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RESOLUTION OF THE SUPREME ECONOMIC COURT OF UKRAINE

of February 14, 2007 No. 17/32

About recognition of the property right to natural gas and duty to deliver this gas

(determination of Trial chamber on economic cases of the Supreme Court of Ukraine of 19.04.2007 it is refused to open production on review)

The highest economic to court of Ukraine as a part of board of judges:

the chairman - Nevdashenko L. P.

judges: Vladimirenko S. V., Dunayevskoy N. G. having considered in proceeding in open court the application of Ukrenergosbyt Private company, Kiev for review of the resolution on the new revealed circumstances of 25.07.2003 of the Supreme Economic Court of Ukraine in the matter of economic court of N17/32 of Kiev in the claim of Ukrenergosbyt Private company, Kiev to National Joint Stock Company Naftogaz of Ukraine Ukrtransgaz Subsidiary company, Kiev about recognition of the property right to natural gas of 305 000 000 CBM and about duty to deliver this gas

with the participation of agents of the parties:

from the claimant - Osipenko D. O.

from the defendant - Quickly N.M., Samoylenko K. V., I.YU's Bone.

ESTABLISHED:

The Ukrenergosbyt private company declares the claim to Ukrtransgaz Subsidiary company of National joint stock company "Neftegaz of Ukraine" recognition partially invalid acts of acceptance transfer of natural gas and recognition of the property right to natural gas.

In reasons for the claim Ukrtransgaz Ltd refers to the signed contracts and the agreement with the defendant under which it it was purchased and transferred to the defendant for transportation of 418 million cubic meters of natural gas, from which 113 million cubic meters on instructions of National Joint Stock Company Naftogaz of Ukraine Ukrtransgaz Subsidiary company are transferred to consumers, and 305 million cubic meters remained unused in gas-transport system of the defendant.

Decision of Arbitration Court of Kiev of 12:07. 2000, the resolution of Arbitration Court of Kiev left without changes of 02.11.2000 and the resolution of the Kiev Economic Court of Appeal of 04:04. 2002, the property right of the claimant to natural gas in number of 305 million cubic meters which was delivered to them in gas-transport systems of the defendant is recognized and obliged the defendant to deliver natural gas in number of 305 million cubic meters to consumers of Ukrenergosbyt Ltd on its specifying. Regarding recognition invalid partially acts of acceptance transfer of natural gas proceeedings are stopped as these claims are not subject to consideration in Arbitration Courts.

Judgments are motivated with validity of claims, in particular the contracts provided to court, the agreement and acts of acceptance transfer of natural gas which undoubtedly determine the fact that by the claimant to gas-transport system of the defendant it is transferred to 418 million cubic meters of gas. On specifying of the claimant, to consumers it is transferred 113 million cubic meters of gas. The remaining balance unused the claimant of gas, being plaintiff's property and being at the disposal of the defendant, constitutes 305 million cubic meters.

Resolution of the Supreme Economic Court of Ukraine of 25.07.2003 decision of Arbitration Court of Kiev of 12:07. 2000, the resolution of Arbitration Court of Kiev of 02.11.2000 and the resolution of the Kiev Economic Court of Appeal is repealed of 04.04.2002, is refused satisfaction of the claim.

The resolution of the Supreme Economic Court of Ukraine is motivated that transfer by the claimant of 418 million cubic meters of natural gas to the defendant is performed based on four acts of acceptance transfer. The same acts confirm not only total quantity of the natural gas accepted by the defendant but also the fact that this gas was transported to consumers and is used by the last in the same amount.

As for statement of the claimant about remaining balance in gas-transport system of the defendant of gas in number of 305 million cubic meters, the Supreme Economic Court of Ukraine specified that the claimant owed sign with the defendant the contract for downloading to underground storage warehouses and storage of natural gas which arrived in gas-transport system and was not realized. Such contract between the parties was not signed and remaining balance of unrealized gas for the purpose of its storage to underground storage warehouses did not download.

The Ukrenergosbyt private company filed petition for review of the resolution of the Supreme Economic Court of Ukraine of 25.07.2003 on the new revealed circumstances.

In reasons for the statement it is specified that. canceling accepted in the matter of the decision on satisfaction of the claim, the Supreme Economic Court of Ukraine recognized that all natural gas delivered to the defendant was transferred to consumers on specifying of the claimant and is consumed by it.

Meanwhile, the applicant specifies, in the course of consideration of dispute it is proved that consumers of Ukrenergosbyt Ltd were told only 113 million cubic meters of gas that is confirmed with the relevant acts of acceptance transfer which are drawn up according to terms of the contract. As for gas remaining balance in number of 305 million cubic meters of gas, this amount of gas not was it is distributed between consumers and remained in gas-transport system of the defendant. The defendant did not provide data that the specified amount of gas is transferred directly to the claimant's consumers to courts.

On requests of People's Deputies of Ukraine reported to the National Joint Stock Company Naftogaz of Ukraine that the disputable amount of natural gas in number of 305 million cubic meters was not consumed by consumers of Ukrenergosbyt Ltd.

From the letter of the National Joint Stock Company Naftogaz of Ukraine of 14.04.2006 under N6/1-516-180 it is visible that natural gas of Ukrenergosbyt Ltd was not distributed at all as the applicant did not provide distribution of natural gas in November-December, 1999. Amounts of gas which Ukrenergosbyt Ltd received under the external economic contracts were used by the specific companies suppliers and consumers given in the letter, under this Ukrenergosbyt Ltd with the offer of distribution of gas to the specified companies did not address to the National Joint Stock Company Naftogaz of Ukraine and their subsidiary companies.

Besides in the letter it is reported that by results of supply of gas in December-November, 1999 there was situation in case of which consumers refused the supply of gas provided in planned distribution through Ukrenergosbyt Ltd and drew up acts of acceptance transfer of gas with other suppliers.

According to item 3.2 of the charter of the National Joint Stock Company Naftogaz of Ukraine approved by the resolution of the Cabinet of Ministers of Ukraine of 25.05.1998 of N747 "About formation of National joint stock company "Neftegaz of Ukraine", object of activity of the National Joint Stock Company Naftogaz of Ukraine in particular distribution of natural gas is.

Apparently from the same letter of the National Joint Stock Company Naftogaz of Ukraine, consumers and suppliers who are specified in the provided list of the companies received in November and December, 1999 305 million cubic meters of natural gas which was delivered to Ukraine to Ukrenergosbyt Ltd and is transferred to Ukrtransgaz recreation Center the National Joint Stock Company Naftogaz of Ukraine.

The given circumstances existed for the period of consideration of the case, however were not known to the applicant.

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