The Supreme Court of Lithuania ruled on Friday to uphold a verdict passed by Stockholm Arbitration court which bound Lithuania not to adjudicate in a dispute with Gazprom.
© Reuters/Scanpix

"The main question heard in the Arbitration is not deemed by the Lithuanian law to be a non-arbitration dispute," the Supreme Court said in a statement.

The July 2012 ruling of the Arbitration Institute of the Stockholm Chamber of Commerce concerned an investigation by Lithuania's Ministry of Energy into activities of Lithuania's largest gas company Lietuvos Dujos (Lithuanian Gas) and three of its board members, two of which represented Gazprom which then owned a stake in the company. The ministry had asked Lithuanian courts to decide if the three properly represented the company in gas supply negotiations with Gazprom.

Gazprom then sued the Lithuanian government with Stockholm Arbitration, claiming that the investigation violated the shareholder agreement of Gazprom, Germany's Ruhrgas and the Lithuanian government which stipulated that disputes between parties had to be adjudicated in an arbitration.

Stockholm Arbitration ruled in 2012 in favour of Gazprom, but the Lithuanian Court of Appeals decided not to uphold the ruling, arguing that the government must be able to bring disputes over company management to courts rather than arbitration.

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