Well dear readers, Yulia Tymoshenko…….and the less than united opposition…….are demanding an international inquiry into the Yanukovych/Azarov government’s inability to win in Stockholm, thus justifying and indemnifying her past actions as Prime Minster against RosUkrEnergo and her nemesis Dmitry Firtash.
The Stockholm Court of Arbitration ruling has now been publicised, but as yet I have not been able to find a transcript to post here.
However, from what I am led to understand from those within Ukraine, the issue seems to rest with a wrongful assumption by the Tymoshenko government over debts by RosUkrEnergo to Gazprom of the princely sum of $1.7 billion.
When Mr Putin and Ms Tymoshenko agreed to remove RosUkrEngro as a middleman, Gazprom transferred the right of recovery of a US$1.7-billion debt, owed by RUE, to Naftogaz.
Ms Tymoshenko effectively took this to mean that Naftogaz Ukraine, that at the time was facing a price of US$360 per 1,000 cm for new gas supplies from Russia, double the price from the fourth quarter of 2008, could take Title to this gas from RUE as payment of that debt, meaning that Naftogaz de facto “paid” a price of US$154 per 1,000 cm for the gas.
As is so often the case, to assume makes an ass of you and me……no, seriously it does. Look….. ass/u/me…..see!
RUE, however, claimed that Naftogaz expropriated the gas in storage, and that such a move was never part of any deal. Any resulting transfer of Title of this gas in storage prevented RUE from fulfilling the terms of its own export contracts with clients in Poland and Hungary.
The Stockhom Court agreed that the Tymoshenko government wrongly made that assumption, RUE never officially transfered Title (the legal ownership document for any commodity) hence, RUE won their case.
Nowhere do I see case for prosecuting those which tried to defend the Naftogaz cause or anyone in the current government based on what I have been told from those with knowledge of the matter. In fact, I do not see how the Naftogaz Ukraine position was even defendable as your either hold Title……or you don’t.
Maybe, however, when I get a chance to see and peruse the actual Court judgement there will be grounds for such a claim……however, contracts are contracts and agreement are agreements and Title is Title……you cannot simply seize Title of gas owned by RosUkrEenrgo without a court process or agreement to sign it over.
Herein was the problem and whomever made such a schoolboy error over simply assuming Title without agreement or court order is to blame.
As holding Title is a legal document that has to be signed over when you sell the commodity, there is not much defending of what is tantamount to commodity theft, as RosUkrEnergo never transfered Title of the gas to Naftogaz Ukraine.
In a further act of bad judgement, Ms Tymoshenko and the BYuT today will enter a bill into parliament (which hopefully will not get through) banning the fulfillment of the Stockholm court ruling.
It is hard enough to get serious foreign investment into Ukraine without Ukraine then demonstrating that when a nominated foreign and neutral court makes a ruling, Ukraine will simply not carry it out if it does not like the outcome.
Ms Tymoshenko needs to think carefully before submitting this bill for it has implications over her claim to be transforming her party into a “European democtratic party” and European democratic party’s recognise the “rule of law” whether they like the outcome or not.
Also, should she ever get back into power, nobody from outside Ukraine will ever believe her assurances relating to the safety of their investments in Ukraine under her watch……assuming they would after her dealings with the IMF anyway.