Ukrain takes Russia to court in gas row: President
AFP, Tuesday 6 Sep 2011
Ukraine accuses Russia of violating accords in a gas dispute and prepares to take Russia to court to ensure lower prices for gas imports

Ukraine is preparing to take Russia to court to prove it has violated accords in a worsening gas dispute, which has ended a thaw in relations, President Viktor Yanukovych said on Tuesday.

Throwing diplomatic niceties aside, Yanukovych said Ukraine was not a "poor relation" of Moscow, in his strongest attack on the Kremlin since taking power in 2010 for a presidency that most believed would have a pro-Russsian tinge.

Russia spat back that Yanukovych was misleading the public with his figures, on the day Prime Minister Vladimir Putin opened a pipeline which he said meant Ukraine would lose its exclusive transit of Russian gas to Europe.

"Russia's position is categorically unacceptable and if it does not change then we will go to international arbitration," Yanukovych told the Kommersant daily in an interview.

"We have already drawn up the materials for going to court. We are absolutely sure that international agreements have been violated," he said. "Court, yes, it's an extreme measure but nothing has changed for one-and-a-half years."

Ukraine is seeking a revision to accords with Russia signed by the previous Ukrainian government to obtain lower prices for its gas imports from Russia's Gazprom. Yanukovych said that Kiev is overpaying by $5-6 billion annually.

Yanukovych said that the basis of Ukraine-Russia gas relations should be the 2001 accords -- not the 2009 10-year deal that ended a cut in supplies signed by ex-prime minister Yulia Tymoshenko, now on trial for abuse of power.

"The price is not fair for Ukraine. The conditions have been set out as if for an enemy," he said.

He said Ukraine was paying way more for Russian gas than Germany. If Kiev continued "overpaying" in the next 10 years, then Ukraine would lose $60 billion (43.0 billion euros), or 20 percent of the budget anually.

Recent tough rhetoric against Kiev by Medvedev was "completely incorrect", Yanukovych added. "We are not poor relations. We are an independent state."

Gazprom chief executive Alexei Miller responded that Ukraine was receiving Russian gas at cheaper rates than Hungary, Poland, Romania and Turkey while Kiev's transit fees were higher than those in Germany.

"Our Ukrainian colleagues have got on a train called 'cheap Russian gas' and they don't know what station to get out at," he said. "They don't know they might end up in a dead end."

Miller said that Ukraine had an obligation to fulfill the 10-year contract signed in 2009 every year right up until its expiration date in 2019.

Viktor Chumak, head of the Public Policy Institute in Kiev, said that Ukraine would "resist to the end" to avoid sustaining economic losses over the gas prices.

"The Ukrainian leadership wants to find an agreement and say 'we are all friends'. But we have seen that not only does Moscow not understand them but that they do not want to hear," he added.

Yanukovych was seen as a pro-Kremlin figure when he came to power after defeating the leaders of the 2004 Orange Revolution in 2010 polls. But he has since set integration with the European Union as the goal of his presidency.

However there are also growing tensions with the European Union and the United States, which have expressed alarm over the trial and detention of Tymoshenko.
Rejecting charges his administration is behind the trial, Yanukovych told Kommersant that the process "is not advantageous for me and not what I needed" but insisted he could not interfere in the work of the courts.

However he admitted it was "not normal" that Tymoshenko's former interior minister Yuriy Lutsenko and other former officials had been held in custody for several months without any verdict in their cases.