THE AUTHOR:
Esen Aydin, Legal Content Manager at Jus Mundi
Arbitration Aftermath with Zeyad Abouellail and Esen Aydın: Your trusted source for the latest post-award developments in the dynamic world of investor-State and commercial arbitration. Back with a fresh perspective, Zeyad focuses on cases involving States, ministries, and public entities, while Esen handles disputes between private parties. From settlements and compliance with awards to recognition, enforcement procedures, annulment, and beyond. Each week, we bring you global insights and updates to navigate this ever-evolving landscape.
Gasum v. Gazprom Export
Svea Court of Appeal Grants Partial Annulment in Major Gas Supply Arbitration
Ad hoc Arbitration
Tribunal: Juan Fernández-Armesto (President), Yves Derains (Appointed by the claimants), Klaus Peter Berger (Appointed by the State)
Seat of arbitration: Stockholm, Sweden
On 10 January, the Svea Court of Appeal granted Gasum’s application to partially annul the Final Award, setting aside the payment order to Gazprom Export on the grounds that the tribunal failed to address Gasum’s EU competition law arguments.
Background
Gasum, a Finnish state-owned company, and Gazprom Export, a Russian gas supplier, were parties to a long-term natural gas supply contract. The contract required Gazprom to deliver minimum annual quantities of gas to Gasum. Disputes arose regarding Gasum’s obligations to purchase these minimum quantities, especially as demand for Russian gas declined due to market conditions and the impact of EU sanctions following Russia’s invasion of Ukraine.
In May 2022, Gasum commenced arbitration in Stockholm, seeking relief from its contractual obligations and contesting the validity of the minimum purchase requirements. Gasum argued that the contract’s provisions were anti-competitive under EU law. Gazprom challenged the claims, seeking enforcement of the contract and payment for undelivered minimum quantities.
The arbitral tribunal in its Final Award issued on 14 November 2022, ordered Gasum to pay over EUR 100 million to Gazprom Export for failing to meet its minimum purchase obligations. The tribunal dismissed Gasum’s claim that the Russian company had abused a dominant position in breach of Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).
Grounds for Annulment
Gasum challenged the award before the Svea Court of Appeal, arguing that the tribunal had failed to consider its arguments based on Article 101 of the TFEU. Gasum contended that the arbitral tribunal had not examined its claim that the minimum annual quantity (“MinAQ”) obligation in the contract was invalid under Article 101 TFEU, which prohibits anti-competitive agreements.
Gazprom responded that the tribunal’s approach was based solely on how Gasum had presented its arguments, suggesting that Gasum had not sufficiently maintained or substantiated its Article 101 TFEU claim during the arbitration. Gazprom also argued that the tribunal had adequately addressed the relevant competition law issues as presented by Gasum, since it had ruled on claims under Article 102 TFEU concerning Gazprom’s alleged abuse of a dominant position.
The Svea Court of Appeal found that Gasum had explicitly requested the tribunal to assess the validity of the MinAQ obligation under Article 101 TFEU and had provided supporting facts for such an assessment. The court pointed out that an extensive purchasing commitment that does not amount to an abuse of dominant position within the meaning of Article 102 of the TFEU may still constitute an agreement prohibited by Article 101. The court determined that the arbitral tribunal had not conducted any substantive review of the claim, which constituted an excess of mandate under Swedish arbitration law.
The court further reasoned that the failure to address this ground was likely to have affected the outcome of the arbitration, given the mandatory nature of EU competition law and the seriousness of the omission. The court was unconvinced by Gazprom Export’s argument that Gasum’s arbitration pleadings referring to Article 101 of the TFEU were merely made in support of the main claim that Gazprom Export had abused its dominant position. The Court emphasized that the tribunal had a duty to clarify the scope of the claims if there was any uncertainty.
As a result, the court upheld Gasum’s challenge, set aside the relevant parts of the arbitral award, and ordered Gazprom to compensate Gasum’s legal costs.
Taleveras Petroleum v. Nigeria LNG
Court Dismisses Nigeria LNG’s Appeal Challenging Indemnity Owed to Taleveras in Related Arbitrations
Institution: LCIA (London Court of International Arbitration)
Applicable Rules: UNCITRAL Arbitration Rules 2013
Tribunal’s composition: John Beechey (President), J. William F. Rowley (Appointed by the claimant), Nevil Phillips (Appointed by the respondent)
Seat of arbitration: London, United Kingdom
In a recently published judgment, the Court of Appeal of England and Wales upheld an enforcement order confirming an award requiring Nigeria LNG to pay USD 24 million in damages to Taleveras and to indemnify it for liabilities arising from related arbitrations.
Background
Taleveras and Nigeria LNG (“NLNG”) agreed in 2020 on the sale of 19 cargoes of LNG. Disputes arose when NLNG failed to deliver the agreed cargoes, prompting Taleveras to claim damages for lost profits and seek indemnification for liabilities resulting from on-sale arrangements with third parties, particularly Vitol and Glencore.
Taleveras initiated arbitration proceedings under the UNCITRAL (United Nations Commission on International Trade Law) Arbitration Rules in February 2021. The arbitration centered on whether NLNG was liable for the undelivered cargoes and whether Taleveras was entitled to indemnification for liabilities incurred in related arbitrations with Vitol and Glencore.
The arbitral tribunal, in its final award rendered on 30 January 2023, found NLNG liable for failing to supply the LNG cargoes and ordered it to pay Taleveras USD 24 million in lost profits. Additionally, the tribunal ordered NLNG to indemnify Taleveras for any amounts it was found liable to pay in the Vitol and Glencore arbitrations, including damages, interest, and legal costs.
