On Tuesday, Engie, the French energy giant, announced that it had initiated an arbitration procedure against Russian state-owned energy giant Gazprom, claiming it has failed to comply with its obligations to deliver gas under contract. The French utility demanded payment of contractual penalties and compensation for damages it has sustained as a result of the halt in supplies.

Gazprom ceased deliveries in September, following Engie failing to pay in full for its July deliveries.

In its annual report, the company stated, “This arbitration procedure is due to the significant delivery shortages by Gazprom Export LLC to Engie as of mid-June 2022, followed by Gazprom Export LLC’s unilateral decision at the end of summer 2022 to reduce its deliveries to Engie due to a disagreement between the parties…”

Gazprom had announced in August that it would cut off supplies to Engie over its failure to pay in full for its July deliveries. Gazprom notified Engie it would cease gas deliveries beginning September 1st until it was paid for the already-delivered gas. Gazprom noted that under Russian law, making further deliveries without having obtained payment for the previous deliveries is impossible.

Engie, for its part, said last fall that it had managed to maintain power generation despite the disruptions in Russian supply with no effects on its physical supply of fuel, including LNG.