Cities can break Gazprom deals without penalties: Dutch legal advisors

Dutch municipalities can cancel their contract with Russian gas company Gazprom without paying a hefty fine, various lawyers told BNR. The Russian invasion of Ukraine is an unforeseen circumstance that municipalities can use to dissolve the contract without paying out the remaining period, the lawyers said.

"Municipalities could not have foreseen that the party with which they concluded a contract will finance a war. That happens de fact. You don't have to tolerate a contracting party who suddenly acts so amorally," lawyer Jan Hein Meerburg of Kennedy Van Der Laan said to BNR.

Lawyers Maarten Kole of Dirkzwarger and Jop Fellinger of Fruytier Lawyers in Business also think municipalities can dissolve their Gazprom contract for this reason. The sanctions package against Russia will increase municipalities' chances in court, Fellinger added. "It makes sense that municipalities want to scrap their payments to Gazprom now that heavy sanctions are imposed. A judge understands that. It is bizarre that they're still paying at all."

Dutch courts will also look at the situation through a Dutch lens, added lawyer Andrada Tiru at Simmons & Simmons. "The judge will take into account that the Dutch government has condemned Russia's invasion of Ukraine. Then you can't require a municipality to maintain a contract with a Russian state-owned company unchanged."

Cecilia van der Weijden, lawyer-partner at CMS, warns that municipalities can't just assume that they'll win if Gazprom fights the dissolution of their contract. "It's not a done deal that invoking unforeseen circumstances will succeed in the current situation," she said, referring to Russia's previous invasion of Georgia, the annexation of Crimea, and the downing of MH17. "At the time, those circumstances did not mean that current gas contracts were canceled and no new contracts were concluded with Gazprom. It, therefore, remains to be seen whether a Russian invasion of Ukraine was an unforeseen circumstance at the time."