Naftogaz Ukrainy has announced it has won arbitrage proceedings against Russia's Gazprom on all contested issues in the gas supply contract, the company told Interfax on Friday after receiving the final ruling of the Arbitration Institute of the Stockholm Chamber of Commerce.

Naftogaz said that the arbitrage court fully rejected all of Gazprom's claims with regard to the 'take or pay' condition for $56 billion in 2012-2017, which was the biggest dispute in terms of monetary claims between the two sides.

In addition, Naftogaz was successful in its claim for an over 90% reduction in annual contract volume obligations for the future to 5 bcm (with minimum annual volume of 4 bcm). The original amount of gas was 52 bcm per year.

Naftogaz saved $1.8 billion on gas purchased in 2014-2015 due to revision of the contract price.

Naftogaz was also successful in its claim for a downward revision of the price in conformity with market conditions and compensation for previous overpayments. The Arbitration Institute reduced the price effective as of the second quarter of 2014, when Naftogaz initiated arbitration, by 27.4% from $485 per 1,000 cubic meters to $352 per 1,000 cubic meters.

Naftogaz estimates the total positive financial effect of the arbitration over the lifetime of the supply contract at over $75 billion.

As reported, the companies took each other to arbitration back in June 2014. Naftogaz and Gazprom on May 31, 2017, received a separate award of the tribunal in the gas supply case. The tribunal gave Naftogaz a right to demand a reduction in the gas price under a contract with the Russian monopolist based on market conditions, and also canceled the requirements of Gazprom to NJSC Naftogaz based on the "take-or-pay" principle and completely canceled the ban on Ukraine's re-export of gas.

The Arbitration Institute also recognized Naftogaz's claim for the review of the contract price, taking into account market conditions, and obliged the parties to negotiate the formula for the price of gas that should be applicable to supplies starting from April 27, 2014, as well as the volume of gas that will be supplied.

According to Naftogaz, the price formula will be radically revised; it should be pegged to the price of gas on the market rather than to the prices of fuel, namely gas oil and fuel oil.

The two companies failed to reach agreement on the formula and volumes; therefore the final decision was approved by the Arbitration Institute on its own.