The arbitration council based in Zurich made a decision in the case of the lawsuit of the Hungarian transporter FGSZ against the Government of the Federation of Bosnia and Herzegovina, Energoinvest and BH-Gas. All requests of the FGSZ to the FBiH Government were rejected, which freed the Government from responsibility and is no longer a party to the proceedings, the Federal Ministry of Energy, Mining and Industry announced today.
The arbitration decided that Energoinvest and BH Gas are obliged to pay over 11 million US dollars to the Hungarian company.
By concluding the annex to the contract from 2020, and by agreeing on a high penalty in case of termination of the contract in favor of the Hungarian gas transporter, just before the introduction of the new gas supply route via Turkish Stream, BH Gas and Energoinvest were caused enormous damage.
In the period from September 2021 to April 2024, proceedings were conducted before the Arbitration Council in Zurich between the Hungarian gas transporter FGSZ and Energoinvest, BH-Gas and the Government of the Federation of BiH. The procedure was conducted according to the lawsuit of FGSZ, as well as the counterclaim of Energoinvest and BH-Gas. On April 19, 2024, the arbitration panel made a decision based on the requests of the parties, by which the requests of the FGSZ to the Government of the Federation of Bosnia and Herzegovina were rejected in their entirety. The arbitration panel concluded that the FBiH Government did not undertake any financial obligation towards the Hungarian transporter FGSZ.
The arbitration panel accepted the claim of FGSZ in the amount of USD 21 million, which refers to the contractual penalty due to the suspension of gas delivery through Hungary. This decision was caused by the request of gas supplier Gazprom Eksport from Russia, which conditioned the further supply of BiH with natural gas by switching to Turkish Stream. The arbitration panel also accepted the counterclaim of Energoinvest and BH-Gas in the amount of 10.9 million dollars.
Of this, the amount of 1 million dollars refers to the payments made by BH-Gas for the period after the suspension of gas transport through Hungary, and the amount of 9.9 million dollars to the transport costs calculated and charged by FGSZ from 2019 to 2021 in amounts higher from the officially approved tariffs for gas transportation. In accordance with those decisions, the Arbitration Council obliged BH-Gas and Energoinvest to pay the FGSZ the amount of 11 million dollars.
The events and happenings that preceded the arbitration procedure are related to the long-term plans of Gazprom, as a long-term supplier of natural gas to Bosnia and Herzegovina, to switch to Turkish Stream. In March 2021, Gazprom notified Bosnia and Herzegovina for the last time. side that the delivery via the previous route Russia – Ukraine – Hungary – Serbia – Bosnia and Herzegovina will cease as of April 1, 2021 and that further deliveries are possible exclusively via the Turkish Stream.
In accordance with all of the above, the Federal Ministry of Energy, Mining and Industry estimates that, by concluding the annex to the contract from 2020, which stipulated a high contractual penalty for the termination of the contract in favor of the Hungarian gas transporter FGSZ, immediately before the start of the Turkish Stream operation, BH Gas and Energoinvest were made a huge too bad. Bad decisions caused enormous damage to the entire Federation of Bosnia and Herzegovina.
Therefore, the ministry supports all actions that will lead to the final elucidation of the events that preceded the arbitration proceedings. The international legal team is already taking further legal steps with the aim of protecting the interests of Energoinvest, BH-Gas and the Federation of Bosnia and Herzegovina, according to the statement of the Federal Ministry of Energy, Mining and Industry, as reported by the FBiH Government Office for Public Relations.
