Information on the non-observance by Gazprom PJSC and Gazprom Export LLC

The management board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG” or the “Company”) announces – in relation to current report No. 13/2020 dated 30 March 2020 stating that:(i) the Arbitral Tribunal in Stockholm (the “Arbitral Tribunal”) issued a final award (the “Award”) in the arbitration proceedings brought by PGNiG against Gazprom PJSC and Gazprom Export LLC (jointly referred to as “Gazprom”) pursuant to which the contract price for gas supplied by Gazprom under the contract for the sale of natural gas to the Republic of Poland of 25 September 1996 (the “Yamal Contract”) was reduced, with retroactive effect from 1 November 2014; and that(ii) PGNiG was taking steps towards the implementation of the Award –that:
 

1. following the receipt of Gazprom’s invoices for gas supplies made in March 2020 and between 1 and 15 April 2020 (the “Invoices”), which were issued by Gazprom based on the old pricing terms, i.e. contrary to the new pricing terms of the Yamal Contract determined in the Award, PGNiG demanded that Gazprom to immediately (no later than by 23 April 2020) correct the Invoices or, failing that, PGNiG would assume that Gazprom is intentionally disregarding the provisions of the Award; and
2. by 23 April 2020, PGNiG had not received any reply to such demand and had likewise not received corrected versions of the Invoices from Gazprom.
   The Company treats Gazprom’s lack of a response to PGNiG’s above-mentioned request and its failure to correct the Invoices by the deadline set by PGNiG as implicit confirmation that, for the time being, Gazprom does not intend to observe the Award.
   
   In the Company’s opinion, the position presented by Gazprom has no legal basis and is in gross violation of the Yamal Contract, in addition to being contradictory to Gazprom’s declarations on honouring the awards of international arbitration institutions, as the Award is final and binding on the parties.
   In relation to the above, the Company’s Management Board would like to state that the Invoices have been paid by PGNiG (by the contractual deadlines) in amounts calculated based on the new pricing terms of the Yamal Contract determined in the Award. PGNiG previously notified Gazprom in separate written correspondence that it intended to pay the Invoices in such manner.
   
   The Company’s Management Board emphasises that at the moment, PGNiG does not have any overdue payables towards Gazprom and has been timely making all payments due to Gazprom, subject to the new pricing terms of the Yamal Contract as determined in the Award.
   PGNiG is taking further steps aimed at the implementation of the Award and at receiving a refund of the overpaid amount resulting from the retroactive settlement under the Award, which the Company addressed in its current report No. 13/2020 dated 30 March 2020.