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Russian-EU gas contracts affected by the war--arbitration and the dollars v. rubles - Donesia - 03-31-2022
Russian-EU gas contracts affected by the war--arbitration and the dollars v. rubles dispute
‘Lengthy arbitration’ risk
CNBC: ... a failure to resolve the ruble payments stand-off would result in a lengthy arbitration process.
Companies have long-term contracts with Gazprom. If there is a clause within these contracts allowing companies to switch currencies to pay in rubles, this could be one possible outcome. If there is no clause, however, the terms of the contract prevail, most likely in either euros or dollars — and this cannot be changed.
In this latter scenario, Gazprom “would need to ask for a formal renegotiation of the terms of the contract, but I would not expect buyers to agree, and you would end up with a lengthy arbitration.”
Status: pre-arbitration negotiations occurring