Main information
- The EU plans to eliminate its dependence on Russian gas by 2027.
- The invocation of force majeure clauses in contracts may not be effective due to uninterrupted deliveries, which would make respect for the legal threshold difficult.
- The sanction of Russian gas imports requires the unanimous agreement of the 27 EU member states.
The European Union is expected to unveil on Tuesday a plan detailing the way it intends to gradually eliminate its dependence on Russian gas. While the Union aims to put an end to all imports of Russian fossil fuels by 2027, around 19 percent of the current gas supply of Europe still comes from Russia.
However, the gradual elimination of these contracts without sanctions has legal difficulties. The European Commission is studying options that would allow European companies to invoke “force majeure” clauses in their contracts, and therefore get rid of them without incurring sanctions. In addition, the Commission plans to prevent companies from concluding new agreements on Russian gas.
Legal complications and options
Legal experts, however, express their skepticism as to the effectiveness of the invocation of force majeure. They argue that, since gas deliveries continue without interruption, there was no breach of contract. It is therefore difficult to reach the legal threshold of “force majeure”.
The sanction of Russian gas imports is considered the most decisive method to completely eliminate Russian gas. However, this approach requires the unanimous agreement of the 27 EU member states. Obtaining this consensus is difficult, because countries like Slovakia and Hungary have close ties to Russia.
Financial and alternative consequences
Since the start of the war in Ukraine, Gazprom and European companies have been involved in numerous legal battles concerning ruptures of contracts and not made payments. The value of these disputes is estimated at 18.5 billion euros.
Many gas contracts concluded with Gazprom include “Take-Or-Pay” clauses, who force buyers who refuse deliveries to pay anyway a large part of the contractual volume. According to some lawyers, European companies could argue that the evolution of risks and new EU regulations since 2022 justify renegotiation or outright abandonment of these contracts with Russia.
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