Draft Changes To Ukrainian Model Gas Storage Agreement Re Arbitration Clause

On 2 June 2017, the Ukrainian Regulator placed at its website draft changes to the Model Gas Storage (Injection, Withdrawal) Agreement (the "Model Agreement"). The changes are referred here to as the "Draft" (available in Ukrainian).

The Model Agreement is used as a template for all gas storage agreements concluded by PJSC Ukrtransgaz ("UTG"), the Ukrainian gas storage and transmission system operator (GTO), and its customers regarding gas storage services.

Under Ukrainian legislation, the parties to a gas storage agreement may not deviate from the text of the Model Agreement. This has presented challenges for international transactions.

According to the Draft, if the customer of UTG is a non-resident (i.e., foreign) company, any and all disputes arising from the storage agreement may be resolved by final and binding international arbitration.