The tribunal’s orders and the interpretation of the indemnity provision subsequently became the subject of further litigation before English courts.
High Court Decision
NLNG sought a declaration of non-liability and an injunction from the High Court of Justice of England and Wales to prevent Taleveras from enforcing the indemnity provision. It argued that its obligation to indemnify Taleveras was conditional upon endorsement by the tribunals in the related arbitrations—a requirement it claimed was referenced in paragraph 607 of the arbitral award’s analysis. NLNG maintained that, without such endorsement, the indemnity could not be enforced.
High Court of Justice of England and Wales held on 31 July 2024 that the indemnity awarded to Taleveras by the arbitral tribunal was not contingent on any endorsement by the Vitol or Glencore arbitral tribunals, finding that the dispositive section of the award was comprehensive and determinative. The court therefore dismissed NLNG’s claim and granted Taleveras permission to enforce the award.
Court of Appeal Decision
NLNG appealed the High Court’s decision, and the case was brought before the Court of Appeal of England and Wales. In its analysis, the Court of Appeal considered NLNG’s argument that the endorsement requirement mentioned in paragraph 607 of the award constituted an operative order.
The Court rejected NLNG’s view, holding that paragraph 607 did not introduce any new requirement beyond what was already addressed in the dispositive section. It noted that the dispositive section expressly referred to an endorsement requirement, but only in the context of consent awards. If paragraph 607 were interpreted more broadly to apply to all awards, the Court said this would create a conflict with the dispositive section. In such cases, the dispositive section takes precedence.
The Court concluded that any disputes regarding the scope or application of the indemnity should be resolved directly between Taleveras and NLNG, either through further arbitration or enforcement proceedings, rather than by the tribunals in the related arbitrations. Accordingly, the Court dismissed NLNG’s appeal, affirming that the indemnity was enforceable without further endorsement from Vitol or Glencore tribunals.
Favariz v. Talco & Hamer v. Talco
Singapore Court Refers Dispute Over Settlement of Former Zurich Chamber of Commerce Award to SCC Arbitration
ZCC Case No. 600097-2007
Institution: ZCC (Zurich Chamber of Commerce)
Tribunal: Henri C. Álvarez (President), Wolfgang Peter (Appointed by the claimants), Veijo A. Heiskanen (Appointed by the respondent)
Seat of arbitration: Zurich, Switzerland
The Singapore International Commercial Court (“SICC”) issued a decision staying an enforcement action brought by the assignee of a Zurich Chamber of Commerce (“ZCC”) award and ordered Talco to commence SCC Arbitration Institute (“SCC”) arbitration proceedings under a Deed of Settlement related to the enforcement of the award.
Background
Hamer Investment (“Hamer”) and state-owned Tajik Aluminium Plant (“Talco”) were parties to two barter agreements concluded in 2003. The agreements, effective from 1 May 2003 until 24 December 2004, were part of a broader pattern of commercial arrangements involving the supply of raw materials, equipment, and services to Talco in exchange for finished aluminium.
On 31 May 2007, Hamer commenced arbitration proceedings before the ZCC, seeking remedies for Talco’s alleged breaches of contract. Talco contested the claims, arguing that it had complied with its contractual duties and raising defences concerning the interpretation and execution of the agreement.
In its Final Award, the tribunal awarded more than USD 100 million to Hamer for breach of barter agreements by Talco. Subsequently, Hamer assigned the award’s proceeds to Favariz as part of a broader settlement. Under the Settlement Deed, a Talco subsidiary agreed to purchase a property for USD 150 million. In return, Favariz agreed to halt enforcement of the award.
Enforcement Proceedings Before Singapore Courts
Following a dispute over payments under the settlement, Favariz resumed enforcement proceedings for the ZCC award before the Singapore courts. At Favariz’s request, the Singapore High Court granted leave to enforce the Final Award on 22 December 2023. Talco then applied to set aside the enforcement order and to stay the enforcement proceedings.
In a judgment dated 19 February 2025, the SICC granted the request to stay enforcement of the award. The reasons for granting the stay were provided in a subsequent judgment dated 16 April 2025.
Talco applied for the stay on the basis that a dispute had arisen under the Settlement Deed between the parties, which required resolution through arbitration in Stockholm. Favariz argued that there was no genuine dispute. Talco, however, maintained that the mere existence of a dispute was sufficient to trigger the arbitration clause, specifically whether it had breached the Settlement Deed due to an alleged inability to pay caused by US sanctions.
The Court emphasized that the procedural law of the forum applied to the request. Accordingly, it held that Singapore law—not English law, the governing law of the Settlement Deed—applied to the stay application. The Court found that the preconditions for a stay were met: there was a valid arbitration agreement, the dispute fell within its scope, and the agreement was neither null and void, inoperative, nor incapable of being performed.
In granting the stay, the Court exercised its discretion to impose conditions aimed at ensuring prompt resolution of the dispute. Talco was ordered to commence arbitration at the SCC within ten days and to diligently pursue the proceedings.
Talco failed to file for arbitration within the ten-day deadline and instead requested additional time from the Court to prepare its case. In response, Favariz requested that the stay be lifted or that it be made conditional upon the provision of security. The Court granted Talco’s request for an extension and explained its reasons in a judgment issued in May 2025.
ABOUT THE AUTHOR
Esen Aydın is a Legal Content Manager at Jus Mundi and a PhD candidate at Istanbul University. Her research focuses on private international law and commercial arbitration. She holds two Master’s Degrees in International Arbitration and Dispute Settlement from Istanbul University and SciencesPo, Paris. Prior to joining Jus Mundi, Esen worked as a teaching assistant in Private International Law.
