In early July 2025, the Arbitral Tribunal seated in Stockholm issued a Partial Award in one of the most important International Commercial Arbitration cases, which involves a Polish entity—the dispute between ORLEN SA (formerly PGNiG) and Gazprom over natural gas pricing under the long-standing Yamal Contract.

The arbitration, initiated in January 2022, involves multi-billion-dollar claims over the gas pricing mechanism for supplies to Poland, dating back to 2017, and originating from a contract signed in 1996. The dispute, however, extends well beyond financial figures, encompassing geopolitics, long-term energy policies, and the role of international commercial arbitration amid sanctions and shifting energy alliances.

The Partial Award: A Fair but Expensive Middle Ground

The Tribunal’s decision on July 1, 2025, brought both relief and responsibility.

• Gazprom’s claim for a price increase from November 2017 was also dismissed.
• ORLEN’s claim for a price reduction from November 2017 (or January 2018) was dismissed.
• However, the Tribunal established a new, higher contract price effective January 1, 2018.
• Gazprom’s further claims for additional increases were rejected.

Although neither party achieved a complete victory, ORLEN now faces a potential retroactive payment of approximately $290 million, due to the revised pricing formula. Importantly, this amount is much lower than the $1.7 billion Gazprom initially sought — a result that could be considered a strategic win given the early exposure.

Still, the tribunal has not resolved the mechanics of the financial settlement nor awarded specific damages. The parties are expected to resolve these issues bilaterally through other alternative dispute resolution methods; if not, they will be addressed in the next phase of the arbitration. The press release issued by Orlen does not specify whether the Tribunal itself asked the parties in the dispute to negotiate. Such an approach may be seen as a way for the tribunal to avoid making a timely decision. On the other hand, allowing the parties to reach an amicable settlement empowers them and provides an opportunity for a quicker resolution of the dispute.

What Comes Next: Pricing, Sanctions, and Strategic Leverage

The Partial Award covers only a portion of a larger, multi-phase arbitration, with several key issues still unresolved, such as:

• Pricing adjustments based on 2020/2021 renegotiation requests.
• Disputes over Gazprom’s suspension of gas deliveries in April 2022.
• A separate arbitration regarding interest on alleged overpayments from 2014 to 2020.

Additionally, EU sanctions currently block any payments to Gazprom, regardless of the award. ORLEN has confirmed its legal compliance and stated that it has made financial provisions for potential liabilities, while still working to recover in its counterclaims.

Broader Context: The End of the Yamal Era

The Yamal contract stems from a 1993 Polish-Russian intergovernmental agreement, which includes a take-or-pay clause, a ban on re-exporting gas, and supply commitments that extend until 2022. Over time, it became a symbol of Europe’s energy dependence on Russia—and eventually of the end of this reliance.

Following Russia’s invasion of Ukraine, ORLEN has entirely stopped purchasing Russian gas and oil. The company now sources natural gas from Norway, the U.S., Qatar, and multiple LNG suppliers, while utilizing its own production and transportation infrastructure. The arbitration is now primarily a legacy dispute, with no effect on current operations or energy security.

Legal Takeaways

This arbitration highlights several trends and lessons relevant for in-house counsel, dispute resolution professionals, and energy companies across Europe.

1. Partial awards can alter commercial obligations without awarding damages, leading to temporary uncertainty but also potential opportunities for negotiation.
2. Sanctions and public policy factors increasingly influence the enforceability and execution of arbitral awards.
3. Contractual flexibility, or the lack of it, in long-term commodity contracts is now under increased legal and strategic scrutiny.
4. Arbitration continues to be the main venue for resolving large energy disputes, even amid geopolitical tensions.

Final Thoughts

This case clearly shows that arbitration is not just about winning or losing, but about how risks are shared, how results are handled, and how legal tactics adjust to bigger business and political factors.

At Jabłoński Koźmiński Law Firm, we continue supporting clients in navigating the complex intersections of energy law, international arbitration, and strategic disputes.

If you wish to discuss the implications of this case or broader trends in energy arbitration, please feel free to contact us.