Gazprom petitions Tel Aviv court to liquidate Israeli co

Gazprom Transgaz says that Double K Oil Products has not paid substantial amounts, including €5 million awarded by the Russian Court of Claims.

Gazprom JSC (RTS: GAZP; LSE: GAZD; DAX: GAZ) unit Gazprom Transgaz Ukhta has petitioned the Tel Aviv District Court to liquidate its Israeli company Double K Oil Products (1996) Ltd. Gazprom Transgaz says that Double K has not paid substantial amounts, including €5 million awarded by the Russian Court of Claims in March 2009. Double K's appeal of the ruling was also dismissed.

Gazprom says that Double K's debt totals NIS 26 million, as well as additional compensation totaling tens of thousands of shekels awarded by an Israeli court. Gazprom says that Double K is neither willing nor able to carry out the court ruling, after its owners emptied the company of all its assets.

Gazprom Transgaz petition for the liquidation of Double K is the latest act in the long battle between the companies. Double K, which mainly operates in Austria, registered in Israel by Zenon Kluger, who resides in Austria and Israel, and Oleg Izikowitz, a Russian, in 1996. In 2000, the company signed a ten-year $350 million contract with Gazprom Transgaz to distribute natural gas condensate produced by Gazprom refineries. Double K's owners hoped to make a $100 million profit on the deal.

Things began to go wrong in 2004, when Double K signed a gas marketing contract with a Finnish company, which later canceled the deal and signed directly with Gazprom. British and Dutch courts rejected Double K's petitions to seek compensation from Gazprom, and in 2010, Double K's two owners fell out. The legal battle between them resulted in the discovery the Double K had set up a subsidiary in Virgin Islands to which it diverted payments which were supposed to be used to bribe Gazprom executives.

In July 2012, the Tel Aviv District Court Judge ruled that the Russian judgment was enforceable in Israel. Kluger has appealed the ruling with the Supreme Court on the grounds that no Russian court will ever rule against Gazprom, because it is controlled by President Putin and his cronies, and that court system in Russia is corrupt.

Published by Globes [online], Israel business news - - on February 21, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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