Common use of General context Clause in Contracts

General context. The Kishinev’s summit of the heads of the CIS states brought some surprises. As it had been planed, on October 7, 2002, Ukrainian and Russian Premiers ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ signed the declaration on strategic partnership in the gas sphere. Presidents of the Russian Gazprom and the Ukrainian Naftogaz Ukrainy ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ signed the agreement on setting up the international gas consortium. President of the Russian Federation ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ unexpectedly proposed to consider, by March 2003, the issue of election of the Ukrainian President ▇▇▇▇▇▇ ▇▇▇▇▇▇ as chairman of the CIS Council of Heads of State. Actually that proposal runs counter to the CIS Statute. The document approved in January 1993 reads that Presidents and Prime Ministers of the CIS states shall chair sessisions of the CIS Council of Heads of State in Russian alphabetical order of names of the contries-members of the CIS. However, the Statute does not provide for the office of «chairman of the CIS Council» at all. As for Ukrainian President, such support and respect demostrated by Russia are very important today. Moreover, manifestation of friendship on the part of Russia leaves no alternative for Ukraine, especially with regard to long-lasting deterioration of relations between the Ukrainian President and Western countries determined by the tape-gate and Iraq-gate scandals. Recently, the President of Ukraine has resolutely rejected a Polish proposal to help organize a roundtable session with the opposition, which would undoubtedly entail tangible worsening of the Ukrainian-Polish relations. Problems in Ukraine’s relations with other countries are also aggravated by growing tension in domestic politics related to failure to establish a dialogue between the power and the oppopsition. Hence, given the situation, general prospects of Ukraine’s President are quite uncertain. It should also be mentioned that improvement of Ukraine’s relations with Russia took place at the height of the tape-gate. Russia took advantage of internal political crisis in Ukraine and isolation of the Ukrainian President on the part of Western states. And the same is true about the current situation. It turns out that except for political dividends, Russia’s support will give the country an opportunity to derive financial benefits as well. So, the June 2002 declaration on foundation of the international consortium managing the Ukrainian gas transportation system (GTS) signed by Presidents of Ukraine and Russia ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and German Chancellor ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ can be interpreted in the above context. Under the above document, governments of Ukraine and Russia were ordered to work out and present for endorsement, within a short period, a joint agreement on strategic partnership in the gas sphere providing for foundation of the international consortium or joint venture dealing with management and development of the Ukrainian GTS. In the opinion of experts, initiatives of the EU countries, especially Germany, to upgrade the Ukrainian GTS could be explained, first and foremost, by «rapprochement of the Russian Federation with the United States of America and the NATO, which formed preconditions for closer strategic cooperation between the EU countries and Russia in the fuel and energy field.» Meanwhile, it was noted that «issues to be solved by Russian and German diplomats who initiated the agreement on foundation of the international consortium were not limited to enhancement of effectiveness of the Ukrainian GTS» but were caused by economic problems in the energy field existing in both the Russian Federation and the EU countries. Those problems emerged because of slow pace of reforms in the Russian gas industry and possible decrease of gas output, which «adversely influences the ability of the Russian Gazprom to meet long-term obligations relating to supply of the EU states with natural gas» (the Kompanion, No. 38, 2002). It is necessary to remind that at present, Ukraine’s GTS carries up to 90% of Russian natural gas exported to 19 European countries. The overall length of the Ukrainian pipeline network defined by the ▇▇▇▇▇▇-▇▇▇▇ Commission as a valuable national asset is 36.7 thousand kilometers, of which pipelines with a diameter of 1,000-1,400 mm constitute 35%. Along this network, 72 compressor stations with 112 compressor houses equipped with 710 gas-pumping units and a powerful system of 13 underground gas storage facilities ensure transportation of gas. Gas pipeline capacity of the Ukrainian GTS is 290 billion cubic meters per annum at the point of inflow and equals 170 billion cubic meters per annum at the point of outflow, of which 140 billion cubic meters are supplied to European countries. Volumes of transit of Russian natural gas increased from 92 billion cubic meters in 1992 up to nearly 120 billion cubic meters in 1999. Growing volumes of transit gas can serve as a confirmation of the Ukraine’s status of the world’s leader in gas transportation services. The declaration on strategic partnership in the gas sphere between the Cabinet of Ministers of Ukraine and the government of the Russian Federation was signed in Kishinev. Meanwhile, for the time being, the German and other parties potentially interested in the foundation of the international consortium made no strenuous efforts to join the project but took a wait-and-see position instead. On the day following the date of signing of the agreement, press-secretary of the Ruhrgas ▇▇▇▇▇▇ ▇▇▇▇▇ stated that before his company specifies forms of its participation in the consortium, politicians would have to settle all legal and technical issues related to implementation of the above project. Under Article 3, «Parties have agreed to found the international consortium in the form of joint stock company (hereinafter referred to as the Consortium) that shall transport natural gas and ensure effective, secure and stable functioning of the Ukrainian gas transportation system and increase of volumes of natural gas carried in transit via the territory of Ukraine; build new competitive gas transportation capacities in Ukraine: rationally utilize trunk gas pipelines and underground gas storage facilities; and attract investment necessary for modernization and development of the Ukrainian GTS.» According to the agreement, organizations responsible for foundation of the Consortium shall be the Naftogaz Ukrainy representing the Ukrainian Party and the Gazprom representing Russia. The authorized organizations were ordered, «to conclude an agreement on actions to be taken for foundation of the Consortium on a parity basis.» Participants in the Consortium shall jointly and on the consensus basis regulate requirements for participation of European gas companies in the Consortium. The declaration shall be valid within 30 years and shall be automatically prolonged for another five-year term. Another provision reads, «The Consortium shall be established, registered and operate in compliance with the Ukrainian legislation. The Consortium’s headquarters and management bodies shall be located in Kyiv (Ukraine).»

General context. The Kishinev’s summit of the heads of the CIS states brought some surprises. As it had been planed, on October 7, 2002, Ukrainian and Russian Premiers ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ signed the declaration on strategic partnership in the gas sphere. Presidents of the Russian Gazprom and the Ukrainian Naftogaz Ukrainy ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ signed the agreement on setting up the international gas consortium. President of the Russian Federation ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ unexpectedly proposed to consider, by March 2003, the issue of election of the Ukrainian President ▇▇▇▇▇▇ ▇▇▇▇▇▇ as chairman of the CIS Council of Heads of State. Actually that proposal runs counter to the CIS Statute. The document approved in January 1993 reads that Presidents and Prime Ministers of the CIS states shall chair sessisions of the CIS Council of Heads of State in Russian alphabetical order of names of the contries-members of the CIS. However, the Statute does not provide for the office of «chairman of the CIS Council» at all. As for Ukrainian President, such support and respect demostrated by Russia are very important today. Moreover, manifestation of friendship on the part of Russia leaves no alternative for Ukraine, especially with regard to long-lasting deterioration of relations between the Ukrainian President and Western countries determined by the tape-gate and Iraq-gate scandals. Recently, the President of Ukraine has resolutely rejected a Polish proposal to help organize a roundtable session with the opposition, which would undoubtedly entail tangible worsening of the Ukrainian-Polish relations. Problems in Ukraine’s relations with other countries are also aggravated by growing tension in domestic politics related to failure to establish a dialogue between the power and the oppopsition. Hence, given the situation, general prospects of Ukraine’s President are quite uncertain. It should also be mentioned that improvement of Ukraine’s relations with Russia took place at the height of the tape-gate. Russia took advantage of internal political crisis in Ukraine and isolation of the Ukrainian President View metadata, citation and similar papers at ▇▇▇▇.▇▇.▇▇ brought to you by CORE provided by Policy Documentation Center on the part of Western states. And the same is true about the current situation. It turns out that except for political dividends, Russia’s support will give the country an opportunity to derive financial benefits as well. So, the June 2002 declaration on foundation of the international consortium managing the Ukrainian gas transportation system (GTS) signed by Presidents of Ukraine and Russia ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and German Chancellor ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ can be interpreted in the above context. Under the above document, governments of Ukraine and Russia were ordered to work out and present for endorsement, within a short period, a joint agreement on strategic partnership in the gas sphere providing for foundation of the international consortium or joint venture dealing with management and development of the Ukrainian GTS. In the opinion of experts, initiatives of the EU countries, especially Germany, to upgrade the Ukrainian GTS could be explained, first and foremost, by «rapprochement of the Russian Federation with the United States of America and the NATO, which formed preconditions for closer strategic cooperation between the EU countries and Russia in the fuel and energy field.» Meanwhile, it was noted that «issues to be solved by Russian and German diplomats who initiated the agreement on foundation of the international consortium were not limited to enhancement of effectiveness of the Ukrainian GTS» but were caused by economic problems in the energy field existing in both the Russian Federation and the EU countries. Those problems emerged because of slow pace of reforms in the Russian gas industry and possible decrease of gas output, which «adversely influences the ability of the Russian Gazprom to meet long-term obligations relating to supply of the EU states with natural gas» (the Kompanion, No. 38, 2002). It is necessary to remind that at present, Ukraine’s GTS carries up to 90% of Russian natural gas exported to 19 European countries. The overall length of the Ukrainian pipeline network defined by the ▇▇▇▇▇▇-▇▇▇▇ Commission as a valuable national asset is 36.7 thousand kilometers, of which pipelines with a diameter of 1,000-1,400 mm constitute 35%. Along this network, 72 compressor stations with 112 compressor houses equipped with 710 gas-pumping units and a powerful system of 13 underground gas storage facilities ensure transportation of gas. Gas pipeline capacity of the Ukrainian GTS is 290 billion cubic meters per annum at the point of inflow and equals 170 billion cubic meters per annum at the point of outflow, of which 140 billion cubic meters are supplied to European countries. Volumes of transit of Russian natural gas increased from 92 billion cubic meters in 1992 up to nearly 120 billion cubic meters in 1999. Growing volumes of transit gas can serve as a confirmation of the Ukraine’s status of the world’s leader in gas transportation services. The declaration on strategic partnership in the gas sphere between the Cabinet of Ministers of Ukraine and the government of the Russian Federation was signed in Kishinev. Meanwhile, for the time being, the German and other parties potentially interested in the foundation of the international consortium made no strenuous efforts to join the project but took a wait-and-see position instead. On the day following the date of signing of the agreement, press-secretary of the Ruhrgas ▇▇▇▇▇▇ ▇▇▇▇▇ stated that before his company specifies forms of its participation in the consortium, politicians would have to settle all legal and technical issues related to implementation of the above project. Under Article 3, «Parties have agreed to found the international consortium in the form of joint stock company (hereinafter referred to as the Consortium) that shall transport natural gas and ensure effective, secure and stable functioning of the Ukrainian gas transportation system and increase of volumes of natural gas carried in transit via the territory of Ukraine; build new competitive gas transportation capacities in Ukraine: rationally utilize trunk gas pipelines and underground gas storage facilities; and attract investment necessary for modernization and development of the Ukrainian GTS.» According to the agreement, organizations responsible for foundation of the Consortium shall be the Naftogaz Ukrainy representing the Ukrainian Party and the Gazprom representing Russia. The authorized organizations were ordered, «to conclude an agreement on actions to be taken for foundation of the Consortium on a parity basis.» Participants in the Consortium shall jointly and on the consensus basis regulate requirements for participation of European gas companies in the Consortium. The declaration shall be valid within 30 years and shall be automatically prolonged for another five-year term. Another provision reads, «The Consortium shall be established, registered and operate in compliance with the Ukrainian legislation. The Consortium’s headquarters and management bodies shall be located in Kyiv (Ukraine).»