori, Vladimir Soldatkin and Ron Bousso, written by Christina Amann. Edited by Olaf Brenner. If you have any queries, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and the economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)