On January 23, 2015, Kyiv Administrative Court of Appeal opened proceedings on an appeal filed by the Cabinet of Ministers of Ukraine where the Government defends the legitimacy of its Resolution # 647 On Procedures for Natural Gas Procurement by Industrial, Power and Heat Generating (as it Pertains to Industrial Gas Volumes) Enterprises issued on November 26, 2014. This Resolution compelled the country’s 170 largest industrial enterprises to purchase natural gas exclusively from NJSC NAFTOGAZ OF UKRAINE until the end of winter.

The Cabinet of Ministers appealed against the decision made by Kyiv District Administrative Court on December 16, 2014, which had overturned items 1-4 of the Government Resolution # 647. In fact, with that decision the court cancelled the companies’ obligation to purchase gas exclusively from NJSC NAFTOGAZ OF UKRAINE.

The lawsuit against the Resolution of the Cabinet of Ministers was filed by such gas producers as PrJSC NATURAL RESOURCES, LLC EASTERN GEOLOGICAL UNION, LLC KUB-GAS, LLC TISAGAZ, LLC ENERGY SERVICE COMPANY ESCO NORTH, PrJSC NAFTOGAZVYDOBUVANNYA, JV POLTAVA PETROLEUM COMPANY, LLC NAFTOGAZ ALLIANCE as well as chemical plants PrJSC RIVNEAZOT and PrJSC DNIPROAZOT.

Kyiv Administrative Court of Appeal admitted the appeal filed by the Cabinet of Ministers and set February 4, 2015 as the deadline for filing counterarguments to the appeal.

Please be reminded that Court of First Instance cancelled monopoly in the gas market established by the Resolution of the Cabinet of Ministers.