CEZ wins arbitration against Gazprom for over one billion crowns

Czech energy group CEZ announced that it has won an arbitration case against Russian company Gazprom, securing more than one billion crowns (approximately $42.16 million) in damages.

This decision follows Gazprom’s significant reduction in gas deliveries in 2022 after Russia’s invasion of Ukraine. CEZ had to compensate for this shortfall by purchasing gas at high market prices, leading to substantial additional costs for the company.

An arbitration ruling in CEZ’s favour

The arbitration tribunal of the International Chamber of Commerce (ICC) fully upheld CEZ’s claim, ordering Gazprom to pay damages, along with interest and legal costs.

The Czech company stated that if Gazprom does not comply voluntarily with the ruling, it will take the necessary steps to enforce the arbitration award.

A shift in energy supply

Until 2022, the Czech Republic was heavily reliant on Russian gas, primarily supplied through the Nord Stream pipeline via Germany. Following Russia’s reduction in shipments, the country diversified its energy sources, securing pipeline and liquefied natural gas (LNG) supplies from other regions.

Gazprom has not yet responded to the arbitration ruling. CEZ initiated the arbitration proceedings in February 2023 to seek compensation for its financial losses